6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Feb 2018  
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This document was added or updated on 26/05/2020.

AUSTRALIAN LABOUR ACCOUNT AND LINKED EMPLOYER-EMPLOYEE DATASET


INTRODUCTION

This chapter discusses the two new integrated data sources within labour statistics: the Australian Labour Account and the Linked Employer-Employee Database (LEED).

AUSTRALIAN LABOUR ACCOUNT

The Australian Labour Account provides a conceptual framework through which existing labour market data from different sources can be confronted and integrated, with the aim of producing a coherent and consistent set of aggregate labour market statistics.

The Australian Labour Account is macro-economic in scope, building on the International Labour Organisation fundamentals and expanding them to ensure consistency with the Australian System of National Accounts. It aims to extend the analytical capacity of national accounts data by providing a labour-specific lens.

The Australian Labour Account framework has been designed to conceptually align with the System of National Accounts production boundary (see Chapter 2: Institutional Units and the Economically Active Population). This ensures direct compatibility with National Accounts and productivity estimates, as well as providing a mechanism for bringing together conceptually related aggregate data from business, household and administrative sources.

The Australian Labour Account framework incorporates four distinct quadrants: Jobs, Persons, Labour Volume and Labour Payments. The framework covers all types of employment including employees, self-employed and contributing family workers.

Statistical Releases

There are two statistical releases currently published on a regular basis from the Australian Labour Account. The timing of statistical releases has been optimised so that quarterly releases are published within one week of quarterly National Accounts. Both quarterly and annual Labour Account estimates are published in Labour Account Australia, Quarterly Experimental Estimates (cat. no. 6150.0.55.003), The conceptual basis, data sources, and compilation methods are published in the Australian Labour Account: Concepts, Sources and Methods (cat. no. 6150.0). The first experimental annual estimates produced from the Labour Account were published in Labour Account Australia, Experimental Estimates, July 2017 (cat. no. 6150.0.55.001).

LINKED EMPLOYER-EMPLOYEE DATASET (LEED)

The Linked Employer Employee Dataset (LEED) is a cross-sectional database that uses administrative data from the Australian taxation system.

As of 2019, the LEED included more than 100 million tax records over six consecutive years between 2011-12 and 2016-17. The LEED grows by over 20 million records each year.

The LEED consists of three cross-sectional files: The person file, the jobs file, and the employer file.

The person file

Each person file contains data for all persons who either submitted an Individual Tax Return (ITR) or who were identifiable on a payment summary in the reference year. Each record includes de-identified demographic and geographic data, and aggregate income information.

Employed persons may be either employees (including Owner Manager of Incorporated Enterprises (OMIEs)), Owner Managers of Unincorporated Enterprises (OMUE), or both.

Employees are identified by the presence of aggregate employee income and at least one linked employee job.

Employees who have not submitted an ITR but who have provided their Tax File Number to their employer are imputed from Pay As You Go payment summary data.

OMUEs are identified by the presence of any of the own unincorporated business income types and a linked OMUE job.

Tax lodgers who are not employees or owner managers (such as persons with only investment incomes) are included on the person file to support statistical analysis on income.

This publication forms part of the Australian Bureau of Statistics' ongoing program to increase the range of regional statistics available, particularly through the use of administrative information collected by other government agencies.

The jobs file

The jobs file is a complete list of the job relationships held at any time during the reference year.

The jobs file is constructed primarily from Pay As You Go (PAYG) payment summary data. PAYG payment summaries describe the payments made to an individual by an employer within a financial year and include payment period start and end dates. Conceptually, payment summary data should include most employee/employer job relationships. OMUE jobs are derived from ITR data and are added to the jobs file, some of these link to businesses in the Business Longitudinal Analysis Data Environment (BLADE).

In some cases a synthetic employee job record has been created based on information in the person file. This has occurred when a person has recorded wage or salary information that cannot be identified in payment summary data. In some cases an employee job may not be able to be linked to an employing organisation due to recording errors or missing information.

A person can hold several jobs during the year, either concurrently (as a multiple job-holder) or non-concurrently. For a person who is an employee of several employers, each relationship is listed as a separate job. While a person may own and manage more than one enterprise, due to data limitations only one self-employment job can be recorded for any OMUE. In the LEED, an OMUE can hold other jobs as an employee.

PAYG payment summary start and end dates are used to determine the start and end of a job relationship, to identify concurrent job-holding, and to determine the duration of the job. These dates are known to have high measurement error rates, which are likely to inflate job and concurrent job counts. Some of this error may be due to misinterpretation and recording errors, but it is also expected that payroll system and report design have an influence.

Some treatments have been applied to address over counts of jobs or concurrent job-holding, including:

  • in cases where a person has received several PAYG payment summaries from the same employer, and the time between the end of the first payment summary and the start of the next payment summary is 31 days or less, this is counted as a single job.
  • in cases where a person has received several PAYG payment summaries from different employers, they are only considered to be concurrent if they overlap by more than 31 days.
  • in cases where a person has more than 10 jobs, those within the same industry sub-division are counted as a single job.

These treatments are aimed at minimising the impact of administrative errors while also reflecting a reasonably accurate view of differing job structures.

The LEED jobs file does not capture voluntary jobs and unpaid contributing family worker jobs.

The employer file

The employer file contains all employers in a job relationship with someone on the person file at any point during the reference year.

An economic units model is used to describe the characteristics of employers and the structural relationships between related organisational units. This model defines organisations by enterprise group, type of activity, location and legal entities.

The ABS profiles large, complex and economically significant organisations, and structures them to accord with the economic units model. Legal entities that are under common ownership or control make up an enterprise group, and are included in the profiled population. Legal entities are usually represented by a single Australian Business Number (ABN). Enterprise groups are broken up into one or multiple type of activity units, each of which represents their economic activity within a specific industry subdivision. The remainder of ABN registrants are assumed to have simple structures and are regarded as a single legal entity. These units are known as the non-profiled population. The two populations are mutually exclusive and cover all organisations in Australia which have registered for an ABN.

For further information on the economic units model, refer to Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0, paragraphs 4.25 to 4.37).

In the LEED, an employer is any legal entity in the non-profiled population that is linked to a job; and any type of activity unit in the profiled population that is linked to a job.

Most employers are present in BLADE, however the LEED employer population also includes unincorporated entities, which are identified in personal income tax data and are not otherwise included in BLADE or cannot be identified in BLADE. Industry and several other employer variables are not available for these unincorporated entities.

Scope

The LEED contains information for all persons who interacted with the Australian taxation system with reference to financial years after 2011-12. The LEED includes data for all persons who either submitted an individual tax return (ITR) or individuals who had a payment summary issued by an employer and then remitted to the ATO. Employees who did not submit a tax return and have not provided their Tax File Number to their employer will not appear in the LEED. Owner managers of unincorporated enterprises (OMUEs) who did not submit an ITR are also excluded.

The LEED includes all employers present on the BLADE who have at least one employee linked to them. Some small businesses are excluded from the BLADE (e.g. those that do not meet the turnover threshold at which they must register for Goods and Services Tax) and do not appear on the LEED. Synthetic records are created for these records where they are both unincorporated and owned by an Owner Manager of an Unincorporated Enterprise present on the LEED.

The LEED includes all sources of income, regardless of whether the income provider resides within Australia's economic territory.

Timeliness

The ABS receives data from the Australian Tax Office (ATO) approximately 16 months after the end of the financial year. This data then requires processing time to produce a coherent and clean persons dataset. These factors contribute to the delay of approximately two years between the end of the financial year and the availability of information from the LEED.

Integration Methodology

Initial data cleaning is undertaken to remove duplicate and erroneous records. In particular, job records are repaired to minimise the impact of administrative noise on output statistics, such as annual payment summaries issued in two separate parts.

The LEED uses deterministic integration. Jobs are linked to legal entities using ABNs.

Where a legal entity is part of the profiled population, the assignment of an employed person to a type of activity unit may be modelled. This occurs when the legal entity is part of an enterprise group with more than one type of activity unit.

Modelled assignment to type of activity units is based on a logistic regression model developed using 2016 Census data. The model references independent variables common to both Census and personal income tax data, including sex, age, occupation, and region of usual residence. These are used to predict the industry of employment, which conceptually aligns to a type of activity unit.

Where an employee has multiple job relationships with the same reporting ABN in an enterprise group, each job relationship is assigned to the same type of activity unit.

Based on the model, each job record is assigned a probability of being in any of the type of activity units present in the employing enterprise group. Referencing these probabilities, iterative random assignment is undertaken until employment benchmarks are met. Benchmarks are based on Quarterly Business Indicators Survey (QBIS) data. Where a unit falls out of scope of QBIS, BLADE employment levels are substituted where possible, otherwise no benchmarking is done.

Key Outputs

The LEED output includes (but is not limited to) the following:

For persons with income
  • Income types: Total, Employee, Investment, Own unincorporated business, Superannuation
  • Counts of earners
  • Distributional information: mean, median, quartiles, percentile ratios, gini coefficient, income share
  • Geography of home address
  • Demographic information: age, sex

In addition, for persons with jobs
  • Counts: Employed persons, Jobs, Employees, Owner-Managers of Unincorporated Enterprises, Multiple job holders
  • Status in employment: Employee, Owner-manager of Unincorporated Enterprise
  • Income: Employment, Employee, Own Unincorporated Business, Duration adjusted income per job (annualised)
  • Industry and Occupation
  • Sector (public/private)
  • Number of jobs held
  • Duration of jobs
  • Whether jobs held concurrently

The ABS has enabled access to the full LEED for approved staff seconded to the ABS from other government agencies. This enables the LEED to address a range of policy questions, such as those relating to small-area labour markets and specific industries. Access is provided for approved projects with oversight from the ABS to ensure that data confidentiality is maintained.

Statistical Releases

LEED data is disseminated through the publications listed below. Additional data is available through Customised Data Requests.

Jobs in Australia (cat. no. 6160.0)
Frequency: Annual, from 2011-12
Jobs in Australia (JIA) provides aggregate statistics from the Linked Employer-Employee Dataset. It provides information about filled jobs in Australia, the people who hold them, and their employers. JIA provides data across 2,288 Statistical Areas as well as Local Government Areas.

Personal Income in Australia (cat. no. 6624.0.55.002)
Frequency: Annual, from 2011-12
Formerly Estimates of Personal Income for Small Areas, Personal Income in Australia (PIiA) provides a comprehensive range of income indicators across small geographic areas. PIiA is now based on the LEED, ensuring better consistency with Jobs in Australia.

Microdata: Jobs in Australia (cat. no. 6160.0.00.001)
Frequency: Annual, from 2011-12
Release of Jobs in Australia data through TableBuilder. This enables users to build their own customised tables from the Linked Employer-Employee Dataset microdata, including for State and Commonwealth Electoral Divisions.

Legislative Environment

The Australian Bureau of Statistics acknowledges the continuing support of the Australian Tax Office (ATO).

The LEED includes tax data supplied by the ATO to the ABS under the Taxation Administration Act 1953, which requires that such data is only used for the purpose of administering the Census and Statistics Act 1905. Any discussion of data limitations or weaknesses is in the context of using the data for statistical purposes, and is not related to the ability of the data to support the ATO's core operational requirements.

The tax forms and instructions that are used to collect the underlying tax data used in this publication can be found on the ATO website. Information about business registration can be found on the ABR website.

The LEED includes ABR data supplied by the Registrar to the ABS under A New Tax System (Australian Business Number) Act 1999, which requires that such data is only used for the purpose of carrying out the functions of the ABS. Any discussion of data limitations or weaknesses is in the context of using the data for statistical purposes, and is not related to the ability of the data to support the ABR’s core operational requirements.

Legislative requirements to ensure privacy and secrecy of these data have been followed. In accordance with the Census and Statistics Act 1905, results have been confidentialised to ensure they are not likely to enable identification of a particular person or organisation. All personal information is handled in accordance with the Australian Privacy Principles contained in the Privacy Act 1988.

ABS data integration practices comply with the High Level Principles for Data Integration Involving Commonwealth Data for Statistical and Research Purposes.