Major Rebenchmarking of Labour Force Estimates

Impacts of Labour Force rebenchmarking to preliminary rebased estimated resident population from July 2016 to October 2022.

Released
15/12/2022

From benchmarks to estimates

“Benchmarks” refer to the population estimates that Labour Force Survey (LFS) data are aligned to, so that they accurately represent the Australian population. That is, how the monthly survey sample of around 50,000 people can effectively represent the 21 million usually resident civilian population aged 15 years and over.

To ensure that labour force statistics most effectively represent the labour market status of the population, data from the Labour Force Survey are ‘weighted up’ to the population benchmarks. Population benchmarks are based on Australia’s official population statistics – the Estimated Resident Population (ERP).

Every five years, the ABS 'rebases’ Australia’s official population estimates to a new Census. In June 2022, the ERP for Australia and the states and territories were rebased to the 2021 Census, with population estimates revised back to the previous Census base of the June quarter 2016. In the subsequent months, regional population estimates were also rebased and revised. Further information on this can be found in Methodology used in rebased population estimates, June 2021.

Following this, the Labour Force population benchmarks are also updated to reflect the rebased ERP. Rebenchmarking does not involve any change to the underlying data collected in the Labour Force Survey, just the population benchmarks that survey data is weighted to.

This five-yearly process is referred to as “major rebenchmarking”, to differentiate it from the regular and ongoing “quarterly rebenchmarking” undertaken in the February, May, August, and November reference months. See Labour Force, Australia methodology for more information.

Major rebenchmarking has resulted in revisions to Labour Force estimates going back to July 2016. From July 2021, this rebenchmarking also includes revisions to population component data for natural increase, overseas migration, and interstate migration (that is, the regular quarterly rebenchmarking revisions after the most recent Census base).

To help understand these two overlapping rebenchmarking processes, this article presents information on revisions at June 2021 (at the end of the ‘major rebenchmarking revision period) and October 2022 (at the end of the current ‘quarterly revision period’).

Similar to the last five-yearly cycle, Labour Force estimates will undergo a second major rebenchmarking to the final rebased ERP in the November 2023 issue, in December 2023.

National revisions to level estimates

Major rebenchmarking to preliminary rebased ERP had a negligible impact on headline indicators from July 2016 to June 2021, with revisions of less than 0.1 pts at the Australia level for the seasonally adjusted and trend unemployment rate, participation rate and employment to population ratio. Seasonally adjusted employment at June 2021 was revised down by 21,200 people (0.2 per cent), and in line with this, hours worked was revised down by 0.4 million hours (0.0 per cent).

Rebenchmarking from July 2021 onwards also includes quarterly revisions to population component data which is particularly impacted by revisions to the net overseas migration (NOM) component, as international travel has resumed. Given the extent of disruption in overseas migration patterns during the COVID-19 pandemic, there have been larger than usual revisions to NOM during 2022, underpinning an upward revision to seasonally adjusted employment of 87,500 people (0.6 per cent) for October 2022, and a similar (0.6 per cent) upward revision to seasonally adjusted hours worked.

National revisions - Trend
 Revision Jun-21Revision (%) Jun-21Revision Oct-22Revision (%) Oct-22
Trend    
Employed people-19,500-0.1%96,5000.7%
Unemployed people-1,000-0.1%8,8001.8%
Unemployment rate0.0 ptsna0.0 ptsna
Employment to population ratio0.0 ptsna0.0 ptsna
Participation rate0.0 ptsna0.1 ptsna
Monthly hours worked in all jobs-0.3 million0.0%18.2 million1.0%
National revisions - Seasonally adjusted
 Revision Jun-21Revision (%) Jun-21Revision Oct-22Revision (%) Oct-22
Seasonally adjusted    
Employed people-21,200-0.2%87,5000.6%
Unemployed people-1,200-0.2%6,8001.4%
Unemployment rate0.0 ptsna0.0 ptsna
Employment to population ratio0.0 ptsna0.0 ptsna
Participation rate0.0 ptsna0.1 ptsna
Monthly hours worked in all jobs-0.4 million0.0%12.3 million0.6%

The difference in revisions for the major rebenchmarking revision period and the quarterly rebenchmarking revision period can be seen in the following graph for employed people, with the larger revisions coinciding with quarterly revisions to benchmarks associated with increasing cross-border migration through 2022. 

Quarterly revision period is from July 2021 to October 2022 and includes major rebenchmarking revisions and regular quarterly rebenchmarking revisions to component data.

The age groups with the largest revisions across the rebenchmarking period were those aged 15 to 34 years. From July 2016 to March 2022, revisions to seasonally adjusted employment for these ages followed a downward pattern which was driven by the rebenchmarking to preliminary rebased ERP.

Since the reopening of international borders from March 2022, there has been a consistently higher NOM component in Labour Force benchmarks, reflecting increases in temporary student visa arrivals and low levels of departures. This has resulted in upward revisions to seasonally adjusted employment for the 15 to 34 age group. From April 2022 onwards, revisions to the 15 to 34 age group followed an upward pattern, with the largest revision of 58,200 people (2.8 per cent) for the 15 to 24 age group in October 2022.

Revisions from July 2021 to October 2022 include major rebenchmarking revisions and regular quarterly rebenchmarking revisions to component data.

Revisions to state and territory level estimates

In line with the revisions to ERP, the largest relative revisions to seasonally adjusted employment at the state and territory level were for Tasmania and the Australian Capital Territory, both of which were revised upwards.

Revisions from July 2021 to October 2022 include major rebenchmarking revisions and regular quarterly rebenchmarking revisions to component data.

State and Territory revisions, June 2021 - Seasonally adjusted
 New South WalesVictoriaQueenslandSouth AustraliaWestern AustraliaTasmaniaNorthern TerritoryAustralian Capital Territory
Employed people4,108,5003,371,5002,656,300884,7001,447,500278,900129,300247,600
Revision-1.3%-1.9%0.2%2.1%2.9%6.9%1.7%6.9%
Employment to population ratio62.4%63.0%63.1%59.5%65.3%59.1%67.3%68.0%
Revision-0.1 pts-0.1 pts0.0 pts0.1 pts0.1 pts0.8 pts0.2 pts0.5 pts
Unemployment rate5.1%4.6%5.2%5.3%5.0%4.7%4.8%4.9%
Revision0.0 pts0.0 pts0.0 pts0.0 pts0.0 pts0.0 pts0.0 pts0.1 pts
Participation rate65.7%66.0%66.5%62.8%68.8%62.0%70.7%71.5%
Revision-0.1 pts-0.1 pts0.0 pts0.1 pts0.1 pts0.9 pts0.2 pts0.6 pts
Monthly hours worked in all jobs571 million431 million374 million119 million203 million37 million19 million34 million
Revision-1.2%-2.0%0.4%2.3%3.1%7.3%1.6%6.8%

 

From July 2021 onwards, upward revisions to NOM had the greatest relative impact on estimates for the Australian Capital Territory (with the number of employed people revised up by 5.5%) and Victoria (up by 3.9%).

State and Territory revisions, October 2022 - Seasonally adjusted
 New South WalesVictoriaQueenslandSouth AustraliaWestern AustraliaTasmaniaNorthern TerritoryAustralian Capital Territory
Employed people4,293,1003,501,7002,786,700921,6001,504,100287,800140,600261,200
Revision-0.7%-0.5%0.6%2.7%3.3%7.1%2.4%8.8%
Employment to population ratio64.2%64.2%64.1%61.0%66.3%60.0%71.0%70.7%
Revision0.0 pts-0.1 pts0.0 pts0.2 pts0.1 pts0.9 pts0.2 pts0.9 pts
Unemployment rate3.0%3.7%3.3%4.1%3.6%3.9%3.7%3.1%
Revision0.0 pts0.0 pts0.0 pts0.0 pts0.0 pts-0.1 pts0.0 pts0.0 pts
Participation rate66.3%66.7%66.2%63.6%68.8%62.5%73.8%73.0%
Revision0.0 pts-0.1 pts0.0 pts0.2 pts0.1 pts0.9 pts0.2 pts0.9 pts
Monthly hours worked in all jobs605 million481 million392 million126 million213 million38 million20 million35 million
Revision-0.8%-0.6%0.9%2.7%3.5%7.5%2.6%9.1%

Revisions to labour market regions

Major rebenchmarking resulted in revisions to regional Labour Force statistics. For the two largest states, these reflected a downward revisions pattern for employed people in Greater Sydney and Greater Melbourne, and upward pattern for those people living outside of the capital cities.

Revisions from July 2021 to October 2022 contain major rebenchmarking revisions and regular quarterly rebenchmarking revisions to component data.

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