Editorial: Labour Market StatisticsAuthor(s): Paul AllinSource: Journal of the Royal Statistical Society. Series A (Statistics in Society), Vol. 161, No. 3(1998), pp. 277-280Published by: Wiley for the Royal Statistical SocietyStable URL: http://www.jstor.org/stable/2983201 .

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Editorials 277

There is a great need to maintain the independence of the Society. We have welcomed the discussions with the ONS. We look forward to playing our part, as individuals, in the National Statistical Commission as well as to continue to do so on the Statistics Advisory Committee for the ONS and on the recently proposed joint committee on methodology between ourselves and the ONS. At the same time the advantages to all parties of the Society and Fellows of the Society retaining their rights to criticize procedures and methods is clear and must be preserved.

Finally I do thank the members of the working party and those organizing and taking part in the meetings held to discuss the Society's response for their considerable and valuable contributions.

References Bartholomew, D. (Chairman) (1995) The measurement of unemployment in the UK (with discussion). J. R. Statist.

Soc. A, 158, 363-417. Her Majesty's Government (1998) Statistics: a matter of trust. Command 3882. London: Stationery Office. Moore, P. G. (Chairman) (1991) Official statistics: counting with confidence. J. R. Statist. Soc. A, 154, 23-44.

Robert Curnow President

Royal Statistical Society

Editorial: Labour market statistics

The Royal Statistical Society (RSS) has maintained a close interest in labour market statistics since its working party on measuring unemployment in the UK reported in April 1995 (Bartholomew, 1995). The position 2 years on (Bartholomew, 1997) was that 'much remains to be done but the signs are hopeful'.

With the passing of another year, we can now see some real improvements to the presentation of labour market statistics by the Office for National Statistics (ONS) (Labour Market Division of the Office for National Statistics, 1998). However, these improvements should be seen as an interim measure. At the time of writing (August 1998) a decision on whether or not to hold a monthly Labour Force Survey (LFS) had still to be revealed, as part of the Government's comprehensive spending review. Only when such a decision has been made public will we be able to say whether the RSS's recommendations have been fully addressed. The RSS's strong preference is for the LFS to be redesigned at least to generate headline labour market series from monthly samples.

The new approach From April 1998, the ONS have been publishing one First Release each month with the aim of presenting a coherent picture of the labour market. It seeks to use all available official statistics and focuses on people in employment, on unemployed people who are seeking work and on people who are economically inactive. This is in line with the view of labour market statistics recommended by the RSS, in which all three states (represented as E, U and N in Bartholomew (1995)) are equally important in understanding the labour market.

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278 Editorials

The main improvements to the presentation of labour market statistics were summarized as follows in an ONS news release (Office for National Statistics, 1998a):

(a) an extension of the range of indicators that are available monthly; LFS information released every month as an average of the latest 3 months' data;

(b) a strengthening of the measures of those who are out of work and who want a job but who are not unemployed according to the internationally agreed definition of unemployment maintained by the International Labour Organisation (ILO);

(c) whole economy employment and ILO unemployment statistics published monthly (rather than quarterly) consistently;

(d) publication of the LFS data on a UK basis; (e) incorporation of LFS data in the regional labour market First Releases; (f) publication of new indicators relating to jobs and businesses derived from employer

surveys; (g) improved earnings data to reduce the number of revisions.

The ONS have published several guides to labour market statistics (Office for National Statistics, 1998b, c, d) and organized a series of workshops and seminars to help users to understand the changes. This included a presentation and discussion at a meeting of the RSS Official Statistics Section on March 25th, 1998.

Commentary The RSS Executive Committee, at its May 1998 meeting, warmly welcomed the ONS developments. These developments take up many of the RSS's key recommendations. The Executive Committee welcomed in particular the change in emphasis from unemployment to a coherent picture of the labour market. An assessment of the extent to which the RSS recommendations of 1995 have been accepted is given in Table 1.

While acknowledging all that has happened, we have not reached the end of the story. It is perhaps the beginning of a new chapter in official labour market statistics, in which the richness of the LFS data will provide a greater understanding of the way in which the labour market is operating. And there is still the unresolved issue about whether we will have a monthly LFS to help with this analysis and policy and decision-making.

We understand that it is the ONS's intention that the claimant count will cease to be the monthly headline figure, at least in the way in which they present the monthly release. However, the ONS will need to continue with their efforts to help customers to understand this and the other changes. The media play a crucial role. Initial reporting of the ONS plans was not good, with headlines such as 'Labour hoists jobless totals', 'Unemployment will rise sharply in April' etc. wrongly giving the impression that there is only ever a single measure of unemployment. Also, the reporting at least of the first 2 months on the new basis has concentrated on the claimant count rather than the LFS measure of unemployment or on employment rates and participation rates. The first real test of the new approach will be as the economy approaches and passes through the next turning-point. How well will the new measures perform and will they provide sufficiently clear signals for those who need to track the economy and the labour market at that time?

Finally, can we learn more from other countries? During the meeting of the Official Statistics Section on the new presentations the ONS commented that UK statisticians play a leading role in international forums concerned with definitions and methodology of labour market statistics. We welcome this and encourage the continued exchange of good practice

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Editorials 279

Table 1. RSS recommendations on measuring unemployment in the UK

RSS recommendation (April 1995) Position at May 1998

(i) Monthl.y headline count of unemployment Greater weight is now given to the LFS, including the should be based on the LFS using the ILO ILO definition, in the ONS First Release; however, definition of the unemployed media reports of the figures presented in the new way

still tend to concentrate on the claimant count

(ii) Government Statistical Service should ONS estimate that it would cost ?10 million per annum investigate the costs and benefits of various (from January 2000) to supplement the current continuous options for improving the quality of a monthly LFS, with its monthly sample of 20000 households, with headline series for ILO unemployment from the an additional 40000 households per month who would be LFS; on statistical grounds, the RSS's strong asked a shortened version of the LFS questionnaire; this preference is for a redesigned mionthly LFS would give monthly estimates for all the information

currently published in the ONS First Release, including the detailed information on inactivity; this is being considered with wider decisions on public spending

(iii) Claimant count should cease to be the See (i) above monthly headline figure and in future be designated the unemployment benefit count

(iv) Information contained in the claimant Accepted: the claimant count statistics continue to be count should continue to be published for published and used in the way suggested special purposes such as indicators of short- term changes nationally and locally

(v) Separate figures should be made available Accepted: the ONS have for some time now made quarterly from the LFS on the numbers of additional information available each quarter on the young people unemployed, the long-term particular groups to which the RSS drew attention unemployed, the number wishing to work and the strength of attachment to the labour force

(vi) Government should take a lead with the We understand that the ONS is doing this, as well as ILO in reassessing the ILO definitions of playing a major role in related discussions in the European unemployment and employment used in the Union and with North American statisticians and those in LFS other countries in the Organisation for Economic

Co-operation and Development

(vii) Published changes in rates should always be This appears to be the convention in the ONS First expressed in terms of change in percentage points Releases on labour market statistics

(viii) System of national manpoit'er accounts We accept that this is not a simple matter from the LFS should be developed which would enable but are reassured that the ONS is investigating some researchers to extract, in aggregated form, significant methodological issues, including how to all changes in employment status cope with attrition in the sample of respondents and

the possible introduction of respondent bias; the ONS has a programme of methodological work, some of which involves external researchers, which will be reported in due course

(ix) Recommendations of the RSS report of Government has issued a Green Paper consultation 1990 (on official statistics in the UK) should document (Her Majesty's Government, 1998); the be enacted consultation period closed at the end of May 1998;

the Green Paper says that 'the Government believes that much progress can be made without legislation to enshrine a new framework for statistical work in government. But it will consider the case for legislation if appropriate and necessary. However, Parliamentary time is limited and the time available for this legislation would need to be assessed against other priorities'

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between countries. For example, Djerf (1997) has investigated the possibility of obtaining more precise LFS estimates for Finland by using auxiliary information derived from administrative sources, although the administrative and LFS sources are still presented as 'competing' measures.

References Bartholomew, D. (Chairman) (1995) The measurement of unemployment in the UK (with discussion). J. R. Statist.

Soc. A, 158, 363-417. (1997) The measurement of unemployment in the UK: the position at June 1997. J. R. Statist. Soc. A, 160,

385-388. Djerf, K. (1997) Effects of post-stratification on the estimates of the Finnish Labour Force Survey. J. Off. Statist., 13,

29-39. Her Majesty's Government (1998) Statistics: a matter of trust. Command 3882. London: Stationery Office. Labour Market Division of the Office for National Statistics (1998) Improved ONS labour market statistics. Lab.

Markt Trends, 106, Feb., pp. 55-58. Office for National Statistics (1998a) A coherent monthly picture of the labour market. News Release ONS(98)27,

Feb. 3rd, 1998. London: Office for National Statistics. (1998b) Guide to Labour Market Statistics Releases, 1st edn. London: Office for National Statistics. (1998c) How exactly is employment measured?, 1st edn. London: Office for National Statistics. (1998d) Howi, exactly is unemployment measured?, 3rd edn. London: Office for National Statistics.

Paul Allin Department for Culture,

Media and Sport London

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