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Why are ABS and DSS unemployment figures different?



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Department of the Parliamentary Library

Parliamentary

Research

Service

RESEARCH NOTE Number 52, 25 June 1996 ISSN 1323-5664 Why are ABS and DSS unemployment figures different? The Australian Bureau of Statistics (ABS) releases monthly figures on the number of unemployed people in Australia, which are derived from their Labour Force Survey. The Department of Social Security (DSS) releases monthly figures for the number of people receiving unemployment payments. Usually these figures are somewhat different. This may at first glance seem strange, because both sets of numbers appear to be counting unemployed people. Closer examination reveals good reasons why these numbers do not coincide.

Measuring different things

The ABS figures come from a sample interview survey of 0.5% of the total Australian population, conducted during the middle two weeks of each month. The

questions asked relate to the week before the interview. From these figures national estimates of the number of unemployed are

calculated. The DSS figures on the

other hand are derived monthly from administrative data on the actual numbers of people signed up to receive payments for the unemployed (Job Search

Allowance, Newstart Allowance or Youth Training Allowance). The figures derived from these

differing sources are clearly

measuring different things.

The main reasons why this is so are these:

• The ABS, following

international standards and conventions for measuring unemployment, classifies a person as unemployed if they were aged 15 years and over, were not employed for at least one hour during the week

before the interview, had

actively looked for either full or part time work and were available for work. People with very short periods of

employment are excluded but those with working spouses or investment incomes but who

did not actually work

themselves are not excluded, if they fulfilled these conditions.

• The DSS count people who satisfy an activity test (by, among other things, actively seeking paid work and being willing to undertake paid work) and pass income and asset tests. The DSS figures

therefore include many people who are working part-time or doing casual work, even if this excludes them from payment temporarily. They also exclude people whose family incomes are above the income test

thresholds, but who may be unemployed.

• The DSS also pay people who are temporarily ill for up to 13 weeks or undergoing training courses, but may not be

counted by the ABS because they were unable to look for work, or were unavailable for work.

A d j u s t e d(a) Numbers of Unemployed Persons: DSS and ABS

0

100

200

300

400

500

600

700

800

900

May-90 Nov-90 May-91 Nov-91 May-92 Nov-92 May-93 Nov-93 May-94 Nov-94 May-95 Nov-95 Feb-96

( ' 000)

DSS adjusted

ABS adjusted

(a) See text for explanation.

• The ABS includes people

seeking work who are serving waiting periods before being granted DSS payments, serving deferment periods for breaches of the activity test or receiving pensions such as Sole Parent Pension.

Reconciling the figures

From time to time claims are made in the media that there are more people receiving unemployment payments than are classed as

unemployed by the ABS. Fraud or poor administration of the

payments system is often cited as the reason (see, for example,

'Cheats blamed as more get dole than are jobless', Sydney Morning Herald, 12 April 1996).

However, the DSS and ABS

figures for the last six years lend little support to these claims. The 'All clients' DSS figures and the

'Total' ABS figures in the table below show the apparently

conflicting DSS and ABS figures over this period. When these

figures are adjusted to remove the effect of the differing definitions of unemployment and the DSS income test, that conflict

disappears. This is done by

excluding those not receiving a payment and those with earned income from the DSS figures, and those with husbands working (as men predominantly work full-time, those who do not would be very closely compensated for by the far fewer full-time working wives of unemployed men) from the ABS figures.

Comparing the resulting figures, i.e. 'Without earned income' DSS figures and 'Other than husband working' ABS figures, suggests that the DSS figures are in fact generally lower than the ABS figures. This removes the basis for any claims that too many people

are receiving unemployment

payments, as the diagram on the previous page shows.

Dale Daniels and Geoff Winter Social Policy Group Parliamentary Research Service

Phone: 06 277 2413 or 2437 Fax: 06 277 2407

Views expressed in this Research Note are those of the author and do not necessarily reflect those of the Parliamentary Research Service and are not to be

attributed to the Department of the Parliamentary Library.

Research Notes provide concise analytical briefings on issues of interest to Senators and

Members. As such they may not canvass all of the key issues.

© Commonwealth of Australia

Unemployment Estimates Using DSS and ABS Data: 1990 to 1996 ('000)

DSS unemployment payment(a) clients ABS unemployed d

Received payment Other

All

With

earned

Without earned

Husband

than

husband

Period clients Total income income Total employed employed

May 1990 n.a. 406.1 43.9 362.2 548.6 75.1 473.5

Nov. 1990 n.a. 468.0 54.8 413.2 625.8 65.6 560.2

May 1991 n.a. 650.9 73.5 577.4 805.4 90.2 715.2

Nov. 1991 730.1 722.3 88.9 633.4 810.9 78.9 732.0

May 1992 838.4 831.0 104.0 727.0 912.5 89.4 823.1

Nov. 1992 849.8 828.9 109.7 719.2 886.1 77.1 809.0

May 1993 913.1 889.6 119.2 770.4 923.5 77.6 845.9

Nov. 1993 900.5 874.6 131.7 742.9 893.7 91.6 802.1

May 1994 892.7 848.6 139.2 709.4 849.9 84.5 765.4

Nov. 1994 810.0 774.1 137.9 636.2 764.1 74.7 689.4

May 1995 824.5 794.8 146.9 647.9 753.6 67.4 686.2

Nov. 1995 805.0 778.3 124.3 654.0 736.8 73.7 663.1

Feb. 1996 879.4 858.5 121.1 737.4 856.6 86.1 770.5

May 1996 838.2 n.y.a. n.y.a. n.y.a. 758.2 79.5 678.7

(a) Includes unemployment benefit and job search allowance up to June 1991; Job Search Allowance and Newstart Allowance up to December 1994; and Job Search Allowance, Newstart Allowance and Youth Training Allowance from January 1995. n.a. - not available. n.y.a. - not yet available.

Source: Department of Social Security, The Labour Force, Australia, various, ABS (Catalogue No. 6203.0).