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FEATURE ARTICLE: THE EXPERIMENTAL AUSTRALIAN LABOUR ACCOUNT
How many hours were worked in Australia during 2016?
Based on hours worked reported by households, and after adjusting for defence force personnel, short-term visitors and children: 20,278.0 million hours were worked in 2016. Businesses reported the number of "hours paid for" at 21,044.9 million hours. These numbers imply that hours paid for but not worked, mainly various forms of paid leave, exceeded hours of unpaid overtime (hours worked but not paid for). This pattern was consistent over time at a whole of economy scale.
LABOUR ACCOUNT FRAMEWORK
The Labour Account provides a conceptual framework through which existing labour market data from diverse sources can be confronted and integrated, with the aim of producing a coherent and consistent set of aggregate labour market statistics.
The Labour Account helps address data coherence by:
The Labour Account consists of four quadrant tables: jobs, persons, volume and payments (see figure 1). Data in each table are available annually, and for 19 high level industry groupings.
Figure 1: Australian Labour Account Identity Relationships – Jobs, Persons, Volume and Payments
The Jobs quadrant provides statistics on numbers of filled jobs derived separately from business and household sources, plus data on vacant jobs to provide a total number of jobs in the economy.
The Persons quadrant includes statistics on numbers of employed persons, together with data on numbers of unemployed and underemployed persons.
The Labour Volume quadrant provides statistics on hours paid for (derived from business data) and hours worked (from household sources), plus data on additional hours of work sought by unemployed and underemployed persons.
The Labour Payments quadrant provides statistics on labour income and employment costs.
The Labour Account is able to combine data from the jobs, persons, volume and payments tables to calculate average hours worked, average remuneration (per person and per job), and average labour costs per job.
The scope of the Australian Labour Account is consistent with that of the national economy, as defined in the Australian System of National Accounts (ASNA), which follows the international standard set out in the United Nations System of National Accounts. The Labour Account includes all jobs created by enterprises engaged in the production of goods and services that fall within the scope of the National Accounts "production" boundary, operating within Australia's economic territory.
Labour Account employed persons are defined as all people who hold one or more of those jobs. Hours worked and paid for relate to productive activity in those jobs. Labour income relates to earnings derived from employment in those jobs and includes both Compensation of Employees, as defined in the ASNA, plus an estimate of the labour related component of Gross Mixed Income. Labour costs relate to net employment related expenditure by businesses incorporating both labour remuneration, employment related intermediate consumption, and employment related net taxes.
The data sources used to compile Labour Account statistics do not always align completely with the ASNA. The household Labour Force Survey, for example, excludes permanent defence force personnel, short-term working visa holders and children under 15 from its count of employed persons, all of whom fall within the scope of the Labour Account and ASNA concept of employed persons. The Labour Account tables include "adjustments" to bridge the conceptual and scope gaps between the ASNA standard and the principal data sources. For example data obtained from the Commonwealth Government are used to "add in" defence force personnel. Commonwealth data on short term visa arrivals and departures are used to estimate the stock of potential employed persons in this category. Labour force participation and employment rates for resident cohorts with similar characteristics are used to estimate numbers of working short-term visitors. These adjustment methodologies are fully documented in the "Australian Labour Account: Concepts, Sources and Methods".
Finally, the Labour Account includes balanced estimates of filled jobs, employed persons, hours worked and hours paid for that adjust for the remaining sampling and non-sampling error. These adjustments are based on analysis of data for each industry, making use of employment related statistics on production, taxes, wages and salaries to assess the relative plausibility of competing estimates.
The Labour Account provides a time series of estimates of the number of employed persons, the number of jobs, hours worked and the income earned for each industry in one coherent framework. Historically, published statistics on employed persons in each industry have only been available for industry of main job. The expanded scope and additional data sources used in the Labour Account includes data for multiple job holders by industry of second, third and fourth job. For the first time, this enables an industry perspective of the total number of people employed in each industry in a time series. This could be used to better assess policy changes targeting a particular industry, providing a more realistic picture of the number of people impacted by the change.
The provision of time-series data on employment, hours and earnings, that are conceptually aligned with the Australian System of National Accounts data, will help improve macro-economic analysis and forecasting.
Consistent data on employment, hours and incomes will assist in assuring the quality of national accounts production and income data. A better alignment of hours worked with production (gross output and gross value added) at an industry level will improve the reliability of both labour and multi-factor productivity statistics.
The Labour Account is a complement to the existing suite of labour statistics. Users should continue to use the Labour Force Australia (cat. no. 6202.0) for headline employment, unemployment and persons not in the labour force as this is the data suite that is internationally comparable and aligned with International Labour Organisation conventions. If users require detailed dynamics essential for analysis of individual or household characteristics, such as household type, age, sex, income, occupation and educational qualifications, they should use the source data.
The Labour Account should be used for industry analysis of labour growth and performance in terms of people, jobs, hours and income.
Labour Account tables are likely to be of most value to people engaged in the use of labour statistics in macro-economic analysis, forecasting and in policy related research.
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