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Labour Statistics: Concepts, Sources and Methods was originally released in 2001 in both electronic and paper versions (cat. no. 6102.0). The paper publication will not be rereleased. However, the web version (cat. no. 6102.0.55.001) is being updated on an ongoing basis. This chapter was updated on 15 December, 2005.


INTRODUCTION

7.1 The labour force framework discussed in Chapter 2 categorises the population into three mutually exclusive groups: employed; unemployed; and not in the labour force. This chapter discusses the concept 'not in the labour force'. It follows on from the discussion on employment (Chapter 3) and unemployment (Chapter 6 ) and concludes the discussion on the currently economically active population.


CONCEPTS AND INTERNATIONAL GUIDELINES

7.2 According to the international standards (Thirteenth International Conference of Labour Statisticians 1982), the population not currently economically active (that is, not in the labour force) comprises all people not currently employed or unemployed, irrespective of age. Theoretically, then, those not in the labour force include people below the age specified for measuring the economically active population and older people who have retired from the workforce. The standards recognise that, for analytical purposes, the economically active population may be related to the total population to derive a crude participation rate or, more appropriately, to the population above the age prescribed for the measurement of the economically active population. In practice, many countries restrict the population scope of household surveys, and provide separately sourced estimates for those below the age limit when a total population estimate or a crude participation rate is required (e.g. for international reporting).



7.3 Not all people who are classified as not in the labour force are voluntarily inactive; some want to work but are classified as not in the labour force because they do not satisfy the criteria for unemployment (active job search and availability to start work - see Chapter 6 for further discussion).

7.4 The international guidelines (Thirteenth International Conference of Labour Statisticians 1982) recommend that people not in the labour force may be classified by reasons for inactivity, which are listed as:

• attendance at educational institutions;

• engagement in household duties;

• retirement or old age; and

• other reasons such as infirmity or disablement.

• keeping house (unpaid)

• retired

• only in education (students)

• not working and not wanting to work (voluntarily inactive)

• permanently unable to work

• in institutions (hospitals, jails, sanatoriums, etc.)

• members of contemplative religious orders

• only undertaking unpaid voluntary work for a charitable organisation.
  

• the reduced questionnaire module for personal interviews does not ask respondents about the reasons they did not actively look for work. Therefore, the reduced questionnaire module does not identify 'future starters'. Future starters are people who were not employed during the reference week, were waiting to start a 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. Using the reduced questionnaire module such people are classified as not in the labour force rather than as unemployed (about 3% of unemployed); and

• in the Labour Force Survey, people on workers' compensation 'last' week and not returning or 'don't know if returning' to work, and people away from work for four weeks or more without pay, are classified as either unemployed or not in the labour force. Using the reduced questionnaire module, all people absent from work, but who usually work one hour or more a week, are classified as employed (about 0.1% of employed).
  

• had actively looked for work (in the four weeks up to the end of the survey reference week) but did not meet the availability criterion to be classified as unemployed; or

• were not actively looking for work but were available to start work within four weeks (from the end of the reference week) or could start work (within four weeks from the end of the reference week) if child care was available.

• people meeting the first set of criteria above (wanting to work, actively looking for work, not available to start work) would have been classified as unemployed if the unemployment criterion 'currently available for work' had been waived;

• people meeting the second set of criteria above (wanting to work, not actively looking for work, available to start within four weeks) would have been classified as unemployed if the unemployment criterion 'active job search' had been waived and the criterion 'currently available for work' had been relaxed to include the next four weeks. The circumstances that would permit people to start a job are likely to differ between people in the labour force and those not in the labour force. Accordingly a reference period of four weeks for the availability criterion is adopted, rather than current availability, as for the unemployed.

• considered to be too young or too old by employers

• lacked necessary schooling, training, skills or experience

• difficulties with language or ethnic background

• no jobs in their locality or line of work

• no jobs available at all.

7.1 CONCEPTUAL FRAMEWORK: PERSONS NOT IN THE LABOUR FORCE

• the Labour Force Survey

• the Persons Not In the Labour Force Survey

• the Census of Population and Housing

• Special Social Surveys.
  
  

• looking for work (i.e. either undertook active job search and were not available to commence work, or undertook only passive job search)

• not looking for work

• permanently unable to work

• in institutions.