Labour Stats 101 unemployment: a quick guide

Updated 7 May 2014

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Penny Vandenbroek
Statistics and Mapping

 

Introduction

This guide provides a brief overview of unemployment, an introduction to the key concepts and terminology, and lists relevant data sources. This is one in a series of Quick Guides related to labour statistics, designed to provide a basic understanding of Australian labour market data. Other guides include labour force, employment and youth unemployment, which are available from the Parliamentary Library website.

In the labour force framework, unemployed people form part of the currently active population, who along with the employed constitute the labour force (see diagram below).

Labour force framework

 

Labour force framework

Source: ABS, Labour Statistics: Concepts, sources and methods, 2013, Cat. no. 6102.0.55.001

Who are unemployed people?

The International Labour Organization (ILO) describes unemployed people as those who are: without work; seeking work (in a recent past period); and currently available for work. The concept of ‘without work’ is used to distinguish unemployed people from the employed. A person must not have undertaken any work at all (not even for one hour) during the reference period, nor can they have been temporarily absent from a job or enterprise.

How is unemployment measured?

The Australian Bureau of Statistics (ABS) conducts a monthly Labour Force Survey. This household survey is designed to produce key estimates of unemployment (and employment) from a sample of approximately 56,000 people. The survey’s definition of unemployment closely aligns with international standards and guidelines.

Unemployed persons are defined as all persons aged 15 years and over who were not employed during the reference week and:
  • had actively looked for work and were available to work (in the reference week), or
  • were waiting to start a new job.

Note that the Labour Force Survey excludes some groups of people, including those living in institutions, members of permanent defence forces, certain diplomatic personnel, and overseas residents. More information is available from the ABS.

Active steps to find work

The concept of ‘actively looking for work’ requires a person to have undertaken at least one active step in the search for work at any time in the four weeks up to the end of the reference week. Steps include:

  • registering with an employment agency
  • applying for jobs with employers
  • checking workplaces to see if there are any jobs available
  • placing or answering newspaper advertisements, and
  • seeking assistance from friends or relatives to find a job.

Steps taken towards the establishment of an enterprise for self-employment are also considered to be active.
A general declaration of being ‘in search of work’ is not sufficient for someone to be classified as unemployed.

Waiting to start a new job

In recognition that not all job seekers are able to immediately start their new job once offered, anyone expecting to start a new job within four weeks from the end of the reference week is classified as unemployed if they were available to start work during the reference week.

What are the key measures?

The number of unemployed people (head count)

Each month the ABS estimates the number of unemployed people, releasing original, seasonally adjusted and trend data. Data is available on unemployed people by age, sex, social marital status, state or territory of residence, educational attendance, and duration of unemployment.

Changes in the number of unemployed people (increases or decreases in the number of ‘jobseekers’) are sometimes mistakenly referred to as gains or losses of jobs. While the loss of a job certainly may lead to a person being classified as unemployed, it is whether or not they are employed that is being measured.

Graph 1 provides changes in the number of unemployed people by sex from the start of the data series the most recent period (seasonally adjusted).

1. Unemployed persons by sex - seasonally adjusted

1. Unemployed persons by sex - seasonally adjusted

Source: ABS, Labour force, March 2014, Cat. no. 6202.0

Graph 2 provides the numbers of unemployed people by the type of work they were seeking, either full-time or part-time. The type of work sought (in the four weeks prior to the survey) is based on the responder’s perception of full-time or part-time work.

2. Unemployed persons by type of work sought - seasonally adjusted

2. Unemployed persons by type of work sought - seasonally adjusted

Source: ABS, Labour force, March 2014, Cat. no. 6202.0

Unemployment rate

The rate is unemployed people expressed as a proportion of the labour force (in the same age group). This key measure is used to assess the availability of jobs in the labour market. A high rate therefore reflects that there are more people actively looking for work than there are jobs available. Graph 3 provides the unemployment rate by sex from the start of the data series until the most recent period (seasonally adjusted).

3. Unemployment rate by sex - seasonally adjusted

3. Unemployment rate by sex - seasonally adjusted

Source: ABS, Labour force, March 2014, Cat. no. 6202.0

Long-term unemployed

Unemployed people who have not worked for 52 weeks or longer are classified as long-term unemployed.

The longer people are unemployed, the harder it may be to return to, or gain, employment. In a 2011 article, the ABS suggest that long-term unemployment may lead to an erosion of social or workplace networks, skills, confidence or motivation.

Duration of unemployment

To measure the duration of unemployment, the ABS focuses on the period of time that has elapsed since an unemployed person:

  • began looking for work (and was available to work), or
  • last worked for two weeks or more.

The period is measured up to the end of the reference week and, where both situations apply, the shorter of the two periods is used as the duration. Brief periods of work (less than two weeks) during the job seeking period are disregarded. Graph 4 provides changes in the number of long-term unemployed people by sex from the start of the data series until the most recent period (seasonally adjusted).

4. Long-term unemployed people by sex – seasonally adjusted

4. Long-term unemployed people by sex – seasonally adjusted

Source: ABS, Labour force, detailed – electronic delivery, March 2014, Cat. no. 6291.0.55.001

Long-term unemployment ratio

The long-term unemployment ratio expresses the number of people unemployed for 52 weeks or more as a proportion of all unemployed people. Time series data is available from the Parliamentary Library’s Monthly Statistical Bulletin, see ‘1.4 Long-term unemployment’.

Young unemployed

A separate Quick Guide on youth unemployment is available from the Parliamentary Library website. The guide contains information on various measures that may be used to assess youth unemployment, including: the youth unemployment rate; youth unemployment ratio; full-time youth unemployment rate; youth unemployment/fully active ratio; ratio of youth-to-adult unemployment rates; and share of unemployed youth in total unemployment. It also contains a list of ABS sources for youth labour force data. A separate release covering regional statistics is also available from the Parliamentary Library, see Youth unemployment statistics for small geographic areas: a quick guide.

Sources of ABS labour force data

The ABS produces labour force estimates, including unemployment, through the monthly Labour Force Survey. Labour data is also available from a range of supplementary and multi-purpose household surveys, social surveys and some business surveys. Key indicators are available from: Labour force, Cat. no. 6202.0; Labour force, detailed – electronic delivery, Cat. no. 6291.0.55.001; and Labour force, detailed, quarterly, Cat. no. 6291.0.55.003.

Regional data

Regional estimates of unemployment are released by the ABS in Labour force, detailed – electronic delivery, Cat. no. 6291.0.55.001, see Table 16 and Data Cubes RM1 (includes age groups), RM2 and RM3. This source provides data for the smallest geographic areas available (excluding the Census). Data is from the original (unadjusted) series and due to the small sample sizes the sampling errors with some estimates may be quite high.

Statistical Areas Level 4 (SA4)

The Statistical Areas Level 4 classification is used to produce labour force estimates for 87 spatial areas across Australia. These areas form part of the new geographic standard through which labour force estimates are now disseminated. These areas replace the formerly used labour force statistical regions.

SA4s are the largest sub-State regions in the new geographic structure. They are designed for the output of labour force data and to reflect labour markets within each State and Territory. More information is available from Australian Statistical Geography Standard (ASGS): Volume 1 – Main structure and Greater capital city statistical areas, July 2011, Cat. No. 1270.0.55.001 (see Main Structure > Statistical Area Level 4 (SA4)).

Unemployment estimates for other sub-State areas are available from Labour force, detailed – electronic delivery, Cat. no. 6291.0.55.001 – see Table 02 and Data Cubes LM1 and LM2.

Census data

The ABS is responsible for collecting and disseminating results from the five-yearly Census of Population and Housing. The Basic Community Profile series provides selected labour force data for small statistical areas (e.g. Commonwealth and State Electoral Divisions) including male and female unemployment rates, and whether a person was looking for full-time or part-time work. Note: data relating to Commonwealth Electoral Divisions in Victoria and South Australia reflect the boundaries at the time of the 2010 Federal Election. See ABS, Statistical Geography Fact Sheet, Commonwealth and State Electoral Divisions, for more information.

Other data sources

The Statistics and Mapping Section of the Parliamentary Library provide regular updates on unemployed persons based on ABS data in the Monthly Statistical Bulletin, see:

  • 1.2 Unemployment
  • 1.4 Long-term unemployment
  • 1.5 Youth unemployment, and
  • 8.3 International comparisons – unemployment rates.

The Department of Employment releases regional labour force data in the quarterly publication Australian regional labour markets. Estimates include unemployment, employment, the unemployment rate, employment rate and participation rate.

 

 

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