• Summary
• Downloads
• Explanatory Notes
• Related Information
• Past Releases

INTRODUCTION

1 The purpose of the Australian Labour Account is to support macro-economic analysis requiring data on peoples’ participation in paid employment and related production over time. Its development provides an opportunity to significantly improve the quality of aggregates such as the number of jobs occupied within each industry, measures of hours worked, and labour productivity growth.

2 The concepts and definitions underlying the Australian Labour Account are built on International Labour Organisation (ILO) fundamentals, and expands them to ensure consistency with the System of National Accounts (SNA08). The result provides a set of core macro-economic labour market variables derived through data integration, with both an industry focus and time series dimension.

3 The Australian Labour Account does not include analysis of persons, jobs, hours and payments by age or gender, as for most policy purposes these needs are adequately met from the existing Labour Force Survey, labour demand business surveys and Census publications produced by the ABS.

CHANGES IN THIS ISSUE

4 Data in the four quadrants of the Labour Account, both quarterly and annual, have been revised from the previously published estimates.

5 Revisions may be attributable to a range of factors, including:

• Revisions to quarterly source data, including:
  • revisions to data from the Labour Force Survey,
  • revisions to Overseas Arrivals and Departures data, and
  • revisions to data from the quarterly Australian National Accounts.
• Seasonal factors for quarterly seasonally adjusted and trend data have been refined with the addition of a further quarterly observation.

• an enterprise is a productive undertaking maintained and controlled by one or more households, corporations or "quasi-corporations" that are resident in Australia's economic territory. Enterprises include (for example):
  • businesses operated by unincorporated self-employed trades persons,
  • family operated farms,
  • large corporations such as the major commercial banks and supermarket chains,
  • Government departments and agencies like Centrelink and the ATO, and
  • schools and hospitals operated by the state, or by religious organisations and charities.

• the National Accounts production boundary embraces the production of all goods and services, with the exception of services produced by household controlled enterprises solely for consumption by the household itself. This exclusion relates to (for example) the cooking of meals for household members, household washing and cleaning and care of dependents. However, the "shelter services" provided by owner occupied dwellings are included within the production boundary.

• Australian economic territory includes all geographies under the control of the Australian Government, i.e. the Australian mainland, off-shore islands, Antarctic territories, Australian embassies and military establishments in other countries, and Australia's exclusive maritime economic zone. It excludes foreign embassies and military establishments in Australia.

• an enterprise is considered "resident" if the "economic interest" of its controlling institutional unit (household, corporation or quasi-corporation) is centred in Australian economic territory.

• Employed Persons = Number of Main Jobs (at the total economy level)

• Average Hours Worked per Job = Hours Actually Worked/Filled Jobs

• add the number of persons from known industries excluded from primary business survey sources,
• add the number of persons employed in the permanent defence forces,
• add the number of unpaid contributing family workers,
• add the number of child workers who do not work for an employer as they are excluded from business surveys, and
• subtract the number of persons from specific industry subdivisions duplicated in primary sources to avoid double counting.

• add the number of persons employed in the permanent defence forces,
• add the number of child workers,
• add the number of main jobs held by non-resident visitors to Australia,
• add the number of secondary jobs held by non-resident visitors, and
• subtract the number of jobs held by Australian residents working in Australia for overseas businesses or organisations.

37 The data item Labour Account labour force total is the sum of Labour Account employed persons and Labour Force Survey (LFS) unemployed persons. Labour Account employed persons includes adjustments to the Labour Force Survey employed persons statistic to account for coverage and conceptual differences between the SNA based Labour Account and the LFS. No parallel adjustments have been made to the Unemployed total number which is taken directly from the Labour Force Survey.

38 The data item Labour Force Survey unemployed persons are classified by Industry according to their last job held.

39 The data item Labour Force Survey underutilised persons include Labour Force Survey underemployed persons plus Labour Force Survey unemployed persons.

40 The data item Labour Force Survey underemployed persons are classified by Industry according to their main job held.

LABOUR VOLUME

41 The Labour Volume quadrant describes the relationship between the hours of labour that are supplied by individuals and the hours of labour that are used or demanded by enterprises. It quantifies the number of hours worked by persons in all jobs. These data have a direct link to National Accounts and productivity statistics, as they are measures of labour input used in the production of goods and services.

42 Measuring changes in the level of hours worked for different groups of employed persons is important in order to monitor working and living conditions, as well as analysing economic cycles. Information on hours of work enables various analytical insights such as: classification of employed persons into full-time and part-time status; the identification of underemployed persons; and the creation of aggregate monthly hours worked estimates.

43 The Labour Force Survey is the primary source for household side hours worked data. Statistics relating to hours paid are based on business survey data, namely the ABS Survey of Employee Earnings and Hours, Australia (cat. no. 6306.0). Detailed information on data sources and methods used to compile Labour Volume data is in the ABS companion publication Australian Labour Account: Concepts, Sources and Methods (cat. no. 6150.0).

Derived Items

44 The Average hours worked per job item is derived by using a flow measure (hours actually worked) divided by a stock measure (filled jobs at the end of the quarter). Users are advised to take account of conceptual and scope differences when comparing these data with other estimates measured at the same point in time, such as average weekly hours.

Data Items

45 The data item Available hours of labour supply is the sum of Labour Account hours actually worked in all jobs and Hours sought but not worked. Labour Account hours actually worked in all jobs includes adjustments to the Labour Force Survey hours worked number to account for coverage and conceptual differences between the SNA based Labour Account and the LFS. No parallel adjustments have been made to the Hours sought but not worked number, which is taken directly from the Labour Force Survey.

LABOUR PAYMENTS

46 The Labour Payments quadrant accounts for the costs incurred by enterprises in employing labour and the incomes received by people from their labour provision. It can be described as the cost of labour, and reflects the interactions between jobs, persons and labour volume (hours worked).

47 The measure of total labour costs is based on the concept of labour as a cost to employers and includes wages and salaries, employers’ social contributions (typically superannuation and/or social insurance payments), and all other general employee costs borne by the employer such as training costs, use of recruitment services, payroll tax and so on. Any government subsidies, rebates or allowances for wage and salary payments paid to employees are deducted from employers’ labour costs.

48 Labour Payments data are primarily sourced from underlying data from two ABS National Accounts publications: Australian System of National Accounts (cat. no. 5204.0) and the Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0). Detailed information on data sources and methods used to compile Labour Cost data is in the ABS companion publication Australian Labour Account: Concepts, Sources and Methods (cat. no. 6150.0).

Derived items

49 The Average labour income per person item is derived by using a flow measure (total labour income) divided by a stock measure (employed persons at the end of the quarter). As such, users are advised to take account of conceptual and scope differences when comparing these data with other estimates measured at the same point in time, such as average weekly earnings.

SOURCES OF ERROR

50 After adjusting for conceptual and scope differences between data sources, a statistical discrepancy remains between the number of filled jobs as reported by businesses and the number of filled jobs as reported by households.

51 These discrepancies represent the cumulative impact of data source error, including survey error and modelling error. Survey error includes both sampling error and non-sampling error.

52 Sampling error is the predictable variability arising from the use of samples, rather than a complete enumeration of the populations of enterprises and households (i.e. a census). It refers to the difference between an estimate for a population based on data from a sample and the 'true' value for that population which would result if a census were taken.

53 Non-sampling error is caused by factors other than those related to sample selection. Non-sampling error can happen at any stage of a survey and can occur in non-survey data sources. An example of non-sampling error could be missing data or misclassification in government administrative records used directly in the Australian Labour Account. Error could occur in the industry classification of sponsored visa holders, or in the reported number of persons in the permanent defence forces.

54 Modelling error reflects errors embedded in the modelling assumptions used in the Australian Labour Account, for example in assuming that the proportion of children aged under 15 years who work has remained constant since 2006, or in assuming that quarterly Business Indicators, Australia (cat. no. 5676.0) employment movements accurately reflect quarterly change in the latest available annual data.

BALANCING THE AUSTRALIAN LABOUR ACCOUNT

55 In compiling the Labour Account, residual differences remain between the estimated number of filled jobs based on business sources and those derived from household sources. These differences remain after making adjustments for known conceptual and scope differences. They represent measurement error in the respective sources, and are reflected in the "statistical discrepancy" series highlighted in the "unbalanced" tables. In the balanced tables, separate business and household estimates have been replaced by a single "filled jobs" estimate. Consequent adjustments are also made to estimates of employed persons, hours worked and hours paid for. The harmonised, or "balanced", filled jobs series are based on a more detailed industry by industry investigation of the underlying sources of measurement error. This process is ongoing, and the balanced tables reflect the current state of this work. Affected series are likely to be subject to further revision.

56 Balancing decisions for Agriculture, forestry and fishing; Mining; Manufacturing; Electricity, gas, water and waste services; Construction; Wholesale trade; Retail trade; Accommodation and food services; Information media and telecommunications; Financial and insurance services; Administrative and support services; Professional, scientific and technical services; Public administration and safety; Education and training; Health care and social assistance; Arts and recreation services were mostly business survey sources. Balancing decisions Transport, postal and warehousing; Rental, hiring and real estate services; and Other services were mostly household survey sources.

57 In original terms the discrepancy between household sources and business sources was 378 thousand jobs, or 2.7%, in the December 2018 quarter.




Adjustments to other quadrants

58 Adjustments made to filled jobs through this process flow through to two other quadrants in the Australian Labour Account: Persons and Labour Volume.

59 The number of employed persons is adjusted proportionally with adjustments to filled jobs, after taking account of the level of multiple job holding in the particular industry.

60 Any adjustments made to filled jobs on the household side has a corresponding adjustment to the number of hours worked. This adjustment is calculated by multiplying the adjustment to filled jobs, by the average hours worked in each industry.

61 Any adjustments made to filled jobs on the business side has a corresponding adjustment to the number of hours paid for. This adjustment is calculated by multiplying the adjustment to filled jobs, by the average hours paid for in each industry.

SEASONALLY ADJUSTED AND TREND ESTIMATES

62 More detailed information on the methods for deriving seasonally adjusted and trend estimates are described in Australian Labour Account: Concepts, Sources and Methods (cat. no. 6150.0).

63 Seasonal adjustment is a statistical technique that attempts to measure and remove the effects of systematic calendar related patterns including seasonal variation to reveal how a series changes from period to period. Seasonal adjustment does not aim to remove the irregular or non-seasonal influences, which may be present in any particular data series. This means that movements of the seasonally adjusted estimates may not be reliable indicators of trend behaviour.

64 It is important to note that the methods used in seasonal adjustment do not force the sum of the estimates for each quarter of a year to equal the original annual total.

65 Seasonally adjusted estimates have seasonal effects removed, but they still contain the irregular elements, which may be of particular interest when analysing industry data. The Labour Accounts methodology and confrontation framework has addressed some of the quarterly sampling variability that may be seen in a single survey source. As a result, the industry analysis in this publication has a greater focus on seasonally adjusted data, with the remaining irregular movements being reasonably indicative of the actual state of the labour market, rather than measurement error.

66 For analysis of the underlying behaviour of the labour market, the ABS recommends using trend estimates. These are produced using a statistical smoothing technique, in order to dampen the irregular element.

67 For more information about ABS methods for deriving trend estimates and an analysis of the advantage of using them over alternative techniques for monitoring trends, see Information Paper: A Guide to Interpreting Time Series - Monitoring Trends (cat. no. 1349.0) or contact Time Series Analysis by email at <Time.Series.Analysis@abs.gov.au>.

RELATED PRODUCTS AND PUBLICATIONS

68 For those who are less familiar with national accounts, as well as other newcomers to the field of national accounting, the United Nations provides an introduction to some basic concepts and structures of the SNA National Accounts: A Practical Introduction. This information is freely available from the UN Statistics Division web site. [https://unstats.un.org/unsd/publication/SeriesF/seriesF_85.pdf].

69 Eurostat, the statistical office of the European Union, provides similar introductory information on national accounts with its Building the System of National Accounts website[http://ec.europa.eu/eurostat/statistics-explained/index.php/Building_the_System_of_National_Accounts] as does the OECD’s Understanding National Accounts(http://www.oecd-ilibrary.org/economics/understanding-national-accounts_9789264027657-en).

70 Detailed information on the Australian System of National Accounts is available in the ABS publication Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).

71 Detailed information on the Australian Labour Account is available in the ABS publication Australian Labour Account: Concepts, Sources and Methods (cat. no. 6150.0).

72 Detailed information on the labour force and labour force statistics is available in the ABS publication Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001).