EXPLANATORY NOTES


IN THIS SECTION

Labour Force Survey Methodology and Concepts
Labour Force Survey Methodology
	Benchmarks
	LFS Sample
Labour Force Concepts
	Employment
	Unemployment
	Not in the Labour Force
Data Quality

LABOUR FORCE SURVEY METHODOLOGY AND CONCEPTS

1 The Australian Bureau of Statistics (ABS) has been conducting the Labour Force Survey (LFS) since 1960. Originally, the survey was conducted quarterly, before becoming monthly in February 1978. The LFS provides information on the labour market activity of the usually resident civilian population of Australia aged 15 years and over. This section provides information about the LFS methodology, concepts and definitions.


LABOUR FORCE SURVEY METHODOLOGY

2 The LFS is conducted by the ABS to provide monthly labour force statistics. The information is obtained from the occupants of selected dwellings by specially trained interviewers. The information obtained relates to the week before the interview (i.e. the reference week).

3 Households selected for the LFS are interviewed each month for eight months, with one eighth of the sample being replaced each month. The first interview is conducted face-to-face. Subsequent interviews are conducted by telephone (if acceptable to the respondent). A responsible adult in each selected household is asked to provide information about the labour force status of the usual residents and visitors covered by the survey. A usual resident is one who regards that dwelling as their own or main home, and who usually lives there. Persons who are away from their usual residence for six weeks or less are enumerated at their usual residence wherever possible (by obtaining information from other usual residents present at the time of the survey).

4 The scope of the LFS includes all persons aged 15 years and over except members of the permanent defence forces, certain diplomatic personnel of overseas governments customarily excluded from census and estimated population counts, overseas residents in Australia, and members of non-Australian defence forces (and their dependants) stationed in Australia. In common with other ABS household surveys, Jervis Bay Territory is excluded from the scope of the survey.

Benchmarks

5 LFS estimates are calculated in such a way as to add up to independent estimates of the civilian population aged 15 years and over (population benchmarks). Indigenous estimates in this publication were compiled using benchmarks from the low series population projections in Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, 1991 to 2021 (cat. no. 3238.0). These projections are not predictions or forecasts, but are projections of the 2006 Census data reflecting the growth in population which would occur if certain assumptions about future levels of fertility, mortality, migration and unexplained growth were to prevail over the projection period.

LFS sample

6 In 2009 the LFS was based on a multistage area sample of private dwellings (around 29,000 houses, flats, etc.) and a list sample of non-private dwellings (hotels, motels, etc.), and covers approximately 0.33% of the civilian population of Australia aged 15 years and over.

7 The survey sample is designed so that, within each state or territory, each dwelling has the same probability of selection in the sample. The sampling fractions for each state and territory differ, in order to enable reliable estimates of the main labour force characteristics for each state and territory. For more information on the sample design, refer to Information Paper: Labour Force Survey Sample Design (cat. no. 6269.0), released on 1 October 2009.

8 The LFS sample is not spread evenly across Australia or across a state or territory. The sample is clustered for the practical reason of reducing the costs associated with sample maintenance and of interviewer travel between selected dwellings. The more highly clustered the sample (that is the larger the number of selected units in a small area), the cheaper it is to enumerate, but also the less reliable are estimates derived from the sample (since the sample is confined to a small area and may be less representative). The issue of clustering particularly affects the estimates for remote areas where clustering is higher than in other areas.

9 In the LFS, coverage rules are applied which aim to ensure that each person is associated with only one dwelling, and hence has only one chance of selection. The coverage rules are necessarily a balance between theoretical and operational considerations. Nevertheless, the chance of a person being enumerated at two separate dwellings in the survey is considered to be negligible.

10 As one of a range of ABS savings initiatives for the 2008-09 financial year, there was a 24% reduction in the LFS sample size for the period July 2008 to August 2009, relative to the June 2008 sample size. The sample reduction was reinstated from September 2009 to December 2009, with December 2009 estimates being the first produced under the fully reinstated sample. Further information about the sample cut and reinstatement can be found in Information Paper: Labour Force Survey Sample Design (cat. no. 6269.0)
LABOUR FORCE CONCEPTS

11 The labour force framework classifies the in-scope population according to their labour force status (that is employed, unemployed, or not in the labour force). The employed and unemployed categories together make up the labour force, which gives a measure of the number of persons contributing to, or willing to contribute to, the supply of labour at the time of the survey.

12 Labour force definitions used by the ABS align closely with international standards and guidelines as specified by the International Labour Organisation (ILO). The definitions used by the ABS are outlined below. More detailed information may be obtained from Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001), which is available from the ABS web site <www.abs.gov.au>. Employment

13 Employed persons are those aged 15 years or over who, during the survey reference week, worked for one hour or more for pay, profit or payment in kind in a job or business, or on a farm; or worked for one hour or more without pay in a family business or on a farm; or who had a job but were not at work for a number of specified reasons; or were employers or self-employed persons who had a job, business or farm, but were not at work.

14 The definition of employment specifically refers to work for at least one hour. This definition is used to ensure that any work which contributes to the national accounting measures of national production is included in the measure of employed.

15 Persons are classified as employed based on the actual activities of each person, and this categorisation does not depend on their participation in labour market programs. Persons who participate in labour market programs are counted as employed, unemployed or not in the labour force according to how they respond to questions in the labour force survey about their actual activity in the week before the interview. Two important labour market programs are the 'work for the dole' scheme and the Community Development Employment Projects (CDEP) scheme.

16 Under the 'work for the dole' scheme, some persons receiving income support are required to work on not-for-profit community-based projects for a number of hours per week, which, at the relevant award rate of pay, equates to the income support entitlement. The participants receive their unemployment benefit payments directly from the administering government agency and not from the organisations undertaking the community projects, and therefore the organisations do not have an employer/employee relationship with the scheme participants. Accordingly, persons participating in 'work for the dole' schemes are not regarded as being in paid employment but are considered to be undertaking unpaid work. Depending on other activity they undertake in the survey reference period, they may be classed as unemployed or not in the labour force.

17 The CDEP scheme provides employment for Indigenous people living in remote, rural and urban areas. In a community with a CDEP scheme, the participants are paid a wage by the CDEP organisation to undertake work or training. While the types of activities undertaken might not differ greatly from those undertaken by 'work for the dole' participants, there is an employer/employee relationship between the participants and the CDEP organisation. CDEP participants are therefore treated as employed in the LFS. It is currently not possible to separately identify CDEP participants in the LFS.

18 From July 2009, the CDEP scheme was discontinued in urban and rural areas. CDEP continues to operate in remote communities and participants employed by CDEP organisations prior to July 2009 will continue to receive wages in an employer/employee relationship until CDEP is phased out in July 2011. Participants who joined after July 2009 receive unemployment benefits instead of CDEP wages, and are considered by the ABS to be undertaking unpaid work in a similar manner to those in the 'work for the dole' scheme.

Unemployment

19 Unemployed persons are defined as all persons aged 15 years and over who were not employed during the reference week, and either had actively looked for full-time or part-time work at any time in the four weeks up to the end of the reference week and were available for work in the reference week, or were waiting to start a new job within four weeks from the end of the reference week and could have started in the reference week if the job had been available then.

20 'Actively looking for work' encompasses a range of formal and informal job search activities and includes: writing, telephoning or applying in person to an employer for work; answering an advertisement for a job; checking workplace notice boards or the touch screens at Centrelink offices; being registered as a job seeker with Centrelink; being registered with a Job Network agency or any other employment agency; advertising or tendering for work; and contacting friends or relatives. People actively looking for self-employment jobs (such as looking for a business or to purchase a lease) are also treated as looking for work.

21 People who only looked in newspapers or read job advertisements are seen as passively, rather than actively, looking for work and so are not considered unemployed. The ABS view is that 'only looked in newspapers' does not meet the active search criterion, nor does simply looking at job advertisements on the Internet. It is impossible to obtain work by looking at a job advertisement without some additional, active, job search step (for example, contacting the employer).

Not in the labour force

22 Persons not in the labour force comprise those in the population who satisfy neither the employment nor unemployment criteria. They include persons who don't want to work for a variety of reasons, such as homemakers and retirees from the labour force, and those who cannot work as a result of a disability. It also includes people who are in hospital, prison, or other institutions.


DATA QUALITY

23 Care has been taken to ensure that the estimates in this publication are as accurate as possible. There remain, however, other factors which may have affected the reliability of results, and for which no specific adjustments can be made. The following factors should be considered when interpreting these estimates:

• Information recorded in this survey is essentially 'as reported' by respondents, and hence may differ from that which might be obtained from other sources or by using other collection methodologies. Responses may be affected by imperfect recall or individual interpretation of survey questions.

• The labour force characteristics of Indigenous people vary according to remoteness. Differences when comparing estimates between states and territories are therefore likely to be influenced by the distribution of Indigenous people by remoteness within the respective states and territories.

• Some states and territories have relatively small Indigenous populations, therefore the estimates are likely to be based on a very small sample which in turn may affect the data quality.

• The labour force characteristics of Indigenous people living in discrete Indigenous communities can be influenced by whether the community is participating in CDEP. Because of the small number of Indigenous communities selected in the LFS, there is the potential for wide statistical fluctuations in estimates of labour force characteristics of remote Indigenous communities over time if the sample moves from communities participating in CDEP to those which do not (or vice versa). Furthermore, communities that were selected during 2009 may have reported different labour force characteristics before and after the reforms to CDEP in July 2009.