§ Mr. Foulkes
asked the Paymaster General if he will list all the changes which have occurred in the method of compiling employment, unemployment and vacancy statistics since 1979; and if he will estimate the quantitative change in those statistics which has occurred as a result.369W
§ Mr. Alan Clark
[pursuant to his reply, 2 December 1985, c. 77Employees in employment, the self-employed and Her Majesty's forces are estimated separately, and together comprise the employed labour force. Since 1979 there have been changes in the methodology for estimating the first two elements of the employed labour force. In 1979 the estimates for employees in employment were based on the census of employment, updated by applying proportionate changes in the numbers of employees as estimated from sample surveys of employers. Estimates for the self-employed were obtained from the census of population, updated to 1975 by applying proportionate changes in self-employment from counts of national insurance cards; self-employment was assumed unchanged since 1975.
The first change in methodology since 1979 was the use of labour force survey (LFS) results to produce new estimates of self-employment for 1975 to 1979. These were published in the Janurary 1982 Employment Gazette. The LFS data were used in place of the discontinued information from the national insurance card count.
When provisional results from the 1981 census of employment became available at the end of 1982, they showed that the application of changes estimated from sample survey data to the previous, 1978, census figure was producing substantial underestimates of the number of employees in employment. The methodology was reviewed and a supplementary set of estimates, which included an undercounting allownace based on the average rate of shortfall which had developed between 1978 and 1981, was introduced. At the same time the conventional assumption that the level of self-employment had remained constant since the date of the latest LFS data were reviewed. As there were reasons for expecting some continuation of the upward movement in self-employment, a supplementary series which assumed a continuation of the rate of growth observed between the
Employed labour force (at June) in Great Britain Seasonally adjusted Thousand Employment Gazette issue 1979 1980 1981 1982 1983 1984 December 1981 24,522 24,131 22,862 — — — January 1982 24,492 24,101 22,832 — — — May 1983 24,730 24,600 23,597 22,988 — — June 1983 24,730 24,600 23,597 23,208 — — (Supplementary series) June 1984 24,775 24,709 23,751 23,398 23,167 — July 1984 24,775 24,709 23,751 23,425 23,238 — January 1985 24,775 24,709 23,752 23,425 23,238 23,481 February 1985 24,775 24,709 23,752 23,333 23,040 23,429
Monthly unemployment count
The unemployment count is based on administrative records and is inevitably subject to occasional changes in coverage as a result of changes in the way benefits are paid or in "signing on" arrangements. The following five such changes since 1979 have had a discernible effect on the figures for adult unemployment and have been taken into account in a consistent series of seasonally adjusted estimates according to the coverage of the current count of benefit claimants. This series was introduced in the July 1985 Employment Gazette.
(1) In October 1979, fortnightly attendance at unemployment benefit offices was introduced and the 370W latest two surveys, was introduced. The reasons for, and full details of, these changes in methodology were set out in the June 1983 Employment Gazette.
Data from the 1983 labour force survey confirmed that the supplementary figures provided more accurate estimates than the basic series. The estimates for employees in employment were revised, using LFS data for 1981 and 1983 to assess the current extent of underestimation from the sample survey of employers. The self-employment series was updated at the same time. As the Department could now produce estimates in industrial and regional detail incorporating the adjustment for underestimation, estimates not incorporating the adjustment were no longer published and the term "supplementary" was no longer used. An article explaining the basis of the new estimates was published in the July 1984 Employment Gazette.
When the estimates of both employees in employment and the self-employed were updated to take account of results from the 1984 LFS and revised data from the 1983 LFS the figures for self-employment showed exceptional growth between 1983 and 1984 and the Department's statisticians considered it inappropriate to assume that this rate had continued. The estimates of self-employment for dates after June 1984, which will be reviewed when the 1985 LFS data become available next year. now incorporate the assumption that average rate of increase between 1981 and 1984 is continuing. An article describing these estimates was published in the March 1985 Employment Gazette.
The estimates of the numbers in the employed labour force following each of these changes in methodology are compared with those published immediately prior to the change in the following table. Some of the differences shown in that table result from the changes in the data available as well as methodological changes.
estimated effect was to add about 20,000, both to the unemployment count used at the time, based on registrations at jobcentres, and the claimant figures introduced later.
(2) In November 1981 the higher long-term rate of supplementary benefit was introduced for men over 60 who had been on supplementary benefit for over one year. Over the following 12-month period, this removed an estimated 37,000 men, again from both the registrant and claimant series.
(3) In October 1982 registration at jobcentres became voluntary, saving administrative costs and eliminating the need for unemployed people to attend both a jobcentre and 371W an unemployment benefit office in order to get their benefits. The previous count of registrants at jobcentres became incomplete and it was necessary to move to counting claimants at unemployment benefit offices. This reduced the count by 190,000 on average as a result of three factors: (i) computerisation of count and improved accuracy with more up-to-date record keeping of those becoming and ceasing to be unemployed (estimated effect 78,000); (ii) exclusion of registrants not claiming benefits (-135,000); (iii) inclusion of severely disabled (+23,000). Details of the change were published in the September and December 1982 issues of Employment Gazette and figures on the new claimant basis back to 1971 were then published.
(4) The 1983 Budget provisions enabled 162,000 men, mainly aged 60 and over, to receive national insurance credits or the higher long-term rate of supplementary benefit without attending an unemployment benefit office. The effect accumulated between April and August 1983.
(5) In July 1985, a reconciliation between the Department of Health and Social Security's records and the Department of Economic Development's computer records of claimants showed discrepancies in the figures for Northern Ireland. The corrective action resulted in the unadjusted figures for July and August 1985 being 5,700 and 5,150 lower respectively than would otherwise have been the case.
In addition, the change in school leaving regulations in November 1980 affected the total claimant series later introduced, but not the seasonally adjusted series of adult claimants nor the registrant series in use at the time.
Young people leaving school are now assumed to be in full-time education until the beginning of the following school term and not entitled to benefit. From 1982 a separate count of non-claimant school leavers registered at careers offices has been conducted in June, July and August when the numbers are significant.
There have also been a few other minor changes and some temporary distortions, for example as a result of industrial action in the local offices. It was also thought that the introduction of taxation of unemployment benefits in July 1982 may have had some effect on the unemployment figures but none was evident. Similarly, the introduction of payment of unemployment benefit wholly in arrears from July this year has so far had no discernible effect.
Vacancies at jobcentres
Since 1979 there has been one change in the way statistics of vacancies at jobcentres are compiled. From October 1985 the published vacancy series was brought into line with the data the Manpower Services Commission use for operational purposes. The main change in coverage was the inclusion of "self-employed" vacancies. These vacancies are not opportunities created by an individual for his or herself—they are open to the general public, and reflect the change towards contracting out work that would previously have been carried out by employees. The new definition excludes vacancies handled by professional and executive recruitment, and separately identifies community programme vacancies which are now excluded from the seasonally adjusted series. The overall effect of these changes was to increase the total unfilled vacancies by about 6,000 and to reduce the seasonally adjusted series by some 15,000. Details of the changes were published in the October 1985 Employment Gazette.