New quarterly tourism labour statistics

This article explores the differences between the Tourism Satellite Account’s (TSA) traditional annual data source for labour statistics, the Labour Force Survey (LFS), and the quarterly data source, the Australian Labour Account. The article discusses the rationale for, and use of, the Quarterly Tourism Labour Statistics (QTLS).

The extensive bushfires and the COVID-19 pandemic have increased demand for more timely information on tourism activity.

The ABS has created an additional quarterly release that will use Labour Account data to produce experimental labour statistics. We will continue to release the annual TSA product, with the 2019-20 release due in December 2020.

These changes provide more timely data and higher quality quarterly tourism industry estimates.

This article explores the differences between TSA’s traditional annual data source, the LFS, and the quarterly data source, the Australian Labour Account, and discusses the rationale for, and use of, the QTLS.

Traditionally the main source of information on tourism activity produced by the Australian Bureau of Statistics (ABS) has been the annual Australian National Accounts: Tourism Satellite Account (TSA) which includes tourism employment statistics based on data collected in the Labour Force Survey (LFS). The extensive bushfires and the COVID-19 pandemic have increased demand for more timely information on tourism activity.

In response, the ABS has introduced a new product – TSA: Quarterly Tourism Labour Statistics (QTLS) to complement the annual TSA. The QTLS is an experimental product based on data from the Australian Labour Account, a relatively new and improved data source for industry labour statistics. The robustness of the Australian Labour Account industry estimates allows the production of quarterly statistics on tourism employment and jobs.

Tourism labour statistics provide important building blocks for the economic analysis of tourism. Historically, the TSA has produced annual estimates of tourism employed persons derived from quarterly LFS data. Estimates of the number of total, full-time, part-time, male and female employed persons by tourism industry were calculated for each financial year using the average of data collected in the LFS in the August, November, February and May months. For more information please refer to Australian National Accounts: Tourism Satellite Account.

LFS is designed to measure the labour force status and key demographics of the Australian resident population – that is, whether people are employed, unemployed or not in the labour force. LFS data also can be used to produce estimates of industry employment. However, as this is not what the LFS is designed to do, the estimates can be volatile at the level required to produce quarterly tourism statistics.

In July 2017, the ABS released a new labour statistics product that generated more robust quarterly industry statistics, the Australian Labour Account.

The Australian Labour Account places a broad range of existing labour market data into a conceptual framework that allows comparison and confrontation of data from these different sources and produces a coherent picture of the Australian labour market. It incorporates labour input aggregates (persons, jobs and hours) which describe supply and demand in the labour market, as well as labour related payments (such as income and costs). The framework covers all types of employment including employees, self-employment and contributing family workers.

The concepts and definitions underlying the Australian Labour Account are built on International Labour Organisation fundamentals, and expands them to ensure consistency with the Australian System of National Accounts. The result provides a set of core macro-economic labour market variables with both an industry focus and time series dimension.

The Australian Labour Account provides quarterly time series data in four quadrants: Jobs, Persons, Labour Volume and Labour Payments. Figure 1 shows the structure of the relationship between the four quadrants.

For more information refer to the Explanatory Notes for the Australian Labour Account.

The United Nations International Recommendations for Tourism Statistics states:

“As it is hardly feasible to comprehensively gauge and analyse employment in tourism industries on the basis of only one statistical source, the integration of data from different sources is a preferable solution. This method yields more comprehensive information, provides a better overview and a more consistent picture, and results in a more accurate analysis.” (https://unstats.un.org/unsd/publication/Seriesm/SeriesM_83rev1e.pdf page 68)

The Australian Labour Account does just that. While less timely than the LFS, the ABS considers the Australian Labour Account the best source of information on employment by industry as it has been specifically designed to produce the most comprehensive labour estimates for industries in Australia. The Australian Labour Account provides estimates of the number of jobs, hours worked, and associated labour income that align with industry measures of output in the economy.

The comparative strength of the industry information in the Australian Labour Account is a consequence of it being generally drawn from how businesses have been officially categorised, rather than from the descriptions of employed people (most of whom are employees) about the business they work in. The Australian Labour Account shows that there are a number of people in the labour market who, when responding to the LFS, will describe the business activities that are most relevant to their job, rather than the actual industry of the business that pays their wages or salary.

The ABS produce a range of tourism labour statistics that can be used for different policy and analytical purposes. The QTLS will complement the statistics released in the annual TSA providing a number of benefits for measuring the tourism industry including:

• More timely data; and
• Higher quality quarterly tourism industry estimates
   

allowing for

• Better assessment of the impacts of key events on the tourism industry;
• Improved decision-making information for policy makers;
• Additional labour statistic outputs for the tourism industry allowing for a greater range of analytical uses; and
• Future improvements in the measurement of productivity in tourism.
   

Annual tourism employment estimates based on LFS data will continue to be available for the time being.

The methodology for calculating quarterly tourism labour statistics is the same as used to create the annual statistics. Outputs are derived for each tourism characteristic and connected industry by applying the tourism value added industry ratio for each industry to labour estimates derived in the Australian Labour Account. These ratios are calculated during the TSA benchmark process (2006-07, 2009-10, 2012-13 and 2016-17). This method assumes that the employment generated by tourism in each industry is in direct proportion to value added generated by tourism in the benchmark year. Tourism characteristic and connected industries are then compiled in to tourism employment industries based on the concordance used in the TSA.

Part-time, full-time, male and female employment ratios are derived for each tourism characteristic and connected industry using ratios derived from LFS data. These ratios are applied to the tourism labour account estimates for each tourism industry and are then aggregated to calculate part-time, full-time, male and female estimates. The ratios derived from the May LFS are used to calculate June quarter tourism labour statistics, August LFS ratios are used to produce September quarter and so on.

Conceptually the tourism main jobs series is most aligned to the LFS employed person series that is published in the annual TSA. Having said that, the tourism total filled jobs series provides a more comprehensive measure of the overall size of tourism employment as it includes all people who have a main or secondary job in a tourism industry. Figure 2 compares these tourism estimates.¹

Australian Labour Account total filled jobs estimates are higher than tourism total employed persons estimates derived from LFS. This is due to a number of differences in the methodology and scope between the LFS and Australian Labour Account.

Tourism activities are generally labour-intensive and seasonal, and tourism industries typically employ more part-time and casual employees. The Australian Labour Account includes data for multiple job holders by the industry of main and secondary jobs while LFS estimates of employed persons in each industry are only available by the industry of main job.

For example, if an individual’s main job is in manufacturing and they also have a second job as a receptionist at a motel, they would only be included as an employed person in the manufacturing industry in the LFS. In the Australian Labour Account, they would be counted as employed in both the manufacturing industry and the accommodation industry. The expanded scope and additional data sources used in the Australian Labour Account therefore enables a time series that shows a total industry perspective of the total number of people employed in each industry. This allows better assessment of policy changes targeting a particular industry, providing a more complete picture of the number of people impacted by a change.

As well as the casualisation of the tourism workforce, many people employed in the tourism industry are short-term visitors residing in Australia and employed by Australian resident enterprises. These people are out of scope of the LFS but included in Australian Labour Account estimates.

There may be some downward bias in employment estimates for tourism industries based on LFS due to the timing of the collection, i.e., the LFS survey months which capture industry detail exclude the major Christmas holiday period and may also exclude other major tourism events.

The number of jobs in the economy exceeds the number of persons employed because some employed persons have more than one job in the same period i.e. they are multiple job holders. This is somewhat offset by any formal job-sharing arrangements (although this is not specifically measured in the Australian Labour Account).

When a business responds to an ABS survey they inherently provide information on the number of jobs in their business. In the case of multiple job holders, the same individual will be reported separately by each employer. The Australian Labour Account recognises this difference, and while the LFS does measure multiple job holding it does not present this information as a measure of the number of jobs in each industry.

For example, if a person was employed in three part-time jobs (working a total of more than 35 hours per week) and they resigned from these three jobs and assumed one full-time job, this would have no impact on the employment estimates from the LFS. However, it would lead to a decrease of two jobs in the filled jobs estimate in the Australian Labour Account. The number of part-time filled jobs would decrease by three, while the number of full-time filled jobs would increase by one. For more information on the difference between jobs and employed persons refer to the Australian Labour Account: Concepts, Sources and Methods.

For most tourism industries the employed persons estimate based on the Australian Labour Account is higher than the estimate produced using LFS data. This is due to the high rate of part-time and casual workers as well as the number of non-resident Australians employed by some tourism industries. As discussed above these factors are accounted for in the Australian Labour Account but not in the LFS. As Figure 2 shows, these impacts are most noticeable in the Cafes, restaurants and takeaways food services, Clubs, pubs, taverns and bars and Retail trade tourism industries.

Conversely in the Air, water and other transport, Travel agency and information centre services and Cultural services tourism industries, the employed persons estimate produced by the Australian Labour Account is lower than that based on LFS data. This is primarily due to people misclassifying themselves when responding to the LFS. For example, a person may be employed by a contract cleaning company that provides cleaning services to XYZ Travel Agency. When responding to the LFS this person reports they work as a cleaner for XYZ Travel Agency and are therefore included in the Travel agencies and information centre services industry by the LFS. However, when XYZ Travel Agency responds to an employer survey, this person is not included as they are not employed by the travel agency. The Australian Labour Account ensures that, through the confrontation and balancing processes applied, the employed person is correctly classified to the Building cleaning, pest control and other support services industry (which is not a tourism employment industry).

These examples help illustrate why tourism labour estimates based on the Labour Account provide a more comprehensive and higher quality estimate which supports a wider range of analysis and informed decision making.

Utilising Australian Labour Account data to produce quarterly tourism labour statistics is the first step to creating more accurate and timely statistical data on Australia’s tourism industry. It is anticipated that future publications will build upon current labour statistics outputs.

For further information about these and related statistics, please contact the National Information and Referral Service on 1300 135 070, or email client.services@abs.gov.au. The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.