APPENDIX 1 EXPERIMENTAL EMPLOYMENT ESTIMATES
1 Over time, the ABS's annual data of industry performance have generally included measures of employment.
2 There are three main purposes for estimating employment:
- to generate statistics by business size range, employment being a frequently used and well understood measure of business size; estimation of employment for each business is a prerequisite for categorising businesses for this purpose
- to show the relative importance of each industry as an employer
- to provide measures of labour input and labour productivity.
3 One implication of the use of Business Income Tax (BIT) data in these statistics is that no direct measure of employment is available for those units which contribute to the estimates through the BIT source. This is because the ATO does not collect information about employment numbers. Unlike financial variables, which have a direct relationship to the data available from the BIT files, employment data are not readily amenable to being modelled using the same techniques. Further work therefore has been undertaken in order to devise a suitable modelling process, which is outlined below.
4 The methodology has delivered what are regarded as adequate broad estimates of the level of employment in each industry (at the division level) for the current year. Estimates for earlier years were also compiled using the same methodology; however, the growth in employment and the implied increase in average wages and salaries between years were not able to be reconciled with other relevant ABS series already published, namely, those from the Labour Force Survey and the Survey of Average Weekly Earnings. Because of this, employment estimates for prior years are not available from the Economic Activity Survey. For these reasons, the 2004-05 employment estimates should be regarded as experimental and used with caution.
5 In estimating employment for units whose data are sourced from the BIT files, the new methodology takes into account :
- whether a business is recorded as paying wages and salaries
- whether a business is an incorporated entity
- whether a business is a sole proprietorship
- for those businesses that are partnerships of individuals, industry averages (derived from the ABS's Labour Force Survey) in order to estimate the number of partners per partnership
- for those businesses that are partnerships of businesses, the assumption that the number of partners per partnership is zero.
6 For each business, an estimate of employee numbers is derived from its value of wages and salaries (if any) using industry averages. For each unincorporated business, these employee numbers are then added to an estimate of its number of working proprietors or partners, to produce an estimate of the total employment of the business. These estimates are then aggregated to the directly collected data to produce the estimates included in this publication.
7 The adequacy of the methodology will be reviewed at the time of compiling the 2005-06 estimates. It may be subject to further refinement over time as more data become available for analysis.
8 For further information about the employment estimates included in this publication, please contact John Ridley on (02) 9268 4541 or john.ridley@abs.gov.au.
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