Measuring Decent Work through labour force surveys

1. Measuring Decent Work through labour force surveys Elisa M. Benes Household Surveys Unit ILO Department of Statistics Email: benes@ilo.org Workshop on Challenges and Strategies in Improving Labour Statistics in Africa Bamako, Mali (22-24 November 2010) ILO Department of Statistics

2. Contents • Labour force surveys relevance & topic coverage • Decent work indicators measurable through household surveys • Informal employment • Labour underutilization • Periodicity of data & labour force survey arrangements • Current ILO activities ILO Department of Statistics

3. LFS relevance & topic coverage • PEOPLE • Age/Sex • Marital status • Education • HOUSEHOLDS • Size/Composition • Income/benefits • Location Current activity status (in the reference week) of working age population • EMPLOYED (all jobs) • Branch of economic activity • Occupation • Institutional sector • Status in employment • Contract characteristics • Informal employment • Informal sector employment • Working time (usual & actual hours) • Time-related underemployment & other inadequate employment • Income from employment • Employment-related benefits • Social dialogue • UNEMPLOYED • Search methods • Duration • Qualifications • Previous work exp. • Characteristics of last job • Receipt benefits • NOT IN LF • Reasons • Desire to work • Availability • Job search • Qualifications • Previous work exp. • Characteristics of last job • Receipt benefits Best source of information about the Economically Active Population -One single source for Working Age Population (WAP) -All types of workers, jobs, branches of economic activity -Flexible, detailed probing permits precise measurement ILO Department of Statistics

4. Decent work indicators measurable through household surveys • More than half of the Decent Work indicators have as main source a household survey (Labour Force Surveys, Labour Force module, or child labour survey) • Main indicators: 12 out of 18 indicators • Additional & future indicators: 16 out of 29 indicators • Household surveys are also an important source of contextual indicators • 5 out of 11 indicators ILO Department of Statistics

5. Main indicators Employment-to-population ratio Unemployment rate Youth not in education & not in employment Informal employment Low pay rate Excessive hours Child labour* % employed in precarious work Occupational segregation by sex Female share of employment in ISCO groups 11 & 12 % pop. 65+ benefiting from a pension Union density rate Additional/future indicators Labour force participation rate Youth unemployment rate Unemployment by level of education Employment by status in employment % Own account workers & contributing family workers in total employment % wage employment in non-agricultural employment Labour underutilization Employees with recent job training Usual hours worked (hour bands) Rate of time-related underemployment Number/wages of casual/daily workers Gender wage gap Share of population covered by (basic) health care provision Share of EAP contributing to a pension scheme Decent work indicators measurable through Labour Force Surveys ILO Department of Statistics

6. Main indicators Employment-to-population ratio Unemployment rate Youth not in educ. & not in employment Informal employment Low pay rate Excessive hours Child labour* % employed in precarious work Occupational segregation by sex Female share of employment in ISCO groups 11 & 12 % pop. 65+ benefiting from a pension Union density rate Additional/future indicators Labour force participation rate Youth unemployment rate Unemployment by level of education Employment by status in employment % Own account workers & contributing family workers in total employment % wage employment in non-agricultural employment Labour underutilization Employees with recent job training Usual hours worked (hour bands) Rate of time-related underemployment Number/wages of casual/daily workers Gender wage gap Share of population covered by (basic) health care provision Share of EAP contributing to a pension scheme Decent work indicators measurable through Labour Force Surveys Most indicators are already a core part of LFS ILO Department of Statistics

7. Decent work indicators measurable through Labour Force Surveys Measurement based on • Standards adopted by the International Conference of Labour Statisticians (ICLS) • Countries’ best practices in measurement through labour force surveys Few in developmental stage • Measurement of income from employment through household surveys • Indicator(s) of labour underutilization • Measurement of indicators on stability and security at work, … ILO Department of Statistics

8. Relevance of LFS statistics Employment Stability & security Informal employment Voice & representation Informal sector employment ILO Department of Statistics

9. Relevance of LFS statistics Low pay GPG Excessive hrs. Time –Related Underemployment ILO Department of Statistics

10. unemployment Relevance of LFS statistics Labour market attachment ILO Department of Statistics

11. Relevance ofLFS statistics Characteristics of unemployed & labour market attachment ILO Department of Statistics

12. Informal employment Informal employment as % of total employment ILO Department of Statistics

13. Informal employment • Adopted by 17th International Conference of Labour Statisticians (2003) • To complement informal sector employment as a related but different concept • Informal sector employment: enterprise-based concept • Informal employment: job-based concept • Refer to different aspects of the informalization of employment • Important to measure in a coherent & consistent manner with informal sector employment • Important to keep separate for analysis & policy purposes ILO Department of Statistics

14. Definition of informal employment 17th ICLS (2003) Informal employment refers to Total number of informal jobs, whether carried out in formal sector enterprises, informal sector enterprises, or households (paid domestic workers, production for own-consumption), during a given reference period Key elements • Job-based concept (focus on characteristics of the job) • Includes all jobs (main & secondary jobs) • Includes jobs in all types of production units • Includes workers in all status in employment • Includes all branches of economic activity (agriculture & non-agricult) ILO Department of Statistics

15. Relation between informal sector employment & informal employment ILO Department of Statistics

16. Relation between informal sector employment & informal employment Informal sector employment Informal employment Formal jobs in IS enterprises Informal jobs outside of IS enterprises TOTAL EMPLOYMENT ILO Department of Statistics

17. Who has an informal job? (1) • Criteria to determine the formal / informal nature of jobs depends on status in employment Employees • Have informal jobs if their employment relationship is, inlaw or in practice, not subject to national labour legislation, income taxation, social protection or entitlement to certain employment benefits (advance notice of dismissal, severance pay, paid annual or sick leave, etc.) Note: Definition covers (i) de jure informal jobs and (ii) de facto informal jobs. ILO Department of Statistics

18. Measurement of informal jobs of employees in LFS Operational criteria to identify employees in informal jobs: • Lack of contributions to social security system by employer • Lack of entitlement to paid annual leave • Lack of entitlement to paid sick leave Note, it is not sufficient to use: • Lack of written employment contract • Casual/temporary nature of work ILO Department of Statistics

19. Who has an informal job? (2) Self-employed • Employers, own-account workers & members of producers’ coop. • Formal/informal nature of job depends on characteristics of enterprise • Have informal jobs if their enterprises are part of the informal sector • Contributing family members • Employment usually not subject to labour legislation, no contractual relationship • All have informal jobs regardless of whether the enterprise is formal or informal • Engaged in production for own final use by household • Employment not subject to labour legislation • All have informal jobs ILO Department of Statistics

20. Measurement of informal jobs of self-employed in LFS Informal employment of self employed • Employers’, own account workers, members of producers cooperatives • Requires identification of the enterprise or cooperative as belonging to the informal sector • Contributing family members • Question on status in employment • Engaged in production for own final use by their household • Question on branch of economic activity (industry) • ISIC, Rev. 3/3.1/4 permits identification (9810) ILO Department of Statistics

21. International Labour Office Department of Statistics

22. Labour underutilization ILO Department of Statistics

23. Labour underutilization • Intended uses • To supplement the unemployment rate and be reported along with it • Broad measure of the employment problem that: • better reflects people’s perception of “unemployment” • i.e. captures key economic AND social dimensions of “unemployment” • Proposed scope • Key mismatches between labour supply and demand • Undervalued labour ILO Department of Statistics

24. Labour underutilization • Key characteristics • Fully consistent with labour force framework • Builds on existing related concepts • Readily measurable with data from labour force surveys • Single composite indicator • Can be broken down into its components for deeper analysis and policy-making ILO Department of Statistics

25. Envisioned use of the indicator (18th ICLS, room document 13, page 28) ILO Department of Statistics

26. Employed Unemployed Not economically active Economically active population (Labour force) Labour force as a continuum From… ILO Department of Statistics

27. Labour force as a continuum Employed Unemployed Not economically active To… Labour underutilization ILO Department of Statistics

28. Components of labour underutilization Labour underutilization ILO Department of Statistics

29. Components of labour underutilization (1) Labour slack among economically active persons Labour slack among economically inactive persons Requires development of a classification of persons not in the labour force (based on desire to work, availability & job search) ILO Department of Statistics

30. Components of labour underutilization (2) Measurement based on level of educational attainment (ISCED 1997) and 1 digit occupational classification (ISCO-08) applied to main job only ILO Department of Statistics

31. Components of labour underutilization (3) ILO Department of Statistics

32. Discouraged Otheremployed Other inactive, available Time-related underemployed Employed, Skills underutilized Other inactive, not available Employed, low pay Labour underutilization within labour force framework Working age population Economically active Not economically active Unemployed Employed ILO Department of Statistics

33. Labour underutilization (LU):Calculation approach As a single composite measure Rate of labour underutilization Components treated as mutually exclusive (priority criteria): 1st step: Labour slack 2nd step: Low earnings 3rd step: Skills underutilization Components can also be calculated as overlapping and reported separately LU= labour slack + low earnings + skills underutilization Rate of LU=(LU / working age population or extended labour force )*100 ILO Department of Statistics

34. Examples: Unemployment rate &labour underutilization rate ILO Department of Statistics

35. Periodicity of data & LFS arrangements & strategies ILO Department of Statistics

36. National programme for LF statistics:13TH ICLS Resolution I, para. 2. Long-term needs (for structural in depth-analysis and as benchmark data) • Comprehensive data on the economically active population • In-depth statistics on relation between employment, income & other social and economic characteristics • Data on particular topics (children, youth, women) • At minimum every 10 years Short-term needs(for current purposes, compiled frequently & recurrent basis) • To encompass statistics of the economically active population and its components for monitoring of trends and seasonal variations • At minimum once a year (& twice to account for seasonal variations) ILO Department of Statistics

37. Labour force survey programme for current & long-term data needs For long-term labour force statistics programme • Occasional survey (e.g. one-off multipurpose survey) • Regular survey (e.g. inter-censal stand-alone or multipurpose survey) For current labour force statistics programme • Annual survey with periodic data collection for annual point-estimates • Continuous survey system with sample rotation for monthly/ quarterly/ annual average estimates Depending on resources & capacity ILO Department of Statistics

38. Some strategies to improve Labour force statistics programme • Objective: To build a regular labour force survey programme to provide for current & long-term data needs • Strategy: Progressive development & implementation ILO Department of Statistics

39. Annual labour force surveys • Periodic data collection • once a year, two, four or twelve times a year • point in time estimates • Continuous data collection • every week or fortnight • annual, quarterly, monthly averages

40. Annual labour force surveys with continuous data collection Advantages: • Seasonal variations over time are captured and period effects eliminated • Estimates reflect the average situation during a month, quarter or year • Flexibility in periodicity of data dissemination (depending on sample design) • No longer need to use concepts based on long reference periods (e.g. usual activity, annual income), which are prone to recall errors • Improved timeliness in dissemination due to continuous data entry & processing • Smaller dedicated field interviewers teams = better quality & lower staff turnover

41. Activities of the ILO:Work in progress • Labour force surveys & decent work indicators • Model labour force surveys materials based on standards & best practices • Building-block approach • Model labour force survey section & question sequences flow charts • Question elements (text, response options, skips, instructions) • Topic-specific flow charts • Explanatory notes • Definition sheets for derived variables • Indicator requirement sheets • Developmental work to pilot test question sequences ILO Department of Statistics

42. Activities of the ILO:Work in progress • Manual on Surveys of Informal Employment & Informal Sector • 11th Meeting of the Delhi Group (Geneva, January 2010) • Main draft available at (under 11th Meeting): http://mospi.nic.in/Mospi_New/site/DelhiGroup.aspx • Publication: forthcoming in 2011

43. Activities of the ILO:Work in progress • Labour underutilization • 2008: 18th ICLS Resolution concerning the development of measures of labour underutilization • 2009: Technical Workshop on measures of labour underutilization • 2010: Working Group for the Advancement of Employment & Unemployment Statistics • Objective: To propose draft recommendations for possible adoption by the 19th ICLS in 2013 ILO Department of Statistics

44. Working Group for the Advancement of Employment & Unemployment Statistics Current membership +5 representatives from Afristat, Eurostat, OECD ILO Department of Statistics

45. Merci / Thank you ILO Department of Statistics