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Australian Labour Account limitations

Conceptual limitations

The purpose of the Australian Labour Account is to support macro-economic analysis requiring data on the participation of the population in paid employment and related economic production. In addition, the Australian Labour Account is designed to be consistent in concept and scope with the Australian System of National Accounts (ASNA). For this reason, work which falls outside the ASNA definition of economic activity such as cleaning, cooking and child care produced and consumed within households, and voluntary work undertaken outside institutional settings such as coaching children’s sports teams, are excluded from the scope of the Australian Labour Account. Estimates of numbers of persons engaged, and hours spent, in unpaid work are available from other sources, e.g. How Australians Use Their Time, 2006 (ABS cat. no. 4153.0).

Content limitations

The macro-economic emphasis is again reflected in the level of disaggregation of Australian Labour Account data. The focus is on the national economy, with data disaggregated by industry at the Australian and New Zealand Standard Industrial Classification (ANZSIC) division and subdivision levels. Data are available both quarterly and annually, with quarterly data published in close succession to the Australian National Accounts. The development of a state level component, in line with the state component of the Australian National Accounts, would be a potential further extension of the Australian Labour Account.

Data source limitations

Data sources used in the Australian Labour Account are constrained by scope and other quality limitations.

Scope

Some types of activity conceptually falling within the scope of the Australian Labour Account may be excluded from, or not well measured in, the available data sources. These are summarised below.

Scope limitations impacting both household and business estimates:

• jobs associated with illegal or hidden activities (the non-observed economy) are likely to be under-reported in both business and household surveys;
• positions that are voluntary, with no remuneration at all, not even in kind, but working within a recognised institutional unit, are outside the scope of both business and household collections;
• non-salaried directors are not included in business or household sources;
• child workers under the age of five are outside the scope of business collections (those who are self-employed or contributing family workers) and household collections (all employed children under five); and
• there is no good source of data on jobs that are filled by two or more people under a job sharing arrangement. On both the business and the household sides, a position that is filled by a job sharing arrangement would be counted as multiple filled jobs, not a single job held by multiple employed persons.

• data on hours worked are calculated for a particular reference week each month, and are assumed to be representative of weeks for which data are not collected;
• industry estimates for the unemployed population are based on industry of last job worked (within the past two years) from the Labour Force Survey, and do not necessarily equate to the industries in which the unemployed are currently seeking work, nor do they include those unemployed persons who have never held a job previously;
• no adjustments have been made to align the Labour Force Survey unemployed persons or hours sought with the 2008 SNA residency and production boundaries, as there is no reliable information to derive estimates of additional hours of work sought by short term working visa holders. It is also assumed that defence force personnel and child workers are fully employed. The Labour Account should not be used to derive proportional measures such as an unemployment rate or participation rate, as the numerator and denominator are not strictly comparable;
• illegal non-resident job holders: the estimated number of short term (less than 12 months) visitors to Australia who work for Australian resident enterprises is based on numbers of working visa holders. No estimate is made for those working without an appropriate visa; and
• Australian residents living in Australia employed by overseas resident enterprises: an estimate of the number of jobs filled by these people has been deducted from household side estimates, based on data supplied by the Department of Home Affairs. This estimate only represents persons working in diplomatic or consular related jobs.

• domestic staff employed by private households are outside the scope of business surveys used in compiling business sources estimates of filled jobs, but would be in scope of the Labour Force Survey;
• jobs held by self-employed persons operating their business without a registered ABN fall outside the scope of business surveys, but would be in scope of household surveys;
• employees on workers’ compensation who are not paid through the payroll are not included in business side sources;
• estimates for employment subsidies in the Labour Payments quadrant are based on Commonwealth data sourced from the Department of Finance. No adjustment has been made for employment subsidies paid under State or Local government schemes;
• no adjustments have been made to labour payments for unpaid employed persons (both adult and child workers) working on a farm or in a family business (contributing family workers). It is likely that these employed persons are paid in-kind, but this is impossible to estimate with any degree of confidence;
• no adjustment has been made for payments made to child workers under self-employment arrangements in the Labour Payments quadrant. It is possible that self-employed child workers are not being captured in labour payment estimates, as they are likely to not have an ABN and therefore be out of scope of ABS business surveys. One of the most common occupations from the 2006 Child Employment Survey (ABS cat. no. 6211.0) was Leaflet or Newspaper Deliverer. It is likely that an employed child delivering leaflets would be treated as an independent contractor by their employer, and not an employee. In this situation, if the employed child does not have an ABN, they are unable to be selected for ABS business surveys.
• job vacancies data does not include vacancies available in:
• the non-observed economy (jobs associated with illegal or hidden activities);
• private households employing staff;
• foreign embassies and consulates; and
• Australian permanent defence forces.
• the Department of Employment, Skills, Small and Family Business Internet Vacancy Index, used to supplement ABS Job Vacancy Survey data for the Agriculture, Forestry and Fishing Division, only includes job advertisements listed on the internet. Job advertisements listed only in newspapers, on notice boards and other mediums (other than the internet) are not included;
• there is no known data source relating to hours worked but not paid, or hours paid but not worked; and
• the survey of Employee Earnings and Hours, which is used as a source for calculating hours paid, excludes employees in certain industries and in certain employment categories (e.g. employees on leave without pay, on strike, or casuals not rostered to work during the survey reference period, managerial employees where there is no link between pay and hours worked, and employees on workers’ compensation who are not paid through the payroll).

• Annual industry statistics (Australian Industry, ABS cat. no. 8155.0) compiled from the annual EAS are not available at the time required for compiling the latest annual Australian Labour Account estimates, requiring the extrapolation of Labour Account filled jobs (and related) data for up to seven quarters.
• There is a time lag between the current reference period and the release of data in Government Finance Statistics, Australia (ABS cat. no. 5512.0). Therefore, data for employment subsidies in the Australian Labour Account are extrapolated forwarded based on the movement of previous data.

• Data on numbers of child workers has not been collected since 2006. In modelling current estimates of numbers of child workers, assumptions are made about the proportion of children working, the industries in which they work and their propensity to hold secondary jobs.
• Data are not available for earlier parts of some series of the Australian Labour Account, and missing data have been estimated through applying movements or proportional distribution from a conceptually related series to observed Australian Labour Account data. Data estimated in this way should not be considered to be as statistically robust as data based on observed and comparable survey estimates.

• Jobs quadrant:
• quarterly estimates of private sector business sources filled jobs assume that movement in numbers of jobs reported are indicative of changes in benchmarked employment numbers reported in Australian Industry (ABS cat. no. 8155.0);
• that short term student visa holders have similar levels of employment to other resident students aged 15-24 years;
• that short term visa holders other than students and sponsored visa holders have similar levels of employment to the broader resident population;
• that permanent defence force personnel and employed children under 15 years do not hold secondary jobs; and
• that average proportions of multiple job holders with second, third and fourth jobs apply to time periods prior to 2014. While data collected prior to 2014 can identify whether an employed person is a multiple job holder, numbers of secondary jobs were not collected from the LFS prior to 2014.
• Labour Volume quadrant:
• that derived weekly averages sourced from the Survey of Employee Earnings and Hours (used in computing hours paid for) are equally applicable to employees who are not covered by the survey, including:
  • employees on leave without pay, on strike, or casuals not rostered to work during the survey reference period;
  • persons engaged in the Agriculture, Forestry and Fishing industry;
  • employees on workers’ compensation who are not paid through the payroll; and
  • members of the Australian permanent defence forces.