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Small area labour market data.



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2002-03

No. 3, 20 August 2002

Small Area Labour Market Data

Introduction

There is widespread interest in small area labour market data.

Unemployment rates vary widely between states and within states and small area data is therefore needed so governments can develop programs that target more effectively the areas of greatest need.

While the national rate of unemployment is currently around 7 per cent, the rate ranges from below 5 per cent in the ACT to more than 8 per cent in Tasmania. At a regional level the rate climbs to over 12 per cent in areas such as the Richmond-Tweed / Mid-North Coast and the Wide Bay-Burnett Statistical Regions. At a local area level, the rate climbs higher again to over 20 per cent in areas such as Kingston (Qld) and Elizabeth (SA).

Therefore, while the national unemployment rate is at its lowest level in over a decade, serious unemployment problems still exist at the small area level.

There is obviously a great need to focus on small area labour market data but this can often be confusing because of the wide variety of data sources that exist. The purpose of this Note is to provide a ready reference to all sources of small area data and to explain how these data sources relate to one another. In addition, the Note draws attention to an historical small area data series now available on the Parliamentary Library's intraNet site.

Regional Labour Market Data—Australian Bureau of Statistics (ABS)

The official source of statistics on the Australian labour market is the ABS. Each month the ABS conducts a survey (known as the Labour Force Survey) based on a sample that covers about 0.5 per cent of the population of Australia. This survey produces a wide variety of statistics, most notably the official unemployment rate.

Although the Labour Force Survey is designed primarily to produce estimates at the national and State/Territory levels, it also delivers estimates for a number of Statistical Regions within states. There are over 70 Statistical Regions across Australia. Regional estimates are published monthly by the ABS in Labour Force Selected Summary Tables Australia (Product No. 6291.0.40.001).

ABS regional estimates reveal much that is concealed in state-wide figures. For example, the three largest states have rates that are higher in the country than in the city while in South Australia and Western Australia the reverse is true. Within cities, rates are very much higher in outer metropolitan than inner metropolitan areas. Rates in the three largest states vary from below 4 per cent in some regions to over 10 per cent in others, while there is much less variability in the other states.

ABS regional estimates of unemployment form the basis for

estimates of unemployment at the Statistical Local Area (SLA) level that are published by the Department of Employment and Workplace Relations. These statistics in turn form the basis for unemployment estimates by electorate published by the Parliamentary Library.

Small Area Labour Market Data—Department of Employment and Workplace Relations (DEWR)

Every quarter DEWR publishes estimates of unemployment and the labour force for each of approximately 1 300 SLAs. An SLA essentially consists of a Local Government Area or part(s) thereof. The estimates are smoothed using a four quarter average to minimise the variability that is inherent in small area data. Estimates appear in the publication Small Area Labour Markets which is available in hardcopy as well as on the Internet at:

http://www.workplace.gov.au/

DEWR unemployment estimates by SLA are produced by apportioning the level of unemployment for a Statistical Region, as published by the ABS, across each of the SLAs within that region in accordance with the distribution of Centrelink Newstart and Youth Allowance (Other) beneficiaries. The small area unemployment estimates produced by DEWR therefore reflect the regional disparities of the Centrelink data while still being consistent with the ABS Labour

Force Survey estimates. DEWR labour force estimates are produced by allocating the total labour force for each ABS Statistical Region to the SLAs in that region according to weights derived from the 1996 Census.

It is interesting to note that in the March Quarter 2002 there were 13 SLAs with an unemployment rate greater than 20 per cent. There were a further 42 SLAs with an unemployment rate of between 15 and 20 per cent while over 100 SLAs had virtual full employment with unemployment rates of less than 3 per cent. Statistics at the SLA level should be treated with caution, however, as often they are based on small numbers that can easily magnify into large percentage amounts. Table 1 lists those SLAs with a minimum of 500 unemployed persons which had the highest unemployment rates in Australia as at March 2002.

Labour Market Data By Electorate—Department of the Parliamentary Library (DPL)

DEWR unemployment and labour force estimates are able to be aggregated into Electoral Divisions using a concordance of SLAs to Electoral Divisions. With an estimate of both the number of unemployed and the labour force it is then an easy matter to calculate an unemployment rate estimate for each electorate. These estimates are available on the DPL's intraNet site at: http://libiis1/services/statistics/ SmallArea.htm#division

Unemployment rate estimates by electorate show a very definite skewing of Liberal and National Party seats toward the lower end of the unemployment rate spectrum. Ranking electorates from lowest to highest in terms of their unemployment rates reveals that in March 2002 the Coalition parties

had 51 of the 75 seats in the lower half compared with 22 for the ALP. In the top half of electorates the Coalition parties had 31 seats compared with 43 for the ALP.

Historical Labour Market Data by Statistical Region and SLA—Department of the Parliamentary Library

The DPL has compiled a series that gives DEWR unemployment and labour force estimates by SLA back to September 1998. The DPL has also compiled a series that gives ABS unemployment rate data by Statistical Region back to September 1987 (except for some Regions that have experienced boundary changes in which case data is available only back to September 1997).

Teenage unemployment rate estimates by Statistical Region are compiled by DEWR based on data supplied by the ABS. The DPL has compiled these as a series back to May 1995. Because the rates are based on relatively small numbers, the rates have been calculated as 12

monthly averages to remove some of the variability that is present in the data.

Historical labour market data by Statistical Region and SLA is available at the DPL's intraNet site at:

\\Libiis1\inetpub\wwwroot\Services\ Statistics\SmallArea.htm

Tony Kryger Statistics Group Information and Research Services

Views expressed in this Research Note are those of the author and do not necessarily reflect those of the Information and Research Services 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. Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion.

 Commonwealth of Australia ISSN 1328-8016

March Quarter, 2002

SLA Name State

Number unemployed

Unemployment Rate (%)

Melton - East Vic 923 33.0

Tanami NT 509 24.7

Kingston Qld 1 495 23.6

Woodridge Qld 2 047 23.4

Elizabeth SA 2 084 20.7

Eagleby Qld 682 19.1

Derby-West Kimberley WA 629 18.3

Loganlea Qld 564 17.3

West End Qld 524 17.0

Inala Qld 881 16.6

Enfield - Pt B SA 1 022 16.4

Beenleigh Qld 599 16.0

Acacia Ridge Qld 520 15.8

Eurobodalla NSW 1 645 15.5

Hervey Bay Qld 2 445 15.4

Marsden Qld 1 291 15.3

Byron NSW 1 880 15.1

Brighton Tas 756 15.1

Noosa - Tewantin Qld 694 15.1

Great Lakes NSW 1 491 14.9

Source: DEWR, Small Area Labour Markets

Table 1. SLAs with the highest unemployment rates in Australia,