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6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, 2006  
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Contents >> Methods >> Business Collections >> Chapter 25. Methods Used in ABS Business Surveys

Labour Statistics: Concepts, Sources and Methods was originally released in 2001 in both electronic and paper versions (cat. no. 6102.0). The paper publication will not be rereleased. However, the web version (cat. no. 6102.0.55.001) is being updated on an ongoing basis. This chapter was updated on 15 December, 2005.

INTRODUCTION

25.1 This chapter provides an overview of the survey methodology used in ABS business surveys, particularly the labour-related business surveys. It should be used in conjunction with Chapter 17 which provides a broad overview of ABS survey methodology, and Chapters 24-31 which provide more detail on aspects of survey design relevant to specific labour-related business surveys.


ABS BUSINESS REGISTER

25.2 The ABS maintains a register of businesses and other organisations (government departments, non-profit organisations etc.) operating in Australia (referred to as the ABS Business Register) which is the source of population frames for most ABS surveys of businesses. The largest businesses have complex operating structures, but the vast majority of businesses on the business register have simple operating structures. Information recorded on the business register includes: location of the business (state/territory), sector (public/private), industry in which the business is mainly engaged, type of entity (e.g. company, trust, partnership, etc.) and its employment. The register is regularly updated to add new businesses, record ceased businesses as 'dead' and change information about existing businesses.

25.3 The source of information for the majority of businesses on the ABS Business Register is the Australian Business Register (ABR), which is maintained by the Australian Taxation Office (ATO). The ABR was established by the ATO as part of the implementation of The New Tax System (TNTS) which was introduced from 1 July 2000. The ABR contains details of businesses and other organisations which have registered for and received an Australian Business Number (ABN) from the ATO. To register for an ABN, an applicant must be either a company or an entity carrying on an enterprise. Businesses with an annual turnover of $50,000 or more and non-profit institutions with an annual turnover of $100,000 or more must register for the Goods and Services Tax (GST) (and receive an ABN), while those with a lower turnover may choose to register. Most businesses, whether employing or non-employing, need to register with the ATO for GST and other taxation obligations including (for employers) Pay As You Go Withholding (PAYGW).

25.4 Previously, the ABS Business Register used ABS data to update information relating to businesses, and information from the ATO to identify new businesses and businesses no longer operating. Following the introduction of TNTS, the ABS moved to use the Australian Business Register, together with additional information from the ATO, as the source of information for the majority of businesses included on the ABS Business Register. Additional information is collected and recorded by the ABS for some businesses (generally those with more complex operating structures). Changes to the ABS statistical infrastructure arising from TNTS are described in Information Paper: Improvements in ABS Economic Statistics [Arising from The New Tax System] (cat. no. 1372.0). The impact of the infrastructure changes on labour market series (e.g. job vacancies, average weekly earnings) are noted in the chapters describing specific labour-related surveys. Changes to the ABS statistical infrastructure impacted initially on September quarter 2002 collections.


SCOPE OF THE ABS BUSINESS REGISTER

25.5 The ABS Business Register includes most businesses with an ABN on the ABR. To be included on the ABS Business Register businesses must have an ABN and be registered with the ATO for at least one type of tax obligation. The relatively insignificant economic activity of businesses which fall below the threshold for needing an ABN, and have chosen not to apply for an ABN, and illegal economic activity, remain outside the conceptual scope of the ABS Business Register.


STATISTICAL UNITS DEFINED ON THE ABS BUSINESS REGISTER

25.6 The ABS uses a statistical units model to describe the characteristics of businesses, and the structural relationships between related businesses on the ABS Business Register. The units model is also used to break groups of related businesses into relatively homogeneous components that can provide information to the ABS. The statistical units model described below was introduced in mid 2002.

25.7 The new units model allocates businesses on the ABS Business Register to one of two sub-populations. The vast majority of businesses are in what is called the ATO Maintained Population (ATOMP), while the remaining businesses are in an ABS Maintained Population (ABSMP). Together, the ATOMP and the ABSMP make up the ABS Business Register population.


ATO MAINTAINED POPULATION

25.8 As outlined above, most businesses and organisations in Australia need to obtain an Australian Business Number (ABN), and are then included on the ABR. Most of these businesses have simple structures and the unit registered for an ABN satisfies ABS statistical requirements. For these businesses, which comprise the ATOMP, the statistical unit is the 'ABN unit'.

25.9 All information required to support the ATOMP on the ABS Business Register is sourced from the ATO. This information is updated on a quarterly basis. During the quarterly update, new businesses and businesses ceasing to operate are identified. Changes to data items for ongoing units are also identified.


ABS MAINTAINED POPULATION

25.10 For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with the business. These businesses constitute the ABS Maintained Population. This population consists typically of large, complex and diverse businesses. The ABS units model for the ABSMP consists of three inter-related unit types:

Enterprise GroupThis is a unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991), including legal entities such as companies, trusts, and partnerships. Majority ownership is not required for control to be exercised.
EnterpriseThe enterprise is an institutional unit comprising (i) a single legal entity or business entity, or (ii) more than one legal entity or business entity within the same Enterprise Group and in the same institutional sub-sector (ie. they are all classified to a single Standard Institutional Sector Classification of Australia sub-sector). For further information on Standard Institutional Sector Classification of Australia (SISCA) refer to Chapter 16.
Type of Activity Unit (TAU)The TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment data for similar economic activities. When a minimum set of data items are available, a TAU is created which covers all the operations within an industry sub-division (and the TAU is classified to the relevant sub-division of the Australian and New Zealand Standard Industrial Classification). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry sub-division. For further information on the Australian and New Zealand Standard Industrial Classification (ANZSIC) refer to Chapter 16.
25.11 The majority of businesses in the ABSMP fall into the following categories:

  • all enterprise groups with employment of 100 or greater for which the ABN unit is not suitable for ABS statistical purposes;
  • large Not for Profit Institutions (NPIs);
  • all commonwealth and state government units and local government units for which the ABN unit is not suitable for ABS statistical purposes;
  • multi-state ABN units with employment of 200 or more (not included above) for which state benchmarks are required;
  • significant mining and manufacturing Unincorporated Joint Ventures (UJV); and
  • agriculture units.

25.12 Units in the ABSMP are maintained via a combination of personal profiling, mail profiling and targeted unit survey activity. The large, more complex units are profiled annually. The balance of the ABSMP is maintained on a rotating basis within a reasonable timeframe.

25.13 For further information on the ABS economic statistics units model, refer to Information Paper: Improvements in ABS Economic Statistics [Arising from The New Tax System] (cat. no. 1372.0).


THE COMMON FRAME

25.14 Each quarter a snapshot of the ABS Business Register, referred to as the common frame, is taken. The snapshot of the register is used as the frame for all sub-annual business surveys covering the reference quarter for which the snapshot was extracted. This common timing ensures that populations and sampling information are consistent across all surveys with a common reference period.


NEW BUSINESS PROVISIONS

25.15 New business provisions are adjustments made to survey estimates to account for births and deaths of businesses that have occurred up to the end of the survey reference period but which are not reflected on a survey frame (i.e.births and deaths which occur after the snapshot is taken but before the end of the survey reference period). The calculation of the new business provisions makes assumptions about the number of new ABN registrants which will result in births of ABN units on the ABS Business Register, and the average contribution of these birthed units to the item being estimated. The methodology assumes that the contribution of a new business is the same as the average contribution to estimates of like units already on the frame.


SCOPE AND COVERAGE OF ABS BUSINESS SURVEYS

25.16 The scope of ABS business surveys varies across collections. Most surveys using the ABS Business Register as a frame have either an industry orientation (e.g. monthly retail surveys) or an economy-wide orientation (e.g. the Economic Activity Survey and the labour-related business surveys). The scope of surveys that use the business register as a frame is restricted by the scope and coverage of the register itself (see discussion above). Surveys with broader or different scope are required to either supplement the business register for their frame, or use frames that have been constructed independently of the register by using relevant alternative data sources.

25.17 While the scope of ABS labour-related business surveys varies across collections, most are restricted to employing businesses (those which have registered for the ATO's PAYGW Scheme). However, the following groups of employing businesses are generally excluded from labour-related business surveys:
  • Employing businesses in the agriculture, forestry and fishing industry (ANZSIC Division A). Units in this industry are excluded, primarily because a very high proportion of agricultural enterprises have no employees. It would be disproportionately costly to survey a sufficient number of these businesses to obtain a sample of employees large enough to adequately represent this industry.
  • Private households employing staff (ANZSIC Group 970). There is incomplete coverage of private households employing staff on the ABS Business Register as not all such households are required to register with the Australian Taxation Office. It is because of their incomplete coverage on the business register that these units are excluded from the scope of the labour-related business surveys.
  • Foreign embassies, consulates etc. in Australia (ANZSIC Group 813). Practical collection difficulties and the low numbers of Australian employees involved have resulted in the exclusion of this industry group from the labour-related business surveys. Furthermore, the System of National Accounts does not consider these agencies to be resident units of the Australian economy, with the result that the associated compensation of employees (including those employees who are usual residents of Australia) is not a component of Australian GDP.


STATISTICAL UNITS USED IN ABS BUSINESS SURVEYS

25.18 The statistical units used in ABS business surveys vary across collections.

25.19 For business surveys using the ABS Business Register as a survey frame, the sampling unit most commonly used is the ABN unit for businesses with simple structures, and the TAU for businesses with complex structures. For these surveys, the sampling unit (ie. the ABN unit or the TAU) is often the same as the other statistical units (e.g. reporting and collection units) used in the survey. However, this is not always the case and in some surveys the statistical units differ.

25.20 For business surveys using alternative frames, the sampling unit usually corresponds to one of the economic units defined on the ABS Business Register.

25.21 For labour-related business surveys, a variety of statistical units are used. With the exception of the Industrial Disputes collection, all labour-related business surveys use the ABS Business Register as their frame. An independent frame is constructed for the Industrial Disputes collection. The sampling unit most commonly used for labour-related business surveys is the ABN unit (for businesses with simple structures), and the TAU (for businesses with complex structures) for each state of operation of the ABN unit/TAU (footnote 1). The collection and reporting unit used in the labour-related business surveys usually corresponds to the sampling unit. Where organisations are unable to provide data at the TAU/state level, special reporting units are created to collect information from the level within the organisation structure at which it is available. These special reporting units comprise either an aggregration of TAU/state units into larger units or a disaggregration into smaller units. In cases where a TAU/state unit is disaggregrated into a large number of similar small units, a sub-sample of these units is selected in order to reduce the reporting load on the providers.


COLLECTION METHODS USED IN ABS BUSINESS SURVEYS

25.22 Most ABS business surveys use either the mail-out/mail-back or the telephone interview collection methodology. A number of surveys use administrative by-product data. Please refer to Chapter 16 for further explanation of different collection methodologies.

25.23 Most business surveys, including the labour-related business surveys, have intensive follow-up procedures for non-response. Follow-up normally involves reminder letters and may also involve telephone contact. 'Priority' intensive follow-up is used for a number of surveys; this involves targeting the following types of non-responding units:
  • units that contribute significantly to estimates;
  • newly selected units (e.g. in ongoing surveys); and
  • units that did not respond in the previous survey cycle.


SAMPLE DESIGN USED IN ABS BUSINESS SURVEYS

25.24 Two types of business surveys are undertaken by the ABS: censuses, and probability sample surveys. Most ABS business surveys (whether they be censuses or sample surveys) use the ABS Business Register to create their survey frame. With the exception of the Industrial Disputes collection, all labour-related business surveys construct their frame from the ABS Business Register. An independent frame is constructed each month for the Industrial Disputes collection.

25.25 Once a survey frame has been compiled, whether it be from the ABS Business Register or another source, information is collected from certain businesses on the frame. In a census, information is collected from all of the units on the frame. In the case of probability sample surveys, information is collected from a random sample (or subset) of units on the frame.


SAMPLE SELECTION

25.26 When a sample is to be selected for an ABS business survey, a survey frame must first be drawn from the common frame (see paragraph 25.14). The survey frame is then divided (stratified) into groups (strata) with similar characteristics. The stratification variables used in the labour-related business surveys include state, sector (public/private), industry and employment size. Once the frame has been stratified, a small number of strata containing large or highly variable units are completely enumerated. For each of the remaining strata an equal probability sample is taken. Surveys using multi stage selection processes (such as the Survey of Employee Earnings and Hours) use additional steps to select their sample.

25.27 There are various constraints placed on sample selection. For most labour-related business surveys, sample selection is constrained by ensuring that a portion of the sample that is not completely enumerated is rotated, and that small businesses will be in the sample for no more than 12 successive quarters (for quarterly surveys other than the Labour Price Index). Some surveys are further constrained by ensuring that there is either minimal or maximal overlap with other surveys.

25.28 The level of sample rotation within surveys, and sample overlap between surveys, is controlled through the use of a system of synchronised sampling. The technique relies on assigning a permanent random number between 0 and 1 to each unit on the ABS Business Register. Samples selected from survey frames constructed from the ABS Business Register are restricted to those units with random numbers that lie in a certain interval. Rotation control is achieved by moving the interval to the right, and overlap control is achieved by constraining the selection interval for each survey to move within a specific range within the larger (0,1) interval.

25.29 Sample sizes vary across ABS business surveys. In determining the minimum required sample size for each survey, the following factors are taken into consideration:
  • the required level of accuracy from the survey;
  • the numbers of nil and defunct units on the survey frame (estimated from data obtained from other surveys);
  • the expected level of non-response (estimated from previous surveys); and
  • total cost and available resources.

25.30 The sample is allocated across the survey strata using techniques to minimise the variance of the estimates being produced for a fixed cost, or to minimise the cost for a fixed variance. This process is referred to as optimal allocation.


ESTIMATION METHODS USED IN ABS BUSINESS SURVEYS

25.31 Once survey data have been obtained, they must be weighted up to values that represent the whole (target) population. As discussed in Chapter 17 the estimation procedure is essentially the application of weights to the individual survey records. For ABS business surveys, the values of these weights are determined with respect to one or more of the following factors:
  • the probability of selection for each survey unit (probability weighting);
  • adjustments to agree with population benchmarks - to correct for imbalances in the characteristics of the selected sampled units (post-stratification, ratio estimation);
  • adjustments to account for problems with the survey frame - such as missing units (new business provisions); and
  • adjustment for non-response - to correct for further imbalances in the characteristics of responding sample units (post-stratification).

25.32 For censuses, aggregates need to be adjusted to account for non-response and problems with the frame.


ESTIMATION

25.33 Two main types of estimates are used in surveys constructing their frame from the ABS Business Register, namely number-raised estimation and ratio estimation. While some surveys rely solely on number-raised estimation, most will use ratio estimation in some strata. The labour-related business surveys use stratum-by-stratum ratio estimation in strata where the benchmark information is known and sampling efficiencies achievable are greater than with number-raised estimation; for strata where benchmark information is not available, number-raised estimation is used. Number-raised estimation and ratio estimation are discussed further in Chapter 17.


EDITING

25.34 Editing is used in ABS business surveys to correct a number of non-sampling errors such as those introduced by misunderstanding of questions or instructions, miscoding, non-availability of data, incorrect transcription, non-response and non-contact. Editing can be performed both on the values collected from respondents and on the accumulated survey results as part of the estimation process.

25.35 Some labour-related business surveys use 'significance editing' to reduce the editing load for the survey. Significance editing involves assessing each survey value to be edited against how greatly the survey estimate will be affected by using the unedited value. Only those values which will significantly affect the survey estimate are then edited.


NON-RESPONSE ADJUSTMENT

25.36 Adjustments for non-response are made in the estimation process for all business surveys. There are three categories of non-response for ABS business surveys: partial non-response; complete non-response; and refusal. The extent to which values are imputed depends upon the amount and the quality of data already provided. Partial imputation is used when the respondent has provided some data. Complete imputation is used when no data have been provided, or the respondent has refused to participate in the collection.

25.37 There are two sources from which imputed values can be derived for business surveys. The first is data provided by the particular unit to be imputed for. This may be data previously provided, or current data where a partial response provides some information. One specific example of this type of imputation is 'Beta imputation'. Beta imputation is an automatic imputation procedure that involves estimating the missing values by applying a growth rate to the most recently reported data for these units, provided that data have been reported in either of the two previous quarters. Collections run on an infrequent or one-off basis will not be able to use data previously provided for the imputation of a current missing value.

25.38 The second
source is data provided by other units believed to have similar responses to the missing data. One specific example of this type of imputation is Live Respondent Mean (LRM) imputation. LRM imputation generates a mean response from a group of similar units and uses this value to impute for units which are known or taken to be alive, but for which no other information is available or useful. Records imputed using the 'mean' do not contribute to estimates of variance.

25.39 Another example of using data from similar units is Hot-Deck imputation, where a non-responding unit is assigned the reported values of a responding unit which has similar characteristics. Hot-Deck imputation can be used where no historical information is available but a mean impute is not appropriate.

25.40 For complete non-response and refusals in completely enumerated strata, all data items for the unit are imputed, preferably using previously provided data. For complete non-respons
e and refusals in other strata, the unit can have data items imputed using the Live Respondent Mean, although imputation based on previously provided data is preferred. Where a live respondent mean is used it can be calculated explicitly for all data items or can be implemented via a weight adjustment technique. Refer to Chapter 17 for further information on non-response adjustment.


OUTLIERS

25.41 Two main methods for the treatment of outliers are used in ABS Business Surveys, namely Surprise Outliering and Winsorization. For further explanation of these methods see Chapter 17.


NEW BUSINESS PROVISIONS

25.42 New business provisions are used in the estimation process to allow for births and deaths of businesses that have occurred up to the end of the survey reference period but which are not reflected on a survey frame. The provisions are determined following the creation of the common frame, but are not applied until estimation. For further information, refer to paragraph 25.15.


RESPONSE RATE

25.43 The response rate for ABS business surveys is calculated as the number of responding units divided by the total number of live units in the sample.


FURTHER INFORMATION

25.44 For further details contact the Labour Market Statistics Section, on Canberra (02) 6252 7206.



FOOTNOTES

1. Prior to the September 2002 quarter, most labour-related business surveys used the management unit/state (MUS) as the statistical unit. In most cases, ABN unit/TAU accords with the management unit. <back

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