6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Feb 2018
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 12/02/2018
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This document was added or updated on 26/05/2020. LABOUR STATISTICS EXPLAINED
The monthly Labour Force release includes original, seasonally adjusted and trend estimates of important headline labour market indicators. The detailed release and the quarterly release include a range of products that assist in further understanding the state of the labour market, such as whether patterns of work are changing. How are the labour force estimates collected? The Labour Force Survey is a large survey which around 26,000 households respond to each month; the equivalent of about 50,000 people – or around one in every 312 Australians aged 15 years and over. The target survey response rate of between 93%-95% is higher than that of all other OECD countries, which ensures that Australia has highly reliable information about its labour market. Households selected in the Labour Force Survey traditionally responded through a telephone or face-to-face interview; however, since April 2014 all private dwellings have been provided the option of using online electronic collection. Online collection take up rates have remained consistent at around 20% since April 2014. Households selected in the Labour Force Survey are sent a letter and brochure informing them that they have been selected to participate in the survey. Since February 2014, survey respondents have been asked to use the unique user name and password provided in the letter to register an email address and other contact details for the household, or to contact the ABS if they are unable to participate in the survey online. A notification is then sent to respondents who have registered their contact details electronically to advise that the survey questionnaire is available for completion online within a specified one week period. Respondents who are unable to participate in the survey online, along with respondents who register contact details for the household electronically but do not complete the survey questionnaire online within the specified one week period, are subsequently contacted by an ABS interviewer to complete the survey questionnaire either via telephone or face-to-face. What are ‘rotation groups’? The 26,000 households surveyed in the monthly Labour Force Survey are required to complete the survey for 8 months. Each month, 1/8 of the survey households are “rotated out” and replaced by a new group, generally drawn from the same geographic area. By having 7/8 of the households the same from one month to the next, the ABS ensures the survey estimates best reflect of what is happening in the labour market, rather than reflecting change in the sample. The rotation process also limits the burden on households who will only be in the sample group for eight months. While the outgoing and incoming groups will always have different characteristics, the design of the survey, including weighting and estimation processes, ensures that these differences are generally relatively minor and do not affect the representativeness of the survey and its estimates. When is the Labour Force Survey conducted? The interviews are generally conducted during the two weeks beginning on the Sunday between the 5th and 11th of each month. The information obtained relates to the week before the interview, known as the reference week. Each year, to deal with the operational difficulties involved with collecting and processing the Labour Force Survey around the Christmas and New Year holiday period, interviews for December start four weeks after November interviews start (i.e. between the 3rd and 9th December), and January interviews start five weeks after December interviews start. As a result, January interviewing may commence as early as the 7th or as late as the 13th, depending on the year. Occasionally, circumstances that present significant operational difficulties for survey collection can result in a change to the normal pattern for the start of interviewing. Who answers the questions in the Labour Force Survey? The Labour Force survey uses an Any Responsible Adult (ARA) methodology, where one person in the household completes the survey on behalf of other household members. In some group households the ABS may need to undertake separate interviews. When are labour force figures published? Data from the monthly Labour Force Survey are released in two stages. The first release of estimates from the Labour Force Survey are usually published in Labour Force, Australia (cat. no. 6202.0) are released monthly - on the third Thursday in the month following collection. The Labour Force, Australia, Detailed Electronic Delivery (cat. no. 6291.0.55.001) and Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003) are part of the second release, and include detailed data not contained in the Labour Force, Australia (cat. no. 6202.0) product set, which is released one week earlier. The Labour Force, Australia, Detailed - Electronic Delivery (cat. no. 6291.0.55.001) is released monthly - on the fourth Thursday in the month following collection. Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003) includes data only collected in February, May, August and November (including industry and occupation). Is there a list of all the publications that provide data on Australia's labour market? A full list of publications can be found in Chapter 35: Labour Statistical Outputs and Analytical Articles. What is the scope of the Labour Force Survey? The scope of the LFS is restricted to persons aged 15 years and over and excludes the following persons:
Which labour force series should I use - seasonally adjusted or trend estimates? Each month the ABS publishes a range of seasonally adjusted and trend estimates in Labour Force, Australia. The trend series smooths the more volatile seasonally adjusted estimates, and provide the best measure of the underlying behaviour of the labour market. Understanding trend data Trend data provides the best measure of the labour market, as it specifically excludes seasonal factors (for example, employment always increasing in December) and irregular effects (a one-off event, like the Commonwealth games). It also smooths out month-to-month sampling variability. Trend data provides the best means of determining whether the labour market is strengthening or softening, and how the composition of the labour market is changing over time. Understanding seasonally adjusted data Seasonally adjusted estimates have seasonal effects removed, but they still contain the irregular elements, including month-to-month sampling variability. This means that monthly seasonally adjusted estimates provide a less reliable indication of labour market trends. For further information, see: Time Series Analysis: The Basics. Do labour force data provide a measure of jobs? Labour force data provides a measure the number of people who are employed. They are not a measure of the number of jobs. The Labour Force Survey is designed to produce estimates of the number of people engaged in economic activity, and the definition used aligns closely with international standards and guidelines. The concept of employment used in the Labour Force survey (and other ABS household surveys) differs to the concept used in ABS business surveys, where estimates are based on the number of jobs involving paid employment. For example, a person holding multiple jobs with different employers would be counted in ABS household surveys as employed once, but in ABS business surveys would be counted once for each job that they held. In 2017, the ABS released data from the experimental Australian Labour Account. The Australian Labour Account includes jobs as one of its four quadrants of labour, along with persons, volume, and payments, and sources data from a number of ABS household and business surveys. Why do ABS unemployment figures and Government job seeker income support figures differ? Comparisons are often made between the official unemployment estimates published by the ABS and figures produced by the Department of Social Services on the number of people receiving government job seeker income support. These two sets of information actually tell us different but related things about people who aren’t currently working. The ABS measure, which is based on international labour standards, examines whether people are working and, if they aren’t, what activities they are undertaking to find work, and whether they are available to start work right now. In contrast, the job seeker income support figures provide the number of people who aren’t working who have sought, were eligible for and are receiving income support payments. Not all people receiving income support are 'unemployed' as defined by the ABS, while those classified by the ABS as 'unemployed' may not necessarily be receiving income support (for instance, an unemployed person may not be eligible for income support payments due to income and assets tests, or they may not choose to seek income support payments). Conversely, a person receiving income support may not be classified by the ABS as unemployed if they did more than one hour of paid work in the survey week, or are not available to start work immediately. No data from the Department of Social Services on the number of people receiving government job seeker income support is used in compiling the labour force figures. Analysis generally shows that changes in persons on unemployment benefits and changes in the unemployment rate track reasonably consistently over time. For more information on how unemployment is defined, see: How does the ABS measure unemployment. Where are Labour Force figures for my region? Regional labour force data are published according to the Australian Statistical Geography Standard (ASGS) at the Greater Capital City Statistical Area (GCCSA) and the Statistical Area Level 4 (SA4) on a monthly basis in Labour Force, Australia, Detailed (cat. no. 6291.0.55.001). Each SA4 is designed to reflect, as best as possible, a discrete labour market within a state or territory, subject to the population limits imposed by the size of the Labour Force Survey sample. An interactive mapping tool, which shows the boundaries for each SA4, is available at: http://stat.abs.gov.au/itt/r.jsp?ABSMaps The Labour Force Survey is designed primarily to provide accurate national estimates, with the secondary design objective of producing state and territory estimates. Regional estimates are compiled from smaller sample sizes at a lower level of statistical quality compared to those produced at state and territory and national levels. For this reason, especially in regions with small populations, the ABS recommends that analysis of regional labour force estimates should be based on annual averages (as presented in Table 16(b) of Labour Force, Australia, Detailed (cat. no. 6291.0.55.001)). It is also important to note that estimates are based on the place of usual residence, while respondents may be employed in a different region to where they live. This is particularly relevant for regions around capital cities, with workers often travelling across regional boundaries to central business districts, and labour market outcomes are more likely to reflect activity in these areas. For more information on understanding and reporting regional labour force data, see: Advice on reporting regional labour force data. Why do some numbers change a lot from one period to the next? Generally with labour statistics figures, this is either a reflection that you are using data at a finer level than it is designed for, which is therefore subject to a high level of sampling variability, or that the figures relate to something that is highly variable. By sampling variability, the ABS is referring to the level of sampling error in survey-based statistics. Sampling error occurs because a sample, rather than the entire population, is surveyed. All ABS survey statistics have information on survey sampling error. As a rule, the smaller the sample that estimates are based on, the more likely it will be to see a higher level of sampling variability over time. There are a number of different approaches to reducing this variability over time, with a rolling annual average being the most commonly used. For an example of this approach, using regional labour force data, see: Advice on reporting regional labour force data. In addition, for key series, the ABS also produces trend figures, which provide the best measure of the underlying behaviour in the labour market. Commentary in ABS labour statistics releases tend to focus on these statistics, wherever possible. How far back are the Labour Force Survey data available? The earliest labour force estimates are available on the web site is from August 1966 in The Labour Force, Preliminary Estimates, Feb 1969 (cat. no. 6203.0). In the first published preliminary data for August 1966, the participation rate was 59.4% of the 8.1 million people in the total civilian population aged over 15, and the unemployment rate was 1.4%. The Labour Force Historical Time Series, Australia, 1966 to 1984 (cat. no. 6204.0.55.001) presents spreadsheets of some of the commonly used data from the Labour Force Survey for the period from 1966 to 1984. Data for 1966-2002 is also available in a hard copy for each publication in Labour Force, Australia (cat. no. 6203.0) and The Labour Force, Australia, 1978-95 (cat. no. 6204.0). These publications present a time series of key data items in one table. Current labour force information is available in the monthly Labour Force, Australia publication (cat. no. 6202.0), with data available from 1978. Have there been any changes to Labour Force Survey? Refer to Chapter 19.1: Labour Force Compatibility Over Time. Where can I find copies of the survey questions? Refer to Appendix 2: Survey Questionnaires. I have been selected to complete an ABS survey, where do I find more information? On the ABS website, select "Complete your survey" to find more information about the surveys, and how to complete your survey online. What is the definition of unemployed? Unemployed persons are defined as all persons aged 15 years and over who were not employed during the reference week, and:
For more information, watch this video: More Than Just Unemployed. What is the definition of employed? Employed persons are defined as all persons aged 15 years and over who, during the reference week:
For more information watch this video: More Than Just Unemployed. How employment is measured: The one hour rule Less than 50 people in the sample of 50,000 reports they only work one hour. That works out to be 15,000 people out of around 12 million employed (or 0.1%), and movements in this number are not large enough to affect total employment. The ABS defines people as 'employed' if they work one hour or more in the reference week. The vast majority of part-time employed people work more than 15 hours. The 'one hour rule' is used internationally and allows employment figures to be compared with other countries. It has been used in Australia since the Labour Force Survey began, enabling comparisons to be made over a long period of time. The ABS also has a range of other measures, such as underemployment, that help to understand how many people are fully employed, and how many would like to be working more. What are contributing family workers? If family members contribute to the output of an unincorporated enterprise, they are assumed to receive an element of remuneration in kind, and thus they are treated as being in the economically active population. As such, Australian labour statistics include estimates for contributing family members, even though other unpaid work is excluded. This concept was first introduced in April 1986, when the questionnaire was revised following the extension of the definition of employed persons to include persons who worked without pay between 1–14 hours per week in a family business or on a farm (i.e. contributing family workers). This definition aligned the Australian labour force concepts with the set of definitions adopted by the 13th International Conference of Labour Statisticians in October 1982. Previously, contributing family workers who worked 1–14 hours, or who had such a job but were not at work, were defined as either unemployed or not in the labour force, depending on whether they were actively looking for work. I am a volunteer - would I be counted as employed? Volunteers are people who willingly give unpaid help, in the form of time, service or skills, to an organisation our group. Included in this category are the volunteer component of boards of management, fundraising committee members and auxiliary members. Unpaid work and volunteer services are generally in scope of the System of National Accounts production boundary, however they are generally not considered in scope of the Australian production boundary in the Australian System of National Accounts and labour household surveys. I am waiting to start my new job, am I employed or unemployed? If you are waiting to start your new job we refer this as a ‘future starter’: that is, those persons 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. Under International Labour Organisation (ILO) guidelines, future starters do not have to be actively looking for work in order to be classified as unemployed. What is the difference between full-time and part-time employment? The ABS classifies people as employed full-time if they worked, or usually work, 35 or more hours in the survey reference week. This includes people who were employed in two or more part-time jobs and in total worked more than 35 hours. Part-time workers are those who worked, and usually work, less than 35 hours in the survey reference week. Changes in full-time and part-time employment reflects people starting and finishing jobs (with various hours of work), but also ongoing variation in the hours worked by employed people remaining in the same jobs. It is important to remember this when looking at the ‘net’ change. The full-time/part-time status classification differs from the criteria for being casual – something that is often not understood. The classification of full-time and part-time employment is based on hours worked, whereas a person being classified as casual is unrelated to the hours they work. Instead, the concept of casual employment is determined by whether or not an employee has access to leave entitlements like paid sick leave or holiday leave. One way to help understand this is that someone can be a casual employee (i.e. not have paid sick or holiday leave) but work full-time. Why does Australia only survey people over 15 years of age? The international standards and guidelines recognise the need to exclude persons below a certain age from the measures, without specifying a particular age limit. The responsibility for setting such limits lies with individual countries. Examples of factors influencing the age limit are:
Australian labour and compulsory schooling legislation have resulted in low numbers of young people being involved in economic activity. While such legislation varies from state to state, the net result is that age 15 is the lowest practical limit at which it is feasible and cost-effective to measure the participation of young persons in economic activity with acceptable accuracy through household surveys. It should also be noted that this limit applies to all workers, including contributing family workers who perform unpaid work in a family business or farm. Australia has adopted a minimum age limit of 15 years and over in the labour household surveys, while labour business surveys collect information irrespective of the age of the employee. How many households are surveyed in the Labour Force Survey in Australia and each State and Territory every month? The sample design is specified in terms of selecting a proportion of dwellings within the state/territory. This is known as the sampling fraction. Traditionally the sampling fraction is not changed during the five-year life of the sample design, meaning that the sample size increases over time as the population size grows, resulting in a gradual increase in the number of persons enumerated during the life of each sample design. Table 34.1: Sampling Fractions
Below is the average number of dwellings (including non-private dwellings) responding to the Labour Force Survey each month. Table 34.2: Average number of responding dwellings and persons each month, 2016/17
For more information refer to Information Paper: Labour Force Survey Sample Design, May 2013 (cat. no. 6269.0). What does the ABS mean by labour force “benchmarks” and “rebenchmarking”? Labour force statistics measure key aspects of the Australian labour market, and provide some of the most important economic and social indicators. For this reason, it is important to ensure that labour force statistics are of the highest quality, and most effectively represent the labour market status of the population. “Benchmarks” refer to the population estimates that Labour Force Survey (LFS) data are aligned to, so that they effectively represent the population. That is, how the large monthly sample of 50,000 people can effectively represent the 20 million usually resident civilian population aged 15 years and over. There are two key inputs to the labour force estimates:
The first of these are population benchmarks, which are based on population estimates, while the second is based on the data that are collected in the LFS. To produce labour force estimates, data from the LFS are "weighted up" to the total population benchmarks. Since only a sample of the population can be surveyed every month, this weighting process transforms the survey data into representative estimates, which provide a picture of the entire population. “Rebenchmarking” is the process of updating the total population figures that the labour force estimates are weighted up to, as new Estimated Resident Population (ERP) figures become available in Australian Demographic Statistics (cat. no. 3101.0). Where do I find information on.....? The Labour Force Survey Standard Products and Data Item Guide (cat. no. 6103.0) is a useful reference for users seeking different data variables from the Labour Force Survey. The guide is divided into two sections:
Commonly sought data items are listed below:
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