The concepts of employment and unemployment as set out by the 13th ICLS – Is there a need for revision? Some remarks from a European perspective

The concepts of employment and unemployment
as set out by the 13th ICLS – Is there a need for revision?

Some remarks from a European perspective1

1. Introduction

Question about the relevance of statistics refer to the degree to which they meet current and potential user needs. This implies that relevance is always a relative notion which varies depending on the users and on the use for which statistics are needed. When discussing the relevance of the ILO employment and unemployment concepts, this guiding perspective should be followed.

It is statisticians' duty to critically assess their key concepts at regular intervals to see whether they still capture the economic and social reality adequately, i.e. whether they are still relevant. At present, important international standards, that have a close link to labour market statistics, are in the process of revision, most prominently the SNA. Therefore, 26 years after the adoption of the Resolution concerning statistics of the economically active population, employment, unemployment and underemployment by the 13^th ICLS the invitation to have a fresh look at the standards agreed in 1982 comes at an appropriate time. 26 years are a long time in a world that has been facing substantial changes. The concepts of employment and unemployment are at the very heart of labour market statistics, and the question may be asked whether they are still adequate and can be left unchanged. If not, we should examine if there is a need for a revision or only for a fine-tuning, or even just for targeted supplementary indicators, leaving the present concepts unchanged.

In the European Union (concretely: in the European Statistical System ESS) some of these questions have been addressed. Others are on the agenda for further discussion. In the following, the issues in question and the response given so far are very briefly sketched out, and reference to recent and ongoing work is made. The view taken on several points is based on deliberations within a Task Force on the Quality of the European Labour Force Survey (LFS), in which Eurostat and Member States are reviewing the LFS across all quality dimensions². For this purpose, the relevance of the ILO labour force concept has been discussed. Discussions within Eurostat's Labour Market Statistics Working Group are also taken into account. The view presented below, however, is not an agreed ESS position as work is still ongoing.

2. The ILO concepts of employment and unemployment as implemented in the EU

While the 1982 resolution provides for clear guidance on the core elements of the concepts of employment and unemployment, some room is given to adapt and operationalize them with a view to the specificities of national/regional labour markets. This is, in particular, the case for unemployment.

To have a common operational definition of unemployment was deemed so important in the EU that the necessary details were incorporated in a specific legal act³. According to Regulation 1897/2000 current availability for work refers to the period up to the end of the second week after the reference week. Active search refers to the four weeks preceding the reference week. A list of steps considered to be active search is also included. Furthermore, the conditions under which lay-offs are counted as unemployed are given.

Regarding employment, precisions were agreed as regards the job attachment of seasonal workers and lay-offs. Unpaid family members not at work are treated as employed only if their period of absence does not exceed 3 months.

3. Elements to analyse when it is considered changing existing concepts

Revising well-established statistical concepts that have been used for a long time is a very serious undertaking. There are costs and side effects, in particular during the changeover to the new standards. However, there may be situations where, on balance, there are sufficient reasons for revision. In the case of the ILO labour force concept, the following, if confirmed, could justify such a revision:

(i) the structure and functioning of labour markets have significantly changed since the 1980s, and, as a consequence, the relevance of the concepts are reduced;

(ii) the statistical needs of users have changed substantially since the 1980s;

(iii) it has turned out that the concepts pose serious measurement problems.

After a general re-assessment of the definitional elements of the key concepts of employment and unemployment, positions on each of these points will be taken in the following. At the same time, the need of further guidance, of refining and supplementing the existing definitions and, beyond that, the desirability of further developing an alternative view on the labour market is addressed.

¹ Paper prepared by Eurostat.

² The interim report of the Task Force was presented to the LAMAS (Labour Market Statistics) working group in September 2008. The final report is expected for Summer 2009.

³ European Commission, Commission Regulation (EC) No 1897/2000.