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UNDERLYING CONCEPTS

NOMINAL DEFINITION

Labour Force Status is a classification of the relevant population into employed, unemployed or not in the labour force. The definitions align with the international standards adopted by the International Conference of Labour Statisticians.

OPERATIONAL DEFINITION

Labour Force Status is measured by establishing whether a person is employed, unemployed or not in the labour force (according to the relevant definitions) during a specified reference week.

Labour Force Status is established according to a set of priority rules whereby employment takes precedence over unemployment, and unemployment over not in the labour force. The priority rules provide an unambiguous and mutually exclusive labour force status, regardless of other activities that may be undertaken at the same time. For example, a person at work may also be actively seeking other employment; they are currently contributing to economic production and are therefore classified as employed, not withstanding their job search activities.

The ABS uses labour force status for classifying the Australian population according to their labour market activity. The ABS LFS provides the official estimates of labour force status. Labour force status is derived by asking a series of questions about a person's work-related activities, job search activities, and availability for work in the relevant reference period. The LFS collects labour force status for the usually resident civilian population aged 15 years and over. The criteria for determining a person's labour force status are (broadly) as follows:

• whether a person has work (that is, economic work for which payment is received such as wages, salary, profit, commission or payment in kind). Unpaid activities such as unpaid domestic work and volunteer community services are excluded;
• whether those who do not have work are:
  • actively looking for work; and
  • available to start work.

• a person who meets the first criterion is classified as employed and hence in the labour force;
• a person who meets both the subsequent criteria (i.e. without work, actively looking for work, and available to start work) is classified as unemployed and hence in the labour force; and
• a person classified as neither employed nor unemployed is classified as not in the labour force.

• worked for one hour or more for pay, profit, commission or payment in kind, in a job or business or on a farm (comprising employees and owner managers); or
• worked for one hour or more without pay in a family business or on a farm (i.e. contributing family workers); or
• were employees who had a job but were not at work and were:

• away from work for fewer than four weeks up to the end of the reference week; or
• away from work for more than four weeks up to the end of the reference week and received pay for some or all of the four week period to the end of the reference week; or
• away from work as a standard work or shift arrangement; or
• on strike or locked out; or
• on workers' compensation and expected to be returning to their job; or
• were owner managers who had a job, business or farm, but were not at work.

• had actively looked for full-time or part-time work at any time in the four weeks up to the end of the reference week and were available for work in the reference week; or
• were waiting to start a new job within four weeks from the end of the reference week, and could have started in the reference week if the job had been available then.

• the shorter questionnaire modules do not ask respondents who were not available to start work the reasons they were not available during the reference week. Therefore, the reduced questionnaire modules do not identify persons who looked for work in the four weeks to the end of the reference week but were not available to start work in the reference week because they were waiting to start a new job within four weeks from the end of the reference week (and could have started in the reference week if the job had been available then). These persons are classified as 'future starters'. Using the reduced questionnaire module such persons are classified as not in the labour force rather than as unemployed (about 3% of all unemployed in the Labour Force Survey);
• in the Labour Force Survey Questionnaire Module, persons on workers' compensation 'last week' and not returning (or who do not know if they will be returning to work), persons working without pay in a family business (contributing family workers) who are way from work, and persons away from work for four weeks or more without pay, are classified as either unemployed or not in the labour force. Where the reduced questionnaire module is used, all persons absent from work, but who usually work one hour or more a week, are classified as employed (about 0.8% of all employed identified in the reduced questionnaire module).

• the shortened set of questions which (as described above) cannot determined labour force status as precisely as the Labour Force Survey does. As a result, labour force status from the Census is best used as an explanatory variable to explain other phenomena, rather than for detailed analysis of the labour force itself.
• higher levels of item non-response in the Census which is generally associated with the wide-spread use of self-enumeration methodology. For more information see A Comparison of the Census and the Labour Force Survey.