6291.0.55.001 - Labour Force, Australia, Detailed - Electronic Delivery, Oct 2016 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 24/11/2016   
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INSIGHTS FROM THE ORIGINAL DATA


SAMPLE COMPOSITION

The Labour Force Survey sample can be thought of as comprising eight sub-samples (or rotation groups), with each sub-sample remaining in the survey for eight months, and one rotation group "rotating out" each month and being replaced by a new group "rotating in". This sample rotation is important in ensuring that seven-eighths of the sample are common from one month to the next, to ensure that changes in the estimates reflect real changes in the labour market, rather than the sample. In addition, the replacement sample is generally selected from the same geographic areas as the outgoing one, as part of a representative sampling approach.

When considering movements in the original estimates, it is possible to decompose the sample into three components:

  • the matched common sample (survey respondents who responded in both September and October);
  • the unmatched common sample (respondents in October but who did not respond in September, or vice versa); and
  • the incoming rotation group (who replaced respondents who rotated out in September).

The detailed decomposition of each of these movements is included in the data cube 'Insights From the Original Data'.

In considering the three components of the sample, it is important to remember that the matched common sample describes the change observed for the same respondents September and October, while the other two components reflect differences between the aggregate labour force status of different groups of people.

While the rotation groups are designed to be representative of the population, the outgoing and incoming rotation groups will almost always have somewhat different characteristics, as a result of the groups representing a sample of different households and people. The design of the survey, including the weighting and estimation processes, ensures that these differences are generally relatively minor and seeks to ensure that differences in characteristics of rotation groups do not affect the representativeness of the survey and its estimates. Monthly estimates are always designed to be representative of their respective months, regardless of the relative contribution of the three components of the sample.


LAST MONTH'S INCOMING ROTATION GROUP - QUEENSLAND

The incoming rotation group in Queensland in September 2016 was noticeably different in its labour force characteristics to the group that it replaced, and to the rest of the Queensland sample rotation groups, with a greater level of influence on the current month's estimate and movement estimate than usual. The ABS temporarily reduced the influence of this rotation group for the September original, seasonally adjusted and trend estimates, pending analysis of the labour force characteristics of this rotation group in October. This rotation group was over 13% of the Queensland sample, and around 2% of the total sample for Australia.

The October 2016 quality assurance process has confirmed that the characteristics observed in September are relatively consistent with those observed in October, suggesting that last month's data were representative of the new group. The ABS has therefore reversed the treatment applied in September, with the rotation group being given its full influence on September estimates.

As a result, some Queensland Labour Force series (such as full-time employment) now reflect larger than usual movements for August to September. This is, in part, a reflection of the change from an outgoing Queensland rotation group that had a high employment to population ratio in August 2016 (63.0 per cent), being replaced by a group with a low ratio in September 2016 (58.5 per cent). The full-time employment to population ratios for these groups were particularly different (44.9 per cent and 38.4 per cent respectively).

It is important to note that the trend series are relatively unaffected by the influence of a single rotation group change, as can be seen in the relatively small trend revisions.


INCOMING ROTATION GROUP - OCTOBER 2016

In original terms, the incoming rotation group in October 2016 had a higher employment to population ratio than the group it replaced (60.7 per cent in September 2016, up to 61.0 per cent in October 2016), but was only slightly higher than the ratio for the entire sample (60.9 per cent). Its full-time employment to population ratio was slightly lower than the group it replaced, down from 40.7 per cent in September 2016 to 40.5 in October 2016.

Its unemployment rate and participation rate were both slightly above that of the sample as a whole.

The incoming rotation group also had a reduced share of the population (11.8 per cent, down from 12.3 per cent for the group it replaced). This population share was lower than the other seven rotation groups and slightly lower than recent incoming rotation groups.


OUTGOING ROTATION GROUP - OCTOBER 2016

In looking ahead to the November 2016 estimates, the outgoing rotation group in October 2016, which will be replaced by a new incoming rotation group in November 2016, had a slightly lower employment to population ratio (60.2 per cent in October 2016) compared to the sample as a whole (60.9 per cent in October 2016). It also had a low full-time to employment ratio (40.1 per cent), compared to the entire sample (41.2 per cent).

In original terms, the unemployment rate for the outgoing rotation group in October 2016 was 5.0 per cent, which was lower than the 5.4 per cent for the whole sample. The participation rate for the outgoing rotation group in October 2016 was 63.3 per cent, also lower than the rate for the whole sample (64.3 per cent).


THE IMPORTANCE OF TREND DATA

As the gross flows and rotation group data are presented in original terms they are not directly comparable to the seasonally adjusted and trend data discussed elsewhere in the commentary, and are included to provide additional information for the original data. Since the original data are unadjusted, they have a considerable level of inherent sampling variability, which is specifically adjusted for in the trend series. The trend data provide the best measure of the underlying behaviour of the labour market and are the focus of the commentary in this publication.