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Unemployment statistics: a quick guide



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ISSN 2203-5249

RESEARCH PAPER SERIES, 2015-16 UPDATED 9 DECEMBER 2015

Unemployment statistics: a quick guide Penny Vandenbroek Statistics and Mapping Section

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 statistical quick guides, 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

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; currently available for work; and deliberately seeking 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.

Unemployment statistics: a quick guide 2

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. Active steps are considered those which put a person in contact with a prospective employer, either directly or through an intermediary. The types of steps include:

• registering with an employment agency

• applying for jobs with employers

• undertaking an interview with an employer

• placing or answering job 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. From July 2014 the types of activities that the ABS considers to be ‘active’ vary slightly from earlier periods.

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 trend, seasonally adjusted and original data. Data is available on unemployed people by age, sex, social marital status, country of birth (limited), state or territory of residence, labour market region, full-time educational attendance (youth only), and duration of job search.

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.

Unemployment statistics: a quick guide 3

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

1. Unemployed persons - trend

Source: ABS, Labour force, September 2015, cat. no. 6202.0

Graph 2 provides the number of unemployed people looking for full-time work. The ABS also measures the number of people seeking part-time work. The type of work sought is based on the responder’s perception.

2. Unemployed persons looking for full-time work - trend

Source: ABS, Labour force, September 2015, 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 reflects that there are more people actively looking for work than there are jobs available. Graph 3 (on the next page) provides the unemployment rate by sex from the start of the data series until the most recent period.

Unemployment statistics: a quick guide 4

3. Unemployment rate - trend

Source: ABS, Labour force, September 2015, 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. This section provides a brief overview of long-term unemployment, with more detailed information available in a separate quick guide.

Duration of job search The ABS measures the duration of job search as the period of time that has elapsed since an unemployed person began looking for work (and was available to work). The period is measured up to the end of the reference week. Any brief period of work (greater than one hour) during the job seeking period will result in a break in the period looking. Prior to July 2014, the ABS measured the duration of unemployment based on different parameters for both looking for work and breaks in the period of looking. More information is available from the ABS, see Information paper: Forthcoming changes to labour force statistics, Jun 2014, cat. no. 6292.0.

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.

4. Long-term unemployed people - trend

Source: ABS, Labour force, detailed - electronic delivery, September 2015, 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’.

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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, such as the youth unemployment rate and ratio. Other publications on regional statistics include: Youth unemployment statistics for small geographic areas: a quick guide and Youth unemployment rates in small geographic areas - 2013.

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 labour 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 and RM3. This release 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 Area Level 4 (SA4)

Statistical Area Level 4 regions are designed for the dissemination of labour force estimates and to reflect labour markets within each state and territory. They cover 87 spatial areas across Australia. For more information see Australian Statistical Geography Standard (ASGS): Volume 1 - Main structure and Greater capital city statistical

areas, July 2011, cat. no. 1270.0.55.001 (Main Structure > Statistical Area Level 4 (SA4)).

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 unemployment rates. Note: data relating to Commonwealth Electoral Divisions in Victoria and South Australia reflect the boundaries at the time of the 2010 Federal Election. For more information see ABS, Statistical Geography Fact Sheet, Commonwealth and State Electoral Divisions.

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 publishes relevant ABS regional labour force data (SA4) through their Labour Market Information Portal. They also provide information on Newstart (and some other) benefit recipients by Employment Service Area based on Department of Social Services administrative data. Additionally, they produce a quarterly Small Area Labour Markets publication based on ABS SA2s (smaller geographic regions than SA4s) and Local Government Areas (LGAs).

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