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How exactly is employment measured? Last updated: September 2007 …
Tags: census, employment data, employment rates, estimates, introduction 3, jobs, labour force survey, preface, reconciliation, statistics, workforce,Pages: 25
Language: english
Created: Thu Sep 20 15:42:45 2007
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How exactly is employment measured?
Last updated: September 2007
Contents
Preface............................................................................................................................ 2
1. Introduction ............................................................................................................ 3
2. Concepts .................................................................................................................. 4
2.1 Employment ............................................................................................................... 4
2.2 Jobs ............................................................................................................................ 6
3. Measuring employment - The Labour Force Survey ......................................... 8
3.1 The Labour Force Survey (LFS)................................................................................ 8
3.2 Employment rates ...................................................................................................... 8
3.3 Use of employment data............................................................................................. 8
4. Workforce Jobs .................................................................................................... 10
4.1 Constructing Workforce Jobs estimates .................................................................. 10
4.2 Use of Workforce Jobs estimates............................................................................. 11
5. The effect of the 2001 Census on estimates of employment and jobs.............. 12
6. Towards reconciliation ........................................................................................ 13
7. Regional and Local Statistics............................................................................... 14
7.1 Regional................................................................................................................... 14
7.2 Local ........................................................................................................................ 14
7.3 Neighbourhood Statistics......................................................................................... 15
8. Further Information ............................................................................................ 16
Annex A........................................................................................................................ 18
The Labour Force Survey ................................................................................................. 18
Annex B........................................................................................................................ 20
Producing Estimates of Employee Jobs from Employer Surveys ..................................... 20
Annex C........................................................................................................................ 23
The Census of Population................................................................................................. 23
Annex D........................................................................................................................ 24
Concepts and Definitions.................................................................................................. 24
Preface
About the Office for National Statistics
The Office for National Statistics (ONS) is the government agency responsible for compiling,
analysing and disseminating many of the United Kingdom's economic, social and
demographic statistics, including the retail price index, trade figures and labour market data,
as well as the periodic census of population and health statistics. The Director of ONS is also
the National Statistician and the Registrar General for England and Wales, the agency that
administers the statutory registration of births, marriage and deaths there.
A National Statistics publication
Official statistics bearing the National Statistics logo are produced to high professional
standards set out in the National Statistics Code of Practice. They undergo regular quality
assurance reviews to ensure that they meet customer needs. They are produced free from any
political interference.
2
1. Introduction
Reliable employment statistics have to be obtained and properly interpreted for them to be a
useful aid to policy decisions affecting the labour market.
Statistics on employment tell us how many people are employed, the sorts of work they do,
their working patterns, as well as the number of jobs there are and the industries these are in.
It is important to make a distinction between the number of people with a job (employment)
and the total number of jobs. One person can have more than one job.
The International Labour Organisation (ILO) - an agency of the United Nations - sets out
guidelines for measuring employment. Under ILO guidelines anyone working for at least an
hour a week is employed. This definition is set out more fully in the section on employment
concepts.
This is very closely linked with the number of jobs. Essentially the number of jobs is
equivalent to the number of people with jobs plus the number of second jobs, third jobs, etc.
as follows:
Number Number Number of
Jobs = of people + of second + third,
with jobs jobs fourth, etc
jobs
The Office for National Statistics releases key labour market statistics through the Labour
Market Statistics First Release. This is published around the middle of each month usually on
a Wednesday. This release presents information on employment as well as a range of other
labour market indicators.
3
2. Concepts
2.1 Employment
The number of people with jobs is measured through the Labour Force Survey (LFS). The
Labour Force Survey is a survey of households. It uses definitions set out by the International
Labour Organisation (ILO).
The LFS definition of employment is anyone (aged 16 or over) who does at least one hour's
paid work in the week prior to their LFS interview, or has a job that they are temporarily
away from (e.g. on holiday). Also included are people who do unpaid work in a family
business and people on government supported employment training schemes, in line with ILO
definitions.
According to ILO definitions, those who are not in employment are either unemployed or
economically inactive depending upon their job search activity and their availability for work.
In order to explain this further, consider the following examples:
· John Williams works 40 hours a week for a large chemical company.
· June Brakes is out of work and visits her local jobcentre every week to look for work that
she could start immediately.
· Alice Barnes works 3 hours a week at the local supermarket but wants to work full-time.
· Jennifer Jermain is not employed. She looks after her young child and is not available to
work.
John and Alice are both in employment as they worked for at least one hour. June is not in
employment; she is unemployed as she is actively seeking work and available to start.
Jennifer is economically inactive as she is not available to work.
The LFS classifies employed people into one of four different categories:
· employees;
· self-employed;
· unpaid family workers;
· participants in government-supported training and employment programmes.
In the Labour Force Survey, respondents classify themselves into each of these categories,
based on their own assessment of their work situation. For the majority of people this is clear-
cut. However, for those on the margins of different groups, this is not easy. A guide is:
· employees work for a company and have their National Insurance paid for directly from
their wages.
4
· the self-employed work for themselves and generally pay their National Insurance
themselves.
· unpaid family workers are people who do unpaid work for a business they own or for a
business a relative owns.
· participants in government-supported training and employment programmes are all
people aged 16 and over who take part in one of the government's employment and
training programmes.
Chart A: Labour Force Survey, UK, May to July 2007, seasonally adjusted
Employees (86.1 %)
Self employed (13.1 %)
Unpaid family workers
(0.4 %)
Government supported
trainees (0.4 %)
Chart A shows the proportion of those in employment in each of these categories for the May
to July 2007 period.
The following examples illustrate this:
· Janice Joyce works 20 hours a week in her father's shop. She receives no money for this.
· Harry Hepburn runs a corner shop as a sole trader.
· Jim and Janet work for a large manufacturing company. They job-share with each of them
working 20 hours a week.
Janice is employed as an unpaid family worker. Harry is self-employed. Jim and Janet are
both in employment as employees.
The Labour Force Survey also classifies employed people into full-time workers and part-
time workers; this breakdown is based on respondents' self-classification.
5
2.2 Jobs
A job represents a work activity carried out by a jobholder. A person may hold more than one
job.
The estimate of the number of jobs is the sum of:
Employee jobs number of jobs of employee status
Self-employment jobs number of self-employed status jobs
HM Forces number of jobs in the Armed Forces - excluding
civilians
Government supported trainees number of jobs held by people on Government-
supported employment and training programmes
who do not have employee status
Chart B shows the proportion of Workforce Jobs in each of these categories in June 2007.
The major part of the estimate is the number of employee jobs, which is collected through
surveys of employers. Employers are asked for details of the number of people who work for
them on specific dates during the year. This includes people temporarily away from a job but
still being paid by the organisation. The employee jobs series includes second and subsequent
jobs.
Employee workers are those who work for an organisation and have their National Insurance
paid for directly from their wages. Self-employment jobs are held by people who work for
themselves and pay their National Insurance themselves.
Chart B: Workforce Jobs, seasonally adjusted, June 2007
Employee Jobs (85.9 %)
Self employment jobs
(13.3 %)
HM Forces (0.6 %)
Government supported
trainees (0.2 %)
6
Perhaps the easiest way to consider this is through examples.
· A large chemical company employs John Williams to work 40 hours a week.
· A pharmaceutical office employs Jim and Janet who job-share for 20 hours a week each.
· Janice Joyce works in her father's shop. She does not receive any money for this.
John's job would appear in the Workforce Jobs series as a full-time employee job. Jim and
Janet's jobshare would be counted as two part-time employee jobs in the Workforce Jobs
series.
Janice's work would not be counted because unpaid family workers are not included in the
Workforce Jobs series.
The following more detailed examples may also help:
· Alice Barnes works 3 hours a week in a local supermarket but wants to work full-time.
· Harry Hepburn runs a corner shop as a sole trader.
Alice's job would be included in the Workforce Jobs series as an employee job. Harry's job
would be included as a self-employment job.
7
3. Measuring employment - The Labour Force Survey
3.1 The Labour Force Survey (LFS)
The Labour Force Survey was carried out every two years from 1973 to 1983. In 1984 the
United Kingdom adopted ILO definitions in the LFS. This was also the first year in which the
survey was conducted on an annual basis with results available for spring quarters (March to
May). The survey moved to a continuous basis in spring 1992 in Great Britain and in winter
1994/5 in Northern Ireland. Results were published four times a year for seasonal quarters.
From April 1998, results are published monthly for the latest consecutive 3-month period.
(For more details on LFS design, see Annex A.)
As well as measuring the number of people in employment, the LFS collects information on
working patterns (full-time/part-time status, temporary or permanent work, hours worked), on
the industry of the organisation people work for and the occupation they have. The LFS also
collects detailed information on a range of other topics such as personal circumstances, union
membership, health, ethnicity and disability.
All these details are based on the respondents' perception of their working status. For
example, the numbers in full and part-time employment from the LFS are based on self-
classification by respondents.
As the LFS is a survey of private households, employment estimates reflect the area of
residence of people with jobs.
3.2 Employment rates
The headline employment rate is the proportion of the working-age population who are in
employment. The working-age population comprises men aged 16-64 and women aged 16-59
and therefore takes account of both the school leaving age and the state pension age currently
prevailing in the UK.
However, employment rates can also be presented as the proportion of the population aged 16
and over who are in employment, as well as other age groups.
The employment rate shows changes in employment in the context of changes in the
population. Employment rates also allow comparisons of employment for areas with different
population sizes.
3.3 Use of employment data
The LFS provides a more complete measure of employment than the employer survey data.
However, the LFS does have some shortcomings. These are in terms of coverage,
interpretation of data over time and sampling variability.
The Labour Force Survey is a survey of private households, student halls of residence and
National Health Service accommodation. Students in halls of residence are included through
their parents' home. The LFS excludes people who live in communal establishments. This
means that the LFS misses employed people living in establishments such as boarding
schools, workers' hostels and residential homes. Around 1% of the population are excluded
because of this.
8
Publishing the latest three months' average data each month leaves several options for
comparing over time. ONS recommends that, for seasonally adjusted data, comparisons over
time should be made with the preceding non-overlapping three-month average, for example
April to June 2007 compared with January to March 2007. For non-seasonally adjusted data,
comparisons should be made with the same period a year ago.
The sampling process introduces sampling variability into the figures. The easiest way to
explain this is by example. In the May to July 2007 period, there were estimated to be
29,096,000 people aged 16 and over in employment in the United Kingdom, according to the
LFS (seasonally adjusted). These figures were published in the September 2007 Labour
Market Statistics First Release.
If we drew another sample for the same period we could get a different result, which could be
higher or lower.
In theory, we could draw many samples, and each would give a different result. The spread of
these results leads to sampling variability. Once we know the sampling variability we can
calculate a range of values about the sample estimate that represents the expected variation
with a given level of assurance. This is called a confidence interval.
For a 95% confidence interval we expect that in 95% of the samples the confidence interval
will contain the true value of employment that would have been obtained by surveying the
entire population. For example, for May to July 2007, we can be 95% confident that the true
level of employment was within 135,000 of the estimate of 29,096,000 (ie, within the range
28,961,000 to 29,231,000).
Sampling variability also affects changes over time. Changes in employment between three-
month periods are rarely greater than the level that is explainable by sampling variability. It is
estimated that the number of people aged 16 and over in employment in the United Kingdom
increased by 84,000 between February to April 2007 and May to July 2007 (seasonally
adjusted). We can be 95 % confident that the true change lies in the range between an
increase of 183,000 and a fall of 15,000. It is more likely that employment increased, rather
than decreased.
Additional information is available by analysing changes over time in employment rates.
Employment rates show changes in employment in the context of changes in the population.
However, the employment rate is still subject to sampling variability. The estimate of the
change in the working age employment rate between February to April 2007 and May to July
2007 was an increase of 0.1 percentage point. We can be 95 % confident that the true change
in the working age employment rate lies within the range between an increase of 0.4
percentage points to a fall of 0.2 percentage points.
Labour Force Survey employment data are available under ILO definitions from 1971.
9
4. Workforce Jobs
4.1 Constructing Workforce Jobs estimates
The Workforce Jobs series is made up of data from different sources. The components and the
data sources are shown in Table 1.
Table 1: Components and sources of Workforce Jobs
Component Source
Employee jobs Employer surveys
Administrative data
Labour Force Survey (LFS) used for
agriculture and construction
Self-employment jobs Labour Force Survey
HM Armed Forces jobs Administrative data from the Defence
Analytical Services Agency
Government-supported training jobs Administrative data from the Department
for Education and Skills (DfES),
Department for Work and Pensions
(DWP), Scottish Executive and National
Assembly for Wales.
Employee jobs is by far the largest component of workforce jobs and is mainly measured
using employer surveys, as shown in Table 2.
Table 2: Sources of Employee Jobs: employer surveys
Short-term Employment Surveys (STES): These surveys measure short-term
Monthly Production Inquiry (MPI) changes in the number of private sector
Monthly Inquiry for the Distribution & employee jobs.
Service Sector (MIDSS)
Retail Sales Inquiry (RSI)
Quarterly Public Sector Employee Measures short-term changes in the
Surveys (QPSES) include jobs in the civil number of public sector employee jobs.
service, local authorities and public
bodies.
Annual Business Inquiry (ABI) Measures the total number of private
sector employee jobs annually and
provides a benchmark for STES.
STES provides estimates of quarterly changes in the number of services jobs in the private
sector (MIDSS and RSI) and monthly changes in jobs in the production sector (MPI). These
short-term estimates of changes in the private sector are then applied to the latest ABI figures;
i.e. the ABI provides an annual benchmark for private sector employee jobs. The ABI
measures the number of employee jobs each December, with results released the following
year. STES excludes some industry sectors; e.g, where other information is available, such as
administrative sources, or if the costs would be too high, such as for agriculture and
construction where the Labour Force Survey (LFS) is used instead. The LFS is a household
survey as opposed to an employer survey.
10
The public sector employment (PSE) estimates are compiled from QPSES and various
administrative sources, such as NHS figures from the Department of Health, police figures
from the Home Office and data from the devolved administrations for Northern Ireland,
Scotland and Wales. The PSE estimates are not benchmarked.
ABI and STES take a sample of businesses from the Inter-Departmental Business Register
(IDBR). The IDBR holds details of all businesses that run a Pay-As-You-Earn tax system,
register for Value Added Tax, or are incorporated and registered at Companies House. It
provides a sampling frame from which the ONS can select organisations to send out
questionnaires. The ABI sample is approximately twice the size of the STES sample. QPSES
is a census of the public sector organisations that it covers.
In general, the employer surveys ask for details of employees on the payroll of the business
including those who are temporarily away from the workplace; e.g, those on leave. The types
of workers that employers are asked to include and exclude are shown in Table 1 in Annex B.
Annex B also contains more information on the design of the employer surveys.
Businesses give details of the number of full-time, part-time, male and female workers they
employ. Most employers refer to their payroll for this information. For the ABI and STES,
employers are asked to count people working under 30 hours a week as part-time. QPSES
defines part-time as those working less than the normal full-time hours. As these surveys are
both surveys of employers, the figures at a regional and local level reflect the location of the
jobs, not the place of residence of the worker. The ABI sample is larger and allows for
regional estimates at a more detailed level.
Self-employment jobs are taken from the Labour Force Survey and include worker's second
jobs. Government-supported training jobs are taken from administrative sources and only
include those who are receiving skills-based training in workplaces and who do not have
employee status. Those who have employee status are included in the employee jobs
component.
4.2 Use of Workforce Jobs estimates
As Workforce Jobs are mainly measured using employer surveys, some jobs are excluded; eg,
workers employed directly in private households. The ABI and the STES are both subject to
sampling variability, but the ABI's larger sample allows for a more detailed regional and
industry breakdown. The industry breakdown from the employer surveys is more reliable than
the LFS which relies on self-classification from the person being interviewed.
Estimates of total Workforce Jobs are only available at the United Kingdom and Great Britain
level. At the regional level, series are available for Civilian Workforce Jobs, which excludes
jobs in HM Armed Forces.
Employee jobs series are available annually from 1959 and quarterly from June 1978. They
are published in the monthly Labour Market Statistics First Release. Further information
from the series is published on the National Statistics website, on Nomis® and in the labour
market statistics regional First Releases. Results are currently available 11 weeks after the
reference period and are available, from 1978, classified by Standard Industrial Classification
(SIC) 92.
11
5. The effect of the 2001 Census on estimates of employment
and jobs
5.1 The publication of the initial 2001 Census results in September 2002 showed that the
UK population was 1 million lower than had been previously estimated. Given the macro-
economic importance of the LFS-based labour market estimates, ONS instituted a project to
produce interim revised UK LFS estimates, consistent with the census, to be available by the
end of October 2002. At the same time, ONS instigated a longer-term project to produce fully
reweighted LFS microdata based on the population estimates that were published in February
and March 2003.
5.2 Interim UK LFS estimates were produced, for the key aggregates, by applying a set of
adjustment factors based on the population revisions resulting from the census, taking into
account the sex and age characteristics of the population revisions. Further stages of the
interim LFS project have produced regional LFS estimates using the same method. Details of
the methods used to produce the interim estimates were published in an article in the
December 2002 edition of Labour Market Trends, and are available on the National Statistics
website:
http://www.statistics.gov.uk/about/Methodology_by_theme/downloads/Interim_reweighting_
methodology_article.pdf
5.3 ONS completed the reweighting of the 1992-2003 databases on 17 March 2004.
Further revisions to the population estimates in September and October 2003 resulted in the
continuation of the interim LFS estimates, since it was not possible to use the latest
population estimates in the reweighted LFS databases in the timescale available. Details of
this reweighting exercise were published in an article in the April 2004 edition of Labour
Market Trends, and are available on the National Statistics website:
http://www.statistics.gov.uk/articles/labour_market_trends/LFS_reweighting_and_SA_review
.pdf
5.4 Reweighted LFS estimates for 1984-1991 were published on 30 June 2004. These
have replaced the interim adjusted estimates that were previously available. On 20 October
2005 the Government Actuary's Department (GAD) published revised projections for 2005
and later years, based on the ONS population estimates published on 25 August 2005. These
revised population estimates were incorporated into LFS estimates from the December 2005
First Release. On 24 August 2006 ONS published the 2005-based mid-year population
estimates for the UK. On 7 September 2006 ONS published the 2006 Quarter 2 experimental
quarterly population estimates for England and Wales. These revised population estimates
have been incorporated into LFS estimates from the October 2006 First Release.
12
6. Towards reconciliation
The concept of employment (measured by the LFS as the number of people working at least
one hour during the survey reference week) differs from the concept of jobs, since a person
can have more than one job, and some jobs may be shared by more than one person. The LFS,
which collects information mainly from residents of private households, is the preferred
source of statistics on employment. The LFS can also be used to produce estimates of the total
number of jobs in the UK, by adding together the headline employment figures (which are
equivalent to main jobs) and those for workers with a second job. However, the WFJ series,
which is compiled mainly from surveys of businesses, is the preferred source of statistics on
jobs by industry, since it provides a more reliable industry breakdown than the LFS does.
The Review of Employment and Jobs Statistics recommended that comparisons between
estimates of jobs produced from household and business surveys should be made on a
quarterly basis. Following that recommendation, ONS now publishes regular comparisons of
estimates of jobs from the Labour Force Survey (LFS) and from the Workforce Jobs series
(WFJ) as an annex to the monthly Labour Market Overview document:
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=9539
These comparisons show that the WFJ series records substantially more jobs than the LFS.
For June 2007 the WFJ series recorded 31.69 million jobs in the economy while the LFS
recorded 30.20 million jobs a difference of over 1 million. These differences are discussed
in the Labour Market Overview document mentioned above.
13
7. Regional and Local Statistics
7.1 Regional
Regional employment data are derived from the Labour Force Survey (LFS), Annual
Business Inquiry (ABI) and Short-Term Turnover and Employment Surveys (STES).
The LFS provides an estimate of the number of people in employment, broken down into
employees, self-employed, unpaid family workers and Government-supported trainees.
Quarterly estimates of all these measures are available from spring 1992 for both Government
Office Regions (GORs) and Standard Statistical Regions (SSRs). Prior to spring 1992 annual
estimates for each spring are available back to 1984 for SSRs only. Estimates of the number
of unpaid family workers are not available prior to spring 1992.
The ABI provides an annual estimate of employee jobs, around one year after the date of the
survey. The STES are combined with the ABI to produce quarterly estimates of employee
jobs (monthly for production industries) at regional level. Quarterly estimates of employee
jobs by industry have been available for SSRs since September 1978. Quarterly seasonally
adjusted estimates of total employee jobs are available for SSRs from September 1981.
Estimates for GORs are available from 1995.
The Employee jobs series is a component of the wider measure of workforce jobs. In addition
to employee jobs, workforce jobs include estimates of self-employment jobs, Government-
supported trainees and HM Armed Forces. At regional level, data for civilian workforce jobs
are published, which exclude the figures for HM Armed Forces. The estimates of self-
employment jobs are from the LFS and also include people whose main job is as an
employee, but are self-employed in a second job. The estimates of Government-supported
trainees are supplied from administrative sources. Data for all three components are available
back to June 1983.
7.2 Local
Local area employment data are derived from the Annual Population Survey (APS)/LFS and
ABI.
The APS/LFS provides an estimate of the number of people in employment, broken down
into employees, self-employed, unpaid family workers and government trainees.
The first APS was published on 28 July 2005 and covered the period January to December
2004. It is published quarterly on a rolling 12-month basis.
Annual LFS estimates are available for 1994/95 to 2003/04, for the 12 months ending each
February; eg, data for 2003/04 covers the period March 2003 to February 2004. From March
2000, there was an enhanced sample for England, from March 2001 an enhanced sample for
Wales, and from March 2003 a boost for Scotland. The APS includes an additional boost for
local authority districts in England. A consistent time series for current unitary and local
authorities is available from 1996. Four-quarter averages, from the quarterly LFS, which are
available from Spring 1995 to Spring 2005, have been replaced by the APS.
APS/LFS data are available free from the Nomis® website - www.nomisweb.co.uk or from
the Labour Force Survey Data Service - lfs.dataservice@ons.gov.uk. There may be a charge
for this service.
14
The Annual Business Inquiry (ABI) provides an annual estimate of employee jobs, around
one year after the date of the survey. The ABI replaced the Annual Employment Survey
which itself replaced the Census of Employment. Estimates of employee jobs are available
down to ward level. Estimates are produced for both frozen and current wards (smallest
electoral areas). This means that estimates can be derived for a wide range of geographies.
The ABI is also disaggregated to postcode sectors, allowing estimates to be produced for all
levels of postcode geography. Not only are a range of geographical disaggregations available,
but the data are also presented for the full range of industries, and split by gender and by full
and part-time workers.
Estimates of Workforce Jobs, for local areas, which includes ABI data, are produced as a
numerator for the jobs density indicator. Jobs density is defined as the number of jobs per
working age resident in an area. More information on jobs density is available on the website:
http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=10549
More information is available in the Guide to Regional and Local Labour Market Statistics,
available on the website:
http://www.statistics.gov.uk/statbase/product.asp?vlnk=4752
7.3 Neighbourhood Statistics
The Office for National Statistics is leading the development of a new internet service, the
Neighbourhood Statistics Service. At its heart is the aim to supply the information needs for
the National Strategy for Neighbourhood Renewal.
The Neighbourhood Statistics Service offers users ready access to a range of local data
including the 2001 Census. Data can be viewed on-line or downloaded at no cost to users.
Data from the Annual Population Survey (APS) on housing, education, employment, ethnicity
and health are now available from the Neighbourhood Statistics website, where more
information on Neighbourhood Statistics is also available:
http://www.statistics.gov.uk/neighbourhood
15
8. Further Information
If you require further information on labour market statistics or have any enquiries related to
this publication:
Labour Market Statistics Helpline
Phone: 01633 456901
E-mail: labour.market@ons.gov.uk
Labour Force Survey Data Service
Phone: 01633 655732
E-mail: lfs.dataservice@ons.gov.uk
The LFS Data Service offers access to LFS data at two levels:
(i) National and Regional Level
LFS data at both national and regional (Government Office Region) level can be produced in
tabulated format to customer's specification. Data is provided electronically in Excel
spreadsheet format (unless otherwise specified).
Provision exists whereby customers may purchase dial-up access to LFS datasets to conduct
their own interrogation and analyses. More information is available on application.
(ii) Sub-National level
LFS data can also be provided in tabular format at sub-regional level. This enables
information on a lower geographical scale than region to be provided enabling analysis at
county level, local/unitary authority district level, travel-to-work area, etc. Data is again
provided in Excel spreadsheet format (unless otherwise specified).
Research use of APS/LFS
For research users, copies of APS/LFS and claimant count cohort databases are available
from the University of Essex Data Archive
Website: http://www.data-archive.ac.uk
Email: archive@essex.ac.uk Tel: 01206 872001
Data from Nomis®
Employment and unemployment data are available from the APS/LFS (for local areas).
Workforce jobs data are available for old standard statistical regions and at country level.
Claimant count data are available for wards and above.
Website: http://www.nomisweb.co.uk
Email: info@nomisweb.co.uk
Tel: 0191 334 2680
16
Economic and Labour Market Review
In January 2007 the Labour Market Trends and Economic Trends publications were replaced
by a new publication Economic and Labour Market Review, which is available free on the
National Statistics website: http://www.statistics.gov.uk/elmr/
It is also available in hard copy format by subscription from Palgrave Macmillan:
http://www.palgrave.com/ONS
Email: ons@palgrave.com
Tel: 01256 302195
Annual Employment Statistics (ABI)
Tel: 01633 812038
Email: annual.employment.figures@ons.gov.uk
Workforce Jobs
Tel: 01633 812318
Email: workforce.jobs@ons.gov.uk
National Statistics Public Enquiry Service
Tel: 0845 601 3034
Email: info@statistics.gov.uk
This and our other free publications:
How exactly is unemployment measured?
What exactly is the Labour Force Survey?
Guide to Labour Market Statistics Releases
Guide to Regional and Local Labour Market Statistics
are available on the National Statistics website at:
http://www.statistics.gov.uk/onlineproducts/default.asp#labour
17
Annex A
The Labour Force Survey
Design
In the Labour Force Survey, everyone aged 16 or over is classified into one of three
categories: in employment; unemployed; or economically inactive.
The Labour Force Survey is a sample survey of private households. Its design means that in
any three-month period:
· approx. 53,000 households in the UK will be interviewed;
· approx. 101,000 people aged 16 and over will be interviewed;
· representative results can be produced for the whole of the UK.
This allows publication of LFS results for the latest available three months every month. The
LFS is designed to be representative of the private household population. Those excluded live
in communal establishments and represent around 1 % of the population.
After the interviews have taken place, the results are processed. This gives figures for the
population as a whole. However, not every household responds to the survey. Official mid-
year population estimates give the total number of people living in each area by age group
and gender. From this, factors can be constructed to ensure the published results reflect the
entire household population.
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How to compare over time
When quarterly results are published 12 times a year, there are several ways of comparing
figures over time. The table below shows this:
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
06 06 06 06 06 06 06 06 06 06 06 06 07 07 07
The shaded areas show the periods for which LFS results are available. For seasonally
adjusted data, comparisons over time should be made with the periods shaded in similar
colour, i.e. compare January to March 2007 with October to December 2006 or January to
March 2006. Comparing January to March 2007 with December 2006 to February 2007 can
give false indications. For seasonally adjusted data, comparisons over recent time should be
made with the preceding non-overlapping quarter. For data that are not seasonally adjusted,
comparisons should be made with the same period a year ago.
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Annex B
Producing Estimates of Employee Jobs from Employer Surveys
Annual and Quarterly Surveys
The ONS produces an annual set of employee jobs estimates and a series of quarterly updates.
The annual dataset comes from the Annual Business Inquiry (ABI) and this dataset contains
more industrial and geographical detail than the quarterly datasets. The quarterly sample is
roughly half the size of the annual sample. The ABI uses data from the quarterly surveys
where there are overlaps in the samples.
Business Structures
There are two ways of looking at firms:
Local units are sites or workplaces. Enterprises are whole businesses under common
ownership. For example, a single site business, such as a shop which is not part of a chain is
termed a 'single site enterprise' or an enterprise with only one local unit. A 'multi-site
enterprise', as the name suggests, is a chain of shops that are under common ownership.
ONS maintains a record of businesses on its Inter-Departmental Business Register (IDBR).
The IDBR contains information on the enterprise, and on the local units linked to each
enterprise. It is updated regularly from both ONS' Business Register Survey (BRS) and from
administrative sources (VAT, PAYE and Companies House records). It provides a
comprehensive business register with well over 2 million local units.
In addition to `enterprises' and `local units', `reporting units' are groups of local units to
which questionnaires are sent and collectively surveyed. For the vast majority of businesses,
the reporting unit is equivalent to the enterprise. In other words, the business supplies
aggregate information for all of its operations and sites. These are called 'enterprise reporters'.
However, approximately 10 per cent of businesses prefer to divide the enterprise into a
number of reporting units, each of which provides separate statistical returns for groups of
local units. ONS calls these reporting units 'local unit list reporters'.
Most of ONS's business surveys are conducted at the reporting unit level rather than the local
unit level. For many variables, it makes sense to collect the information at this level. For
example, variables such as purchases and taxes might not be available at local level.
However, there are certain variables, such as employment, for which there is an obvious site
component. For employment information, there is also a strong demand among users for
local area statistics. The ABI methodology has been designed to cope with the requirement to
produce local level statistics
Sample and Questionnaire Design of the ABI
The ABI goes to a sample of reporting units drawn from the IDBR. Approximately 78,000
reporting units are selected for each year's survey covering between them around half a
million workplaces.
All businesses with 250 or more employees are surveyed each year. For smaller businesses a
sample are surveyed. Most businesses are asked to supply a breakdown of their employees
between male full-time, male part-time, female full-time and female part-time, as well as
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giving the total. The collection of employees data by gender is currently under review and it
has been proposed that this data will no longer be collected, although data relating to the full-
time/part-time split will continue to be collected. In addition, businesses are asked to give the
number of working proprietors and the number of unpaid workers, including family workers.
This employment information was sought for a particular date towards the end of the calendar
year; the rule being that this date would be the first Friday after the second Thursday in
December. This date was selected to bring the ABI/1 (employment) in line with the ABI/2
(financial) as there were advantages from an ABI/2 point of view to gather financial data at
the calendar year end. In 2004, the ONS undertook a review of the ABI. This review
identified that, by moving the reference date from December to September, the data collected
by the ABI/1 could be directly compared to the data collected by the Business Register
Survey (BRS) and the quality of the statistics improved. For the 2006 survey, businesses will
be asked to provide information on employee numbers in their organisation annually as before
but on a specified day in September; again this being the first Friday after the second
Thursday. This will also have the advantage of reducing the number of questionnaires sent to
businesses. Companies previously selected for both surveys will now only receive the BRS
questionnaire.
Table 1: Guidance to employers on filling in the employee jobs question on employment
questionnaires
Include Exclude
Employees at all sites working for the those employed by outside contractors or
named business agencies
Employees in all activities undertaken by working proprietors, partners and self-
the business employed, directors not on contracts
Temporary and casual employees those on Government-Supported Training
who do not have a contract of
employment
those off sick, on holiday, on short-time home-workers on piecework rates
or maternity leave
those on Government-Supported Training former employees still on the payroll as
who have a contract of employment pensioners
Employees who work away from the those who normally work at another
workplace such as sales reps and lorry business such as temporary transfers and
drivers secondments
Employees paid by parent company Employees under 16 years of age
Employees of any other business trading
on your premises only if they appear on
your payroll
National estimation
The first stage of the estimation process is to generate national estimates based on the
reporting unit information obtained through the survey. In simple terms, this is achieved by
generating a grossing factor for each return, and then multiplying the returned values by the
grossing factors. Adding all these grossed returns together gives the national total.
The grossing procedure relies on finding a relationship between the returned employee jobs
figures and some auxiliary information which, in this case, is the employment value for that
business held on the IDBR
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The estimation system includes a special process to identify outliers (unusual results) and
treat them separately. It also employs a technique for dealing with businesses that ceased
trading between the time the sample was drawn and the survey date. Furthermore, the
estimation process gives special treatment to businesses that have undergone a merger or
take-over.
Sub-National estimation
To compile estimates for employee jobs at sub-national levels first requires a process of local
unit apportionment. This involves cascading the reporting unit data (collected on the survey
questionnaires) across the local units which are linked to the reporting unit. The IDBR is the
source of information for the links between the reporting and local units.
A value is apportioned to each variable in a local unit and the data are grouped into estimation
cells defined by employment size bands, industry and region. Ratio estimation is applied to
the cells. As part of this process, reporting units that were marked in the national datasets as
outliers are also regarded as outliers in the sub-national estimation system.
The national and sub-national estimates are obtained using different stratification schemes,
and so are likely to differ at the UK level. To overcome this, the local unit dataset is scaled to
match the aggregate employee jobs total from the reporting unit dataset.
In theory, the estimation mechanisms described above could be used to generate estimates for
any domain of interest, even those at very fine levels of industrial or geographical detail. In
practice, however, the sample size may be stretched too thinly for these very fine
disaggregations, and there is a risk that some cells may not be of publishable quality. To
overcome this problem, a set of 'minimum domains' have been identified. Minimum domains
are cells (combinations of industry and geography) for which the estimation process described
above has been shown to give robust results. Typically, minimum domains are two-digit
industry by local authority district or county. Below these 'minimum domains', a process
known as synthetic estimation is used. This takes the minimum domain estimates and breaks
them down according to ratios from the IDBR. This way, the ABI can be used to generate
data at very fine levels of industry and geography.
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Annex C
The Census of Population
The Census of Population is carried out once every ten years. The most recent Census was
held on 29 April 2001. Every household and every communal establishment in the United
Kingdom was given a questionnaire to complete and the Census results cover all usual
residents of the UK (statistical adjustments are made to correct for people who are not
included on a Census form).
The 2001 Census included a series of questions to facilitate the derivation of statistics on
economic activity. These are compatible with the ILO definition, although these questions are
only asked of people aged 16 to 74. Other labour market related information available from
the 2001 Census includes occupation, industry, hours worked and method and distance of
travel to work.
The 1991 Census also asked similar labour market related questions, but these did not fully
conform to the ILO definition.
Statistics from the 1991 and 2001 Censuses of Population are available from:
Census Customer Services
Office for National Statistics
Segensworth Road
Titchfield
Fareham
Hampshire
PO15 5RR
Phone: 01329 813800
Fax: 01329 813587
Minim: 01329 813669
E-mail: census.customerservices@ons.gov.uk
Web: http://www.statistics.gov.uk/census2001/default.asp
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Annex D
Concepts and Definitions
Civilian Workforce Jobs: Workforce jobs excluding those in HM Forces.
Discouraged Workers: A subgroup of the economically inactive population who said that
they would like a job and whose main reason for not seeking work was because they believed
there were no jobs available.
Economically Active: The economically active population are those who are either in
employment or unemployed.
Economic Activity Rate: The number of people who are in employment or unemployed
expressed as a percentage of the relevant population.
Economically Inactive: People who are neither in employment nor unemployed. This
includes those who want a job but have not been seeking work in the last four weeks, those
who want a job and are seeking work but not available to start work, and those who do not
want a job.
Economic Inactivity Rate: The number of economically inactive people expressed as a
percentage of the relevant population.
Employment and jobs: There are two ways of looking at employment: the number of people
with jobs, or the number of jobs. The two concepts are different as a person can have more
than one job.
The number of people with jobs is measured by the Labour Force Survey (LFS) and includes
people aged 16 or over who did paid work (as an employee or self-employed), those who had
a job that they were temporarily away from, those on government-supported training and
employment programmes, and those doing unpaid family work.
The number of jobs is measured by workforce jobs and is the sum of employee jobs (as
measured by surveys of employers); self-employment jobs from the LFS, those in HM Forces,
and government-supported trainees. Vacant jobs are not included.
Employment Rate: The number of people in employment expressed as a percentage of the
relevant population (e.g. working age employment rate is the number of people in
employment aged 16-59/64 as a percentage of the population aged 16-59/64).
Full-time: In the Labour Force Survey, the respondents classify themselves as either full-time
or part-time. However, people on government supported training and employment
programmes who are at college in the reference survey week are classified, by convention, as
part-time. In employer surveys, people are generally classed as part-time if they work for less
than 30 hours per week.
Government-supported trainees: Those on government-supported training programmes are
included in the employee jobs estimate, within Workforce Jobs, if they have a contract of
employment - otherwise they are included in the Workforce Jobs estimate as Government-
Supported Trainees.
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Hours worked (actual and usual): Respondents to the Labour Force Survey are asked a
series of questions enabling the identification of both their usual hours and the hours they
actually worked in the reference week. The calculation of hourly earnings in the Labour
Force Survey is on the basis of usual hours.
Jobs density: The total number of filled jobs in an area divided by the resident working-age
population of that area.
Labour Force Survey: The main source for information on the labour market in the UK. It is
a random household survey of approximately 53,000 households every three months
conducted by the Office for National Statistics. As well as private households, the survey
includes people living in communal establishments (student residence halls, National Health
Service accommodation, etc).
Labour Supply: People employed or unemployed form the actual labour supply.
Economically inactive people are considered a potential source of labour supply.
Part-time: See Full-time.
Rates: Generally the preferred measure of labour market statistics as they allow changes in
the labour market to be interpreted in a wider context by allowing for changes in the overall
population, or the number of people who are economically active.
Seasonal adjustment: A process of estimating regularly occurring seasonal effects and
removing them from the raw data.
Second jobs: Jobs which Labour Force Survey respondents hold in addition to a main full-
time or part-time job.
Self-employment jobs: Part of Workforce Jobs. Estimates are based on the results of the
Labour Force Survey.
Temporary employees: In the Labour Force Survey these are defined as those employees
who say that their main job is non-permanent in one of the following ways: fixed period
contract, agency temping, casual work, seasonal work, other temporary work.
Unemployment: The number of unemployed people in the UK is measured through the
Labour Force Survey following the internationally agreed definition recommended by the
International Labour Organisation (ILO) an agency of the United Nations. Unemployed
people are:
· without a job, want a job, have actively sought work in the last four weeks and are
available to start work in the next two weeks or;
· out of work, have found a job and are waiting to start it in the next two weeks.
Unemployment Rate: The number of unemployed people expressed as a percentage of the
relevant economically active population.
Unpaid family workers: Persons doing unpaid work for a business they own or for a
business that a relative owns.
Workforce Jobs: See Employment and Jobs.
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