‘Institutional units’ and the ‘economically active population’ form the basis of many labour statistics. A clear understanding of the ‘institution’ and of ‘economic activity’ is fundamental to the correct definition of these groups.

This chapter discusses the institutional units from which data are collected by the ABS in its business and household surveys. It also explains the concepts underlying measures of the economically active population produced by the ABS. These include the scope of economic activity and the United Nations System of National Accounts (SNA) production boundary, the scope of the economically active population, and the differentiation between current and usual economic activity.

The definition and measurement of institutions, which create jobs and therefore generate demand for labour services of the economically active population, and economic activity, by which the economically active population produce goods and services, are both governed by international standards and guidelines. The fundamental definitions of both are laid out in the 2008 SNA.

Standards and guidelines for measuring the economically active population are set out by the International Labour Organisation (ILO), and were first presented in the ‘Resolution concerning statistics of the economically active population, employment, unemployment and underemployment, 1982’ (No. 170), which was adopted by the Thirteenth International Conference of Labour Statisticians (ICLS). These standards and guidelines were subsequently incorporated into the ILO's Labour Statistics Convention, 1985 (No. 160).

In its manual Surveys of Economically Active Population, Employment, Unemployment and Underemployment (1990), the ILO discusses the concepts and definitions underlying these standards and provides technical guidelines for how to apply them to the collection of data through household surveys. The ILO article ‘Measurement of employment, unemployment and underemployment – Current international standards and issues in their application (2007)’ provides a summary update of changes in the concepts and definitions.

An institutional unit is defined as:

“4.2 …an economic entity that is capable, in its own right, of owning assets, incurring liabilities and engaging in economic activities and in transactions with other entities."

2008 United Nations System of National Accounts

Institutional units can take a variety of forms, each of which operates with different objectives and behaviours. The SNA describes two types of institutional unit, being ‘households’ and ‘legal or social entities.’ It also describes the ‘enterprise’, being a view of an institutional unit as a productive unit.

The enterprise is the primary unit of the ASNA.

For more detail on the definition of institutions, see chapter 4 of Australian System of National Accounts, Concepts, Sources and Methods.

Households, which are providers of labour services, are defined as groups of persons who share the same living accommodation, who pool some, or all of their income and wealth, and who consume certain types of goods and services collectively, mainly housing and food¹. Households are primarily consumer units, although they may also engage in production and accumulation.

Legal or social entities, which create jobs and therefore generate demand for labour services, are defined as institutional units whose existence is, either legally or by society, recognised independently of the persons or entities that may own or control them².

Legal or social entities include several forms of institutional units, such as ‘corporations’, ‘non-profit institutions’, and ‘government units’.

Corporations produce goods and services for sale on the market, usually as a source of profit for their owners. They may not, however, undertake final consumption.

Non-profit institutions (NPIs) produce or distribute goods and services, but not for the purpose of generating income or profits. They are diverse in nature, with some behaving like corporations, some effectively part of general government, and some undertaking activities similar to general government but independent of it.

Government units organise and finance the provision of goods and services to individual households and the community at large, mainly financed from taxation revenue. They are also concerned with the distribution and redistribution of income and wealth, in accordance with government policies. They undertake production and final consumption on behalf of the population.

An enterprise is a view of an institutional unit as a producer of goods and services. Most enterprises consist of individual legal or social entities, or in some instances, combinations of unincorporated legal or social entities. A household can constitute an unincorporated enterprise with respect to its production of goods and services.

In the ASNA, the primary unit is the enterprise, which is part of the ABS Economic Units Model. Within the Economic Units Model, enterprises are grouped into institutional sectors and subsectors based upon their economic objectives, functions and behaviour. An enterprise can be a single legal entity, or a group of related legal entities which belong to the same institutional subsector. The Economic Units Model structures the often complex and unique relationships between businesses and parts of businesses into a framework that facilitates the compilation of meaningful statistics.

Corporations, non-profit institutions, government units and households are intrinsically different from each other in their economic objectives, functions and behaviour. The institutional sectors of the SNA group together similar kinds of institutional units according to the nature of the economic role they perform³. SNA defines the following institutional sectors⁴:

• Financial Corporations;
• Non-financial Corporations;
• General government;
• Non-profit institutions serving households;
• Households; and
• Rest of the World.

The Standard Economic Sector Classifications of Australia (SESCA) (cat. no. 1218.0) is based upon international standards and contains a variety of classifications, including institutional sectors as laid out in the SNA. Within SESCA, the Standard Institutional Sector Classification of Australia (SISCA) describes these sectors. Within SISCA, sectors can be further divided into a range of subsectors, which more accurately describe the activities of the institutional units within them.

Sectors can also be divided more simply into public and private, where the former includes all government units and units controlled by government, and the latter includes all other units. This breakdown is often used in the classification and dissemination of statistics from ABS business surveys.

The ASNA utilises a combination of SISCA subsectors and public/private distinctions to assign institutions to ASNA institutional subsectors. These ASNA subsectors are the level at which legal entities may be grouped into enterprises in the ABS Economic Units Model.

For the compilation of statistics, the ABS has developed an Economic Units Model to further describe and categorise enterprises and their components. The Units Model is a tiered structure, containing four levels, namely the enterprise group, the legal entity, the type of activity unit, and the location unit. Most businesses are simple in structure and are considered to have only a single level (at all four levels, the business is identical), while some businesses are complex in structure and may be classified by all four levels of the Units Model.

The Enterprise Group (EG) is an institutional unit which contains one or more legal entities under common control and covers all of their collective activities in Australia. An EG can contain one or many legal entities and be divided into one or multiple Type of Activity Units or location units.

The Legal Entity (LE) is an institutional unit which covers all activities in Australia of a single entity which possesses some or all of the rights and obligations of individual persons or corporations, or which behaves as such in respect of those matters of concern for economic statistics. In most cases the LE is equivalent to a single Australian Business Number (ABN) registration. LEs approximate the SNA concept of legal or social entities, but the concept is extended to include households engaged in productive economic activity.

The Type of Activity Unit (TAU) is a producing unit comprised of one or more LEs, sub-entities or branches of a LE that can report productive and employment activities, and are homogeneous in their activity. TAUs operate within a single EG, and within a single industry subdivision in the Australian and New Zealand Standard Industrial Classification (ANZSIC).

The Location Unit is comprised of a single, unbroken physical area from which an organisation is engaged in productive activity on a relatively permanent basis, or at which the organisation is undertaking capital expenditure with the intention of commencing productive activity on a relatively permanent basis at some time in the future.

The diagram below illustrates the nature of the relationships between the different units within the model.

The economically active population comprises all persons who, during a specific period, furnished the supply of labour for the production of economic goods and services.

International Labour Organization, 13th ICLS, 1982

Understanding the economically active population is critical to interpreting statistics on labour supply and demand. The following section discusses the concept of economic activity, and defines the scope of the economically active population.

The concept of economic activity underlies measurement of the economically active population. The basis of this concept is found in the SNA concepts of 'production' and ‘economic activity’. Production is broadly defined as all activities within the SNA 'general production boundary'.

Within this boundary are all physical processes, under the control and responsibility of institutional units, by which labour and assets are used to transform inputs of goods and services into outputs of other goods and services. Within the SNA, a more restrictive production boundary also exists, known as the 'SNA production boundary', which separates economic activity from other production.

The SNA production boundary is a subset of the SNA general production boundary, allowing a distinction between economic activity and other production activities. Activities falling within the constraints of the SNA production boundary are considered to be economic activity, while those outside of it are not economic activity (regardless of whether they are within the SNA general production boundary or not). Activities within the SNA production boundary include all market and non-market production, and certain types of production for own final use.

Market production is considered in scope of the production boundary. Market production is the production of goods and services for sale on the market, at prices which are economically significant. Prices are said to be economically significant when they have a significant influence on the amounts the producers are willing to supply, and on the amounts purchasers wish to buy. Market production also extends to goods and services bartered; those used as payments in kind; those transferred within the same enterprise to be used as intermediate inputs into production over which the original producer has no responsibility; or changes in inventories of finished or in-progress goods, intended for one of the above purposes.

The activities of workers employed in factories, business enterprises, farms, shops, service undertakings, household enterprises and other economic units engaged in the production of goods and services intended for sale on the market are considered to be part of market production⁵.

Non-market production is considered in scope of the production boundary. Non-market production is the production of goods and individual or collective services produced either by non-profit institutions serving households or government entities that are supplied free or at prices which are not economically significant. Prices are said to be not economically significant when they have little or no influence on how much the producer is prepared to supply, and are expected to have only a marginal influence on the quantities demanded.

Among the most prevalent forms of non-market production are the provision of education and health care to the general public. The activities of employees of government and other social and cultural institutions producing these goods and services are considered to be non-market production⁶.

Production for own final use can be subdivided into two groups based, roughly, on the divide between goods and services. The production of goods for own final use is included within the SNA production boundary, while the production of domestic and personal services for own final use is mostly excluded.

The production of goods for own final use is considered in scope of the production boundary. Production of goods for own final use includes the production and processing of primary produce by households for their own final consumption, the construction of dwellings and structures for own use, and the production of fixed assets⁷ for own use.

The production of goods is included as, although the output is intended for own use, the producer theoretically has the option of selling the goods on the market after they have been produced (e.g. if a household constructs a dwelling, the dwelling can then either be lived in or sold on the market). This production closely resembles market production, and could become market production if the choice was made to sell rather than consume the output⁸.

The production of domestic and personal services for own final use is typically not considered in scope of the production boundary, however several exceptions exist.

The production of domestic and personal services is the production of services for consumption within the same household, such as the cleaning and repair of dwellings and household durables, goods and vehicles; the preparing of meals; caring for children or the sick; and the transportation of household members.

The decision to consume these services within the household is made even before the service is provided and, in contrast to the production of goods for own final use, the household cannot theoretically choose to sell the service after it has been produced (e.g. if a member of the household cleans a room or repairs a car, the cleaning or repair service cannot then be sold to another after it has been performed)⁹.

Although the production of household domestic and personal services is productive in an economic sense, they are excluded from the national accounts for practical reasons. From an SNA perspective, household services have little relevance for the analysis of inflation or deflation or other fluctuations within the economy, as they can't be sold and wouldn't have a price. Without substantial changes to the measurement of production, their inclusion could obscure what is happening on markets and reduce the analytic usefulness of national accounts data.

The SNA provides a number of justifications for this exclusion¹⁰, summarised as follows:

"6.30…the relative isolation and independence of these activities from markets, the extreme difficulty of making economically meaningful estimates of their values, and the adverse effects it would have on the usefulness of the accounts for policy purposes and the analysis of markets and market disequilibria."

2008 United Nations System of National Accounts

Domestic and personal services are also excluded from labour statistics because, without substantial revision to the way labour statistics are compiled, their inclusion would adversely affect the compilation of labour statistics that are relevant and useful in economic analysis. Using the current framework for labour statistics, which is linked to the SNA production boundary, the extension of the boundary to include the production of personal and domestic services by members of households for their own final consumption would result in all persons engaged in such activities becoming both economically active and self-employed. This would result in virtually the whole adult population being defined as 'economically active' and make unemployment virtually impossible by definition¹¹.

The production of housing services for own consumption by owner-occupiers is included in the SNA production boundary to account for large differences in rates of home ownership across countries. The production of own-account housing services has always been included in the SNA production boundary, and its exclusion would limit the comparability of the data both internationally and inter-temporally.

The paid employment of external staff to produce domestic and personal services for final consumption in the household is included in the SNA production boundary. The production of domestic and personal services by employing paid staff is considered market activity¹².

With the exception of own-account housing services and the paid employment of domestic staff, the production of domestic and personal services for own final use is not within the SNA production boundary, and therefore is not considered to be economic activity.

Volunteers are people who willingly give unpaid help, in the form of time, service or skills, to an organisation our group. Included in this category are the volunteer component of boards of management, fundraising committee members and auxiliary members.

Australian National Accounts: Non-Profit Institutions Satellite Account (cat. no. 5256.0)

Unpaid work and volunteer services are generally in scope of the SNA production boundary, however they are generally not considered in scope of the Australian production boundary in the ASNA and labour household surveys.

A distinction can be made between those who have an agreement to provide labour for token remuneration or only income in kind, those for whom there is explicitly no remuneration, and those where there is apparently no remuneration but the workers benefit directly from the output to which they contribute. In ILO statistics, all three types of worker may be included in the economically active population as employees.

In the SNA, persons working for token amounts or only income in kind are considered to be economically active if the unit employing these staff is responsible for whatever little remuneration is received. For example, if doctors or teachers work for only food and lodging, the value of this as income in kind is the only remuneration imputed to them, and they are considered within the SNA production boundary. Such instances may arise in religious institutions or in the wake of natural disasters.

If staff are purely voluntary, with no remuneration at all, not even in kind, but are working in a recognised institutional unit (business, government agency, not-for-profit organisation) engaged in economic activity, then these individuals are still regarded as being economically active in the SNA. Individuals providing services to groups of other individuals, such as coaching a children’s sports team, without any associated infrastructure, are not regarded as being economically active but rather engaging in a leisure pursuit¹³.

Although unpaid volunteers and volunteer services may fall within scope of the SNA production boundary, they are excluded from the ASNA and therefore, with the exception of contributing family workers, from Australian labour statistics. Persons working for token amounts or payment in kind are included in the ASNA and therefore in Australian labour statistics.

If family members contribute to the output of an unincorporated enterprise, they are assumed to receive an element of remuneration in kind, and as such are treated as being in the economically active population¹⁴. As such, Australian labour statistics include estimates for contributing family workers, even though other unpaid work is excluded.

The SNA states that illegal production should be included within the production boundary, providing a production process exists and the outputs have market demand.

The SNA classifies illegal production within two categories:

• The production of goods or services whose sale, distribution or possession is forbidden by law; and
• Production activities that are usually legal, but become illegal when carried out by unauthorised producers; for example, unlicensed medical practitioners.

The treatment of illegal activities within the SNA is based upon whether the action is considered to be a 'transaction' or an 'externality'. Transactions are actions (regardless of their legality) in which two units enter by mutual agreement, such as buying and selling goods or services. Externalities, however, are actions carried out by one unit which change the condition or circumstances of other units without their consent, such as theft, violence, pollution, or other unsolicited service or disservice.

Illegal actions that fit the characteristics of transactions are treated in the same way as legal actions within the SNA production boundary. Thus, a variety of illegal work is considered to be economic activity. This includes, but is not limited to:

• the production of illegal goods such as narcotics;
• the sale of stolen goods;
• working without authority (e.g. selling merchandise without a licence, working in the construction industry without a permit, or a foreign citizen working without an appropriate visa); or
• working off-the-book for tax evasion purposes or for fear of losing entitlements, or because the employer wants to avoid their obligations (e.g. superannuation payments, taxation, or other labour legislation requirements).

Illegal actions that fit the characteristics of externalities are not considered to be economic activity. Thus, thefts of goods from persons or households and other illegal activities which do not resemble transactions are not considered economic activity.

Illegal activity may involve both transactions and externalities. In such cases, these actions are considered separately, such that an action which is a transaction may be considered economic activity but one that is an externality is not. For example, theft is an externality and is not economic activity; however, the sale of those stolen goods is a transaction and may be considered economic activity.

Due to the difficulty in identifying and valuing illegal transactions, no explicit estimates for such activities are made in the Australian System of National Accounts and Australian labour statistics for the production of illegal goods, such as narcotics or for stolen goods. However, some illegal transactions are likely to be included if they are reported as part of legal activities or as income for taxation purposes, such as prostitution and illegal workers. As a result, their effects on employment and unemployment statistics are difficult to assess.

For more information refer to Information Paper: The Non-Observed Economy and Australia's GDP, 2012.

The diagram below summarises the preceding information, and shows how the SNA general and production boundaries are constructed.

1. Production of goods and services normally intended for sale on the market.
2. Production of other goods and services, such as government activities.
3. Production and processing of primary products, construction of dwellings, and production of fixed assets.
4. Value gained from owning own home, and hiring a person external to the household to provide domestic and personal services to the household in exchange for remuneration.
5. Cleaning and repair of dwellings and household items, preparation of food, care for children or the sick, and transportation of household members.
6. Unpaid work within an institutional unit (e.g. working for an organised charity), work for token amounts or payment in kind received from an institutional unit (e.g. doctors or teachers working for food and lodging), and work of family members contributing to the output of an unincorporated family enterprise (e.g. children working in a family restaurant).
7. Unpaid work not within an institutional unit (e.g. charity work as an individual), work for token amounts of payment in kind not received from an institutional unit (e.g. a volunteer fed or housed by individuals), and the provision of services to groups of individuals (e.g. coaching children's sport) without any associated infrastructure.
8. Sale of stolen goods, production of illegal goods such as narcotics, illegal or unauthorised work (e.g. visitors working without an appropriate visa, working without appropriate permits, and work that is 'off the book').
9. Theft and violence.

The diagram below shows how the concept of economic activity is operationalised by the production boundary within the ASNA and Australian labour statistics.

1. Activities of all employees remunerated in cash or in kind, including domestic paid employment.
2. Activities of employers, own account workers, members of producers' cooperatives and contributing family workers in units producing goods or services for the market. All activities in this category occur in household unincorporated market enterprises. Some goods or services produced may be consumed by the household. Includes the production of goods or services that are exchanged for other goods or services (barter). Includes self-employed workers rendering paid/remunerated domestic services to households.
3. Self-employment work in own household or another household with family ties that produces goods mainly for own final use. Considered in employment if such production comprises an important contribution to the total consumption of the household. A household with family ties relates to a household of which at least one member belongs to the family of the worker.
4. Illegal activities, despite a likelihood of being under-reported, are included in the scope of economic production in the ASNA if they are reported by businesses. These activities involve transactions between two parties, for example payments to employees below minimum rates or activities conducted without necessary permits or licenses.
5. Unreported transactional illegal activities are outside the scope of production in the ASNA. These activities include, for example, supply and purchase of illegal goods.
6. Volunteer work is performed without pay to advance a cause or produce a benefit that primarily helps someone other than one’s own household or family. Volunteer work may be carried out in units that produce goods or services. Such units may be market enterprises, non-market organisations or households with no family ties that produce for own final use.
7. Unpaid work for another household with family ties that produces services for own final use. The output of these services is consumed by the household to which the services are rendered. Household services may be paid or unpaid. When paid, the worker may be in paid employment or self-employment and is a person engaged in economic activity. When unpaid, the worker may provide the service to his or her own household or to another household with family ties (i.e., as an unpaid household service) or to another household with no family ties (i.e., as volunteer work in the production of services by households).

The economically active population is defined as all persons, within the population, who contribute to economic activity or are available to contribute to economic activity. The economically active population can be defined using the notion of time, such that a usually economically active population and a currently economically active population can be constructed.

The definition of the ‘population’ is therefore fundamental to the scope of the economically active population and must be clearly defined.

The notion of a ‘population’, from which the economically active population can be surveyed, is contingent on a variety of criteria. The two key criteria are those defining the economic territory, within which the population exists; and those defining residence, which enable the inclusion or exclusion of individuals, households, and institutions from that economic territory.

There are also other criteria applied for practical reasons and, as such, the survey population is usually not identical to the total resident population of the economic territory. The ILO manual ‘Surveys of the Economically Active Population, Employment, Unemployment and Underemployment, 1990’ highlights the need for these additional criteria:

"2.2 Surveys of the economically active population should, in principle, cover the entire population irrespective of activity status, sex, marital status, ethnic group, etc. In practice, however, certain restrictions may be necessary."

International Labour Organisation

Additional criteria which define the economically active population are age limitations, which restrict measures of the economically active population to certain age ranges; and membership of the armed forces, which typically restrict measures of the economically active population to the civilian population.

The following section discusses these four key population criteria, as they apply to Australian labour statistics, as well as the definitions of current and usual economic activity and the relationship between economic activity and the labour force.

The production of meaningful statistics about the economically active population requires that the economic territory to which the population relates is accurately defined.

The concept of economic territory in the SNA is not identical to the concept of country. The most commonly used definition is a territory under the effective economic control of a single government, and as such usually approximates the geographic borders of a country.

In principal, the economic territory of Australia as defined in the ASNA¹⁵ includes the geographic territory under the effective control of the Australian government, including:

• any islands belonging to Australia which are subject to the same fiscal and monetary authorities as the mainland;
• the land area, airspace, territorial waters, and continental shelf lying in international waters over which Australia enjoys exclusive rights or over which it has, or claims to have, jurisdiction in respect of the right to fish or to exploit fuels or minerals below the sea bed; and
• territorial enclaves in the rest of the world (that is, geographic territories situated in the rest of the world and used, under international treaties or agreements, by general government agencies of the country). Territorial enclaves include embassies or consulates, military bases, scientific stations, etc. It follows that the economic territory of Australia does not include the territorial enclaves used by foreign governments which are physically located within Australia’s geographical boundaries.

Specifically, the economic territory of Australia consists of geographic Australia including Cocos (Keeling) Islands, Christmas Island, Norfolk Island, Jarvis Bay, Australian Antarctic Territory, Heard Island and McDonald Islands, Territory of Ashmore Reef and Cartier Island, and the Coral Sea Islands.

The Joint Petroleum Development Area (JPDA) is considered joint territory between Australia and East Timor.

Within the Australian labour household surveys context, a distinction must be made between: the territories which determine the estimated resident population of Australia; those which are covered by household survey collection procedures; and those used to benchmark or ‘weight’ household survey estimates (i.e., the population benchmarks).

• The “other territories” of Australia, namely Jervis Bay, Christmas Island, Cocos (Keeling) Island, and Norfolk Island after the 2016 Census, are included in the estimated resident population of Australia, but excluded from household survey collection procedures and population benchmarks.
• The “external territories” of Australia, namely Territory of Ashmore and Cartier Islands, Coral Sea Islands Territory, Australian Antarctic Territory, and Territory of Heard and McDonald Islands, are not included in the estimated resident population, household survey collection procedures or the population benchmarks.

Within the Australian labour business surveys context, no further geographical restrictions are imposed. Samples for business surveys are typically selected from the ABS Business Register, and therefore all businesses within the economic territory of Australia may be included, providing they meet other relevant scope restrictions.

This is further detailed within the relevant entry for each collection.

Within the SNA, residency is defined as the economic territory with which an institutional unit or individual has the strongest connection - in other words, its centre of predominant economic interest. Each institutional unit or individual is a resident of one and only one economic territory.

Actual or intended residence for one year or more is used as an operational definition in many countries (including Australia) to facilitate international comparability.

Persons are considered to have the strongest connection with the economic territory in which they physically reside. In the broadest sense, the total population consists of either all usual residents of the country (the usually resident or de jure population) or all persons present in the country (the de facto population) at a particular time.

Household surveys use the first population category, the usually resident population. All persons who are usually resident in Australia are considered part of the usually resident population, regardless of nationality, citizenship or legal status.

To determine whether a person is usually resident, Australia has adopted a 12 in 16 month rule. This rule specifies that, to be considered a usual resident, a person must have been (or expect to be) residing in Australia for 12 months or more in a 16 month period. This 12 month period does not need to be consecutive.

The application of the 12 in 16 month rule in the labour household survey context cannot be so precise. A screening question asks if the respondent is a short term resident and, if so, they are excluded from the survey. Labour household surveys also include residents who are temporarily overseas for less than six weeks. However, the 12 in 16 month rule is explicitly applied in the estimated resident population, and the population benchmarks used to weight the LFS.

For more information regarding the 12 in 16 month rule, refer to Information Paper: Improved Methods for Estimating Net Overseas Migration, 2006.

The residence of students is described as:
"26.83a ... People who go abroad for full-time study generally continue to be resident in the territory in which they were resident prior to studying abroad. This treatment is adopted even though their course of study may exceed a year. However, students become residents of the territory in which they are studying when they develop an intention to continue their presence in the territory of study after the completion of the studies."

2008 United Nations System of National Accounts

Within the Australian labour household survey context, there is no special treatment for students and they are treated using the same 12 in 16 month rule. Within the Australian business survey context, there is no distinction made between students and other persons, such that they are included if they are an employee, irrespective of their length of stay in the country.

Within the labour business survey context, the de facto population is used, that is, all employees are included irrespective of their length of stay in the country. This is consistent with the SNA production boundary.

As a general principle, an enterprise is resident in an economic territory when it is engaged in a significant amount of production of goods or services from a location in the territory¹⁶.

An enterprise is resident in an economic territory when there exists, within the economic territory, some location, dwelling, place of production, or other premises on which or from which the unit engages and intends to continue engaging, either indefinitely or over a finite but long period of time, in economic activities and transactions on a significant scale. The location need not be fixed, so long as it remains within the economic territory¹⁷.

Corporations and non-profit institutions normally may be expected to have a centre of economic interest in the economy in which they are legally constituted and registered. Corporations may be resident in economies different from their shareholders, and subsidiaries may be resident in different economies from their parent corporations.

When a corporation, or unincorporated enterprise, maintains a branch, office, or production site in another territory to engage in a significant amount of production over a long period of time (usually one year or more) but without creating a corporation for the purpose, the branch, office, or site is considered to be a quasi-corporation (i.e., a separate institutional unit) resident in the territory in which it is located.

Within the Australian business survey context, residency is determined by deriving the sample selection of business frames from the Australian Business Register, which is an administrative data source maintained by the Australian Taxation Office (ATO). The registration of a business by the ATO is deemed to be a demonstration that the business has a centre of economic interest within Australia.

The international standards and guidelines recognise the need to exclude persons below a certain age from measures of the economically population, without specifying a particular age limit. The responsibility for setting such limits lies with individual countries.

Examples of factors influencing the age limit are:

• legislation governing the minimum school leaving age;
• labour laws setting the minimum age for entering paid employment;
• the extent of the contribution to economic activity by young people; and
• the cost and feasibility of accurately measuring this contribution in household surveys.

Australian labour and compulsory schooling legislation have resulted in low numbers of young people being involved in economic activity. While such legislation varies from state to state, the net result is that age 15 is the lowest practical limit at which it is feasible, useful and cost-effective to measure the participation of young persons in economic activity with acceptable accuracy through household surveys. It should also be noted that this limit applies to all workers, including contributing family workers who perform unpaid work in a family business or farm.

As such, Australia has adopted a minimum age limit of 15 years and over in labour household surveys. While many household surveys do not use this age limit, estimates of economic activity are often made only for persons 15 years and over. Consistent with international guidelines, Australia does not apply a maximum age limit.

For more information regarding the significance of employment of those less than 15 years of age, refer to Child Employment, Australia, Jun 2006.

Labour business surveys collect information irrespective of the age of the employee, consistent with the SNA.

The international standards require that members of the armed forces be classified as employed, and recommend that, for analytical purposes, the economically active population be divided into two parts: the armed forces and the economically active civilian population. The guidelines recognise that there may be difficulties in obtaining measures of the armed forces from labour household surveys due to scope restrictions, and that separate administrative counts may be necessary to supplement survey results to obtain statistics on total employment.

Within the Australian labour household surveys context, permanent members of the Australian Defence Force and members of non-Australian armed forces (and their dependants) are excluded.

The labour household surveys exclude permanent members of the Australian Defence Force because of practical collection difficulties. Where an estimate is required of the total economically active population, for example in international comparisons collated by the ILO, survey estimates are supplemented by administrative counts of the defence forces.

Non-permanent members of the Australian Defence Forces (i.e. Australian Army Reserve, Airforce Reserve or Navy Reserve) are included in the labour household surveys. Their work within the defence force is considered as economic activity in the same way as any other work.

The international standards identify two measures of the economically active population:

• The currently active population, measured in relation to a short reference period such as one week or one day; and
• The usually active population, measured in relation to a long reference period such as one year.

The currently active population provides a snapshot of the economically active population at a particular point in time. This current stock measure of the labour supply, collected at sufficiently frequent intervals, can contribute to the formation of national accounts data (particularly relating to compensation of employees), and can also be used to monitor labour market trends in general (and employment and unemployment levels in particular).

The usually active framework was introduced as an international standard in 1982. It provides a framework for the collection of data reflecting the dominant pattern of activities over a lengthy period. The use of a long reference period can provide more representative estimates of the economically active population, particularly where economic activity has significant seasonal variation. Further, as it permits collection of information on not only the main activity of individuals over the year but also their other activities (e.g. spells of employment and unemployment), it is useful for analysis of employment and income.

As Australia publishes frequent measures with short reference periods, in most cases it is the currently active concept which is measured.

The currently economically active population is conceptually equivalent to the labour force.

Because the concept of the economically active population includes both persons who contribute to economic activity and those who are available to contribute to economic activity, the current economically active population includes both employed persons and unemployed persons.

As most labour statistics reference a short reference period, the labour force is equivalent to the currently, rather than the usually, economically active population.

The currently economically active population is also referred to as the labour force. The labour force is conceptually equivalent to the labour supply available for the production of economic goods and services in a given short reference period. The labour force is the most widely used measure of the economically active population. The term 'labour force', as defined by the International Labour Organisation (ILO) in the international standards, is associated with a particular approach to the measurement of employment and unemployment. Essentially, this approach is the categorisation of persons according to their activities during a short reference period, using a specific set of priority rules.

The ABS labour force framework classifies a population, at a given point in time, into three mutually exclusive categories:

• Employed;
• Unemployed; and
• Not in the Labour Force (NILF).

Those persons contributing to economic activity are also known as employed persons, while those seeking to contribute to economic activity are also known as unemployed persons. The employed and unemployed categories together make up the labour force, which gives a measure of the number of persons contributing to, or actively looking and immediately available for, the supply of labour at that time. The third category (not in the labour force) represents the currently economically inactive population.

The labour force framework includes detailed rules for sorting the population into its categories. These rules are applied in population surveys through three steps. The first involves identifying the in-scope population. The second involves identifying, within the in-scope population, those persons who were engaged in economic activity and who were either at work or temporarily absent from work. The third step involves identifying, among the remaining persons, those persons who were actively seeking and available for work, or who were not seeking work because they were waiting to commence a job that they had already found. The labour force framework classifies persons identified in the second step as employed, and those identified in the third step as unemployed. The residual in-scope population is classified as 'not in the labour force'.

The labour force framework rules have the following features:

• the activity principle, which is used to classify the population into one of the three basic categories in the labour force framework;
• a set of priority rules, which ensure that each person is classified into only one of the three basic categories; and
• a short reference period, to reflect the labour supply situation at a specified point in time.

The rationale for the treatment of people temporarily absent from work, and of people waiting to start a job they have already found, stems directly from the labour supply perspective, and is discussed further below (and in the Unemployment chapter).

The activity principle of the labour force framework requires that a person's labour force status is determined by what they were actually doing in the reference period, in terms of their engagement in, or capacity to engage in, economic activity. Commonly, surveys seek responses to a series of activity-based questions, which reflect both the reference period and the priority rules. The purpose of the activity principle is to provide an objective measure of the labour force.

Under the priority rules, precedence is given to employment over unemployment and to unemployment over economic inactivity. To ensure that all economic activity is covered, a practical minimum quantity of work is required (one hour or more in the short reference period); this also ensures that only those completely without work can be classified as unemployed. Of those completely without work, the unemployed must have taken active steps to obtain work and be currently available for work. The employed, the unemployed and the inactive are thus mutually exclusive and exhaustive components of the population.

Together, the priority rules and the activity principle provide unambiguous labour force measures, 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 classed as employed, despite their job search. Similarly, a person working part-time while undertaking full-time study will be classed as employed. Likewise, a full-time student who is not working and is actively seeking and available for work will be classed as unemployed.

The concepts of employed and unemployed need to relate to short time periods to allow meaningful measures of current levels and changes in employment and unemployment. Two short reference periods are presented in the international standards as suitable for the purpose: one week; and one day. Since employment and unemployment are stock concepts, the statistical measures would ideally be of a precise point in time. However, the closest practical time-span that could represent a single point in time is one day or one week. The choice between a one week and a one day reference period is not a recent problem, but one that has been the subject of much consideration and debate by labour statisticians for over 50 years.

As a result of the application of the priority rule (under which economic activity, however little, has precedence over other non-economic activities), the labour force measured using a one week reference period must always be equal to or greater than the labour force measured using a single day of that reference week. The difference between the two measures depends on the relative number of persons who change their activity status during a week. The differences are likely to be fairly small, because, in the course of a week, the movement of persons from unemployed to employed, and from employed to unemployed, is more likely than persons changing their status from inside the labour force to outside the labour force.

The solution adopted in the international standards aims to satisfy different conditions which exist among countries. In countries such as Australia, where regular full-time employment is dominant, similar average results will arise from the use of a reference period of a week or a single day; however, the one week reference period is likely to provide results of lower variance and is therefore preferred. Conversely, where persons employed in casual, part-time, or temporary jobs constitute a significant proportion of total employment, the use of a one day reference period will provide a more precise measure of employment and unemployment than using a reference period of a week.

In household surveys, labour force status is derived by asking a series of questions about a person's work-related activities and availability for work in the reference period.

The criteria for determining a person's labour force status are (broadly) as follows:

• whether a person has work (i.e. economic work, including production and processing of primary products for own consumption, own-account construction and other production of fixed assets for own use, but excluding activities such as unpaid domestic work and volunteer community services); and
• whether those who do not have work are:
  • actively looking for work; and
  • available to start work.

The determination of labour force status from these criteria is as follows:

• a person who meets the first criterion is classified as employed, and hence in the labour force (currently economically active);
• a person who meets all of 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 (currently economically active); and
• a person not classified as employed or unemployed is classified as not in the labour force (not currently economically active).

Employed persons are defined as all persons aged 15 years and over who, during the reference week:

• 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 of incorporated or unincorporated enterprises); 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 less 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.

Unemployed persons are defined as persons aged 15 years and over who were not employed during the reference week, and:

• 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.

Persons not in the labour force are defined as persons aged 15 years and over who were neither employed nor unemployed. They include persons who are:

• retired or voluntarily economically inactive;
• performing home duties or caring for children;
• attending an educational institution;
• experiencing a long-term health condition or disability;
• experiencing a short-term illness or injury;
• looking after an ill or disabled person;
• undertaking travel or a leisure activity;
• working in an unpaid voluntary job;
• in institutions (hospitals, gaols, sanatoriums, etc.);
• permanently unable to work; and
• members of contemplative religious orders.

The ABS produces a number of statistics to summarise the state of the labour market in relation to the number of people in Australia who are either:

• employed,
• unemployed, or
• not in the labour force.

The diagram below depicts how the labour force framework is applied to all persons in Australia.

The labour force can be described and examined using a range of simple formulae. These provide both total numbers for various categories, as well as rates and ratios which serve as analytical tools for interpreting the data.

The Labour Force Survey publishes labour force participation rates and other population ratios on a regular basis. For more information on the contents and methodology of this survey, refer to the Labour Force Survey section of this publication.

The following example details how some of these formulae are calculated using example data from the Labour Force Survey.

• Civilian population 15 years and over = 19,745,000
• Civilian population aged 15-64 years = 15,982,833

• Employed persons = 11,998,800
• Employed persons aged 15-64 years = 11,530,000
• Employed persons aged 15-24 years = 1,824,300

• Unemployed persons = 748,100
• Unemployed persons aged 15-24 years = 279,900

• Underemployed persons = 1,114,600

The basic framework, as outlined above, can be extended to identify various sub-groups within the labour force.

The arrangements of employment vary among employed persons. Persons may be employed as employees; however, they may also be an owner-manager of an enterprise, either incorporated or unincorporated, and either with or without employees. The ABS Status in Employment classification allows these groups to be separately identified within the labour force. Employees may also be broken down into groups based on the arrangements of their employment. Such breakdowns may be based on casual employment, contract work, labour hire employment, or even on job stability and flexibility measures.

Hours of work can be used to break down employment into smaller categories based upon either actual or usual hours worked, or the desired hours worked. Employed persons are classified as employed full-time if they worked 35 or more hours in the reference week, or worked less than 35 hours in the reference week but usually work 35 or more hours in a week. They are classified as part-time if they usually work less than 35 hours and did so in the reference week.

Labour participation potential refers to potential labour which is not undertaken for a variety of reasons. It is a broader measure than unemployment, as potential labour can exist also within both of the other labour force categories of employment and not in the labour force.

The ABS produces both headcount (number of persons) and volume (number of hours) measures of underutilisation. Within employment, underemployment refers to a situation where the supply of labour is greater than the demand, and therefore employed persons are working fewer hours than they would like to. It is possible to identify employees who are underemployed by asking whether they want to work more hours than they currently do. Underemployment is a distinct measure of labour force underutilisation; however, it can also be combined with unemployment to form a broader measure of total underutilised labour in the economy.

The underutilised population can be further extended by the addition of select groups of persons not in the labour force, known as the marginally attached. Marginal attachment refers to persons who are not currently in the labour force, but who want to work. They are divided into two categories: those actively looking for work but not available to start work in the reference week, and those not actively looking for work but available to start work within four weeks. Within the second category are discouraged jobseekers, who are persons not looking for work because they believe that they are unlikely to find a job for a variety of reasons.

Within unemployment, it is possible to identify persons who are in long-term unemployment, defined as having duration of unemployment of 12 months or more. The number of unemployed people is an important social and economic indicator. The length of time that unemployed people have been looking for work or since they last worked (previously referred to as duration of unemployment) is also important from both an economic and social perspective. Long-term unemployment (i.e. where duration of job search is 52 weeks or more) is of particular social concern due to the consequences of being out of work for long periods, such as financial hardship and the loss of relevant skills. From an economic perspective, the longer people are unemployed the less likely they are going to be able to contribute to the economy.

Since its inception in 1960, the ABS Labour Force Survey (LFS) has collected information about duration of unemployment for unemployed persons. The survey collects data each month about the length, in completed weeks, of current (incomplete) spells of looking for work and/or time since last job from those who are currently unemployed.

The definition used by the ABS aligns with international standards (19th ICLS resolution (2013) concerning statistics of work, employment and labour underutilisation).

The section below discusses the treatment in the Labour Force Survey of particular groups of persons as employed, unemployed or not in the labour force. These groups include: participants in labour market programs (such as the 'Work for the Dole', 'Community Development Employment Projects (CDEP)' and 'Structured Training and Employment Project (STEP)' schemes); students; contributing family workers; and future starters.

A wide range of labour market programs are provided by governments. These programs aim to: assist the efficient functioning of the labour market; help individuals and industry to improve the productivity and skills of the labour force; and improve the skills and employment prospects of persons disadvantaged in the labour market. Programs implemented by governments take various forms including wage subsidies to employers, vocational training, paid and unpaid work experience, and assistance in finding employment.

The Labour Force Survey does not ask any questions directly related to participation in labour market programs. Such information is neither necessary nor sufficient to determine labour force status. Individual participants are counted as employed, unemployed or not in the labour force according to economic (work-related) activity undertaken in the survey reference period. The labour force measure, based on economic activity tests, is thus consistent over time and independent of administrative changes to labour market programs or their eligibility rules.

Persons working for pay in a job for which their employer receives a government subsidy are 'working in a job' (employed), regardless of the subsidy (about which the person may have no knowledge).

The treatment of participants in programs involving training but no subsidy (paid either to employers or participants) depends on the individual circumstances of the participant. If the participant worked for pay in a job (or was temporarily away from work) during the reference week, they should be classified as employed. If they did no paid work (and were not temporarily away from work), they are classified as either unemployed or not in the labour force depending on whether they actively looked for, and were available to commence work, in the survey reference period.

Below are some common labour market programs, and how the participants of these programs are treated in the Labour Force Survey.

Work for the Dole is a government program aimed at providing work experience to improve the skills, and future (paid) employment prospects, of persons registered for unemployment benefits. Under 'Work for the Dole' schemes, to maintain their eligibility for benefits, persons are required to undertake work-like activities at a host organisation (e.g. government agencies) or as part of a community-based project for a number of hours per week.

Superficially, such persons might be regarded as 'employed' as they are working for one hour or more and receive a payment. However, they are not paid for their work by the organisations undertaking the community projects. The participants are receiving only their unemployment benefit entitlement, paid directly by the administering government agency. As the community organisations do not have employer/employee relationships with the scheme participants, activity in a 'Work for the Dole' scheme is not considered to be engagement in an employee job.

Accordingly, the labour force status of persons participating in 'Work for the Dole' schemes is determined according to economic (work-related) activity undertaken in the survey reference period. They are classified either as unemployed or not in the labour force, depending on whether they actively looked for, and were available to commence work, in the survey reference period.

Various government programs have provided assistance to job-seekers. Interaction with these programs may constitute actively looking for work, and therefore impact on a person’s labour force status.

Up to June 2014, as well as being registered with any other employment agency, being registered with Centrelink as a jobseeker was considered to be an active step. In July 2014, being registered with Centrelink was removed, while being registered with a Job Services Australia provider was added.

In July 2015, Job Services Australia was replaced by the “jobactive” program. As the names of employment programs may change in the future, the question wording was updated to remove any explicit references to agencies or programs and now refers to the generic "employment agency".

Community Development Employment Projects (CDEP) was a scheme of the Australian Government which provided local employment opportunities for Aboriginal and Torres Strait Islander communities. Under the scheme, Indigenous communities and organisations could receive a grant, similar in value to the collective unemployment benefit entitlements of participating community members, to undertake a wide range of community development projects. Individuals could choose whether or not to participate in the scheme, by which they would forgo their unemployment benefits in exchange for paid employment. The work in which they might engage was determined by the community or organisation, and included activities such as housing repairs and maintenance, artefact production, road works, market gardening, fishing and other business and cultural activities.

Under the CDEP scheme, the community met all legal responsibilities to its workers, including the provision of award wages and conditions, workers' compensation insurance, and income tax liabilities. Accordingly, an employment relationship was deemed to have existed between the community (employer) and the members of the community undertaking work (employees). Participation in the scheme was considered to have been engagement in a paid employment job, and participants were classified as having been employed.

From July 2009 onwards, the CDEP scheme was discontinued in non-remote locations where the economy is well established. Individuals in these communities who were formerly paid wages under CDEP instead received alternative income support benefits.

Unless they had another form of paid employment, persons receiving income support benefits were not considered to have been employed. Instead, they were classified as unemployed or not in the labour force, depending on whether or not they were actively looking for, and were available to, work.

In remote communities, participants who joined CDEP prior to July 2009 continued receiving wages until June 2017, and continued to be classified as employed. New participants received income support benefits, and were treated as either unemployed or not in the labour force.

In July 2013, the Remote Jobs and Community Program (RJCP) replaced CDEP. Like CDEP, RJCP participants received income support payments, and were treated as either unemployed or not in the labour force.

On 1 July 2015, the Community Development Programme (CDP) replaced the RJCP. The CDP has two objectives: helping people find work, and allowing them to contribute to their communities and gain skills while looking for work. Under this program, job seekers with activity requirements are expected to do up to 25 hours per week of work-like activities. Activities can take different forms that are suited to the job seeker, their community and the local job market. Job seekers can undertake formal training (as an opportunity to gain qualifications), or foundation skills training (e.g. language, literacy, numeracy and driver training) as part of their activity requirements. Like RCJP, CDP participants receive income support payments, and are therefore classified as either unemployed or not in the labour force.

Persons engaged in full-time or part-time study who satisfy the criteria for classification as employed are treated in the same way as any other group. Their labour force status is determined according to economic (work-related) activity undertaken in the survey reference period. International students meeting these same requirements, including residency requirements, are similarly included.

Persons working without pay in an economic enterprise operated by a related person are called 'contributing family workers'. They are classified as 'employed' if they worked one hour or more in the reference week, and as 'unemployed' or 'not in the labour force' if they did not work during the reference week.

Although ILO guidelines indicate that an unpaid family worker is a person working without pay in an economic enterprise operated by a related person living in the same household, in Australia there is no requirement for the related person to be living in the same household.

Future starters are those persons who were not employed during the reference week, were waiting to start a 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. Future starters are classified in both international standards and in Australia’s labour statistics as unemployed.

Under ILO guidelines, future starters do not have to be actively looking for work in order to be classified as unemployed. Until February 2004, the Labour Force Survey definition of unemployed only included the subset of future starters who had actively looked for work in the four weeks to the end of the reference week. Hence, the Labour Force Survey treatment of future starters was not fully consistent with the ILO standards, as the precondition of active job search was not waived meaning some future starters were defined as 'not in the labour force'. From February 2004, future starters who had not actively looked for work are classified as unemployed in the Labour Force Survey, in line with ILO guidelines. Labour Force Survey estimates were revised back to April 2001 to reflect this change. This revision created a small trend break at April 2001 in unemployed persons and unemployment rate series.

Employment is determined using a minimum amount of work within a specific period. Guided by international standards, it is usually set at one hour, either per day or per week.

The ABS has always used a one hour per week criterion. The ABS uses this criterion for several reasons:

• It equally covers the various types of employment; including full-time work, part-time work, shift work, casual work, on-call work and other irregular employment which may be missed should a higher threshold be set.
• By classifying a person working even for only one hour as employed, it maintains the priority rules discussed above, ensuring that employment always takes precedence over other activities, regardless of the amount of time devoted to it.
• As the definitions of employment and unemployment are interrelated, it allows unemployment to be defined as a total lack of work.
• It allows employment to be used alongside hours worked as a complete measurement of labour input for productivity analysis.

It is important to understand that 'employed' is a binary category: a person is either employed or not employed (with the latter separated into either unemployed or not in the labour force). The employment classification does not take into account whether the employment is satisfactory for the employed person, or sufficient to live on. The ABS publishes additional information on the characteristics of employment, including number of hours worked and remuneration received which, when analysed in the light of other labour, economic, and social data (e.g. purchasing power, measured in the Consumer Price Index), provides more detail about the quality and sufficiency of employment.

The number of hours worked by employed persons is a statistic collected for a number of reasons. It is used to measure the total volume of labour input, which is useful for economic analysis, but also as a characteristic of employment, useful for analysis of economic and social well-being, as well as structural changes in the labour force. In addition, it is used to define jobs and employment as either full-time or part-time.

There is no standard international definition of 'full-time’; however, many countries specify a minimum number of hours per week in statistical collections. Australia considers persons who work a total of 35 or more hours in the reference week to be employed full-time. This can be calculated for individual jobs (e.g. was the person employed full-time in their main job in the reference week?) and for all jobs combined (e.g. did the person work full-time in the reference week, in one or more jobs combined?). This definition is designed to be a robust and stable measure across the labour market, and as such does not take into account what individual employees, employers or industries subjectively consider to be 'full-time.'

Australia defines full-time employed persons as those who worked 35 hours or more during the reference week in all jobs in headline labour force estimates and publications.

Hours of work are measured in multiple ways, including hours actually worked in the reference period (which includes overtime), hours usually worked (which excludes irregular overtime and leave), or hours paid for in the reference period (which includes paid leave).

The Standards for Labour Force Statistics presents statistical standards for five of the commonly used core labour force variables:

• Labour Force Status
• Status in Employment
• Hours Worked
• Full-time/part-time Status
• Duration of Job Search

The standard for each variable includes the concept(s), definition(s), classification, coding structure, questionnaire modules and output categories used in ABS interviewer-based and self-enumerated collections.

People in paid employment are those of working age who, during a short reference period, were engaged in any activity to produce goods or provide services for pay or profit. 

Nineteenth International Conference of Labour Statisticians (ICLS) 2013

The notion 'for pay or profit' refers to work done as part of a transaction in exchange for remuneration payable in the form of wages or salaries for time worked or work done, or in the form of profits derived from goods and services produced through market transactions. It includes remuneration in cash or in kind, whether actually received or not, and may also comprise additional components of cash or in kind income. The remuneration may be payable directly to the person performing the work, or indirectly to a household or family member.

According to the international guidelines, people in employment comprise:

• employed people 'at work', i.e. who worked in a job for at least one hour; and
• employed people 'not at work' due to temporary absence from a job, or due to working-time arrangements (such as shift work, flex time and compensatory leave for overtime).

The international definition of employed persons on "temporary absence" during a short reference period refers to those who, having already worked in their present job, were "not at work" for a short duration but maintained a job attachment during their absence. In such cases, "job attachment" is established on the basis of the reason for the absence and, in the case of certain reasons, the continued receipt of remuneration and/or the total duration of the absence as self-declared or reported, depending of the statistical source.

Reasons for absence that are by their nature usually of short duration, and where "job attachment" is maintained, include those such as sick leave due to own illness or injury (including occupational), public holidays, vacation or annual leave, and periods of maternity or paternity leave as specified by legislation.

Reasons for absence where the "job attachment" requires further testing include, among others: parental leave, educational leave, care for others, other personal absences, strikes or lockouts, reduction in economic activity (e.g. temporary lay-off, slack work), disorganisation or suspension of work (e.g. due to bad weather, mechanical, electrical or communication breakdown, problems with information and communication technology, shortage of raw materials or fuels). For these reasons, a further test of receipt of remuneration and/or a duration threshold should be used.

The duration threshold should be, in general, not greater than three months taking into account periods of statutory leave entitlement specified by legislation or commonly practiced, and/or the length of the employment season so as to permit the monitoring of seasonal patterns. Where the return to employment in the same economic unit is guaranteed, this threshold may be greater than three months. For operational purposes, where the total duration of the absence is not known, the elapsed duration may be used.

The ABS produces estimates of employment from both household and business surveys. The definition of employment used in household surveys is designed to be consistent with the international standards. The definition of employment used in business surveys relates more closely to paid employment.

Three different definitions of employment are used in ABS household surveys. Information on the relevant questionnaire modules is contained in Standards for Labour Force Statistics.

The LFS is designed to produce estimates of employment (and unemployment). The questionnaire module used in the LFS is referred to as the Labour Force Survey Questionnaire Module. It uses a comprehensive and detailed set of questions to precisely measure the numbers and certain characteristics of persons in employment and unemployment. The LFS questionnaire module is available from the LFS methodology.

The definition of employment used in the LFS aligns closely with the concepts and international definitions outlined in earlier chapters. Employed persons are defined as all persons aged 15 years and over who, during the reference week:

• 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 of incorporated or unincorporated enterprises); 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 less 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.

For employees absent from work, a condition of formal job attachment is considered to exist in any of the following circumstances:

• short periods of absence (less than four weeks to the end of the reference week);
• long periods of absence (four weeks or more to the end of the reference week) and receipt of wages or salary for some or all of the four week period to the end of the reference week, such as persons on paid leave;
• any period of absence away from work as a standard work or shift arrangement;
• any period of absence on strike or locked out; and
• any period of absence with continued receipt of workers' compensation payments, and an expectation to return to work for the current employer.

The LFS, while mostly aligned with the international definition, has a narrower temporal definition of formal job attachment for employees absent from work. The international definition notes a duration threshold should be, in general, not greater than three months taking into account periods of statutory leave entitlements specified by legislation or common practices, and/or the length of the employment season so as to permit the monitoring of seasonal patterns. Where the return to employment in the same economic unit is guaranteed, this threshold may be greater than three months. The LFS condition of formal job attachment for employees is outlined above.

In the LFS, those who are self-employed, employers and owner managers absent from work during the reference week are defined as employed without further testing of formal job attachment. Contributing family workers who are absent from work in the reference week are not considered to be employed. The international guidelines relating to formal job attachment outlined above apply to all employed persons who were temporarily absent from work.

In other household surveys and Special Social Surveys, where employment is an explanatory or classificatory variable, it is generally not practical to determine employment as precisely as in the LFS. While estimates of employment produced from these surveys are designed to be consistent with the international concept of employment, the definition used is slightly broader than that used in the LFS.

A shorter module, referred to as the Household Survey Questionnaire Module, is used in most other ABS household surveys and Special Social Surveys to produce estimates of labour force status. Employment is more broadly defined in these modules than in the LFS.

There is also a labour force module in the Census of Population and Housing. This module is shorter than the Household Survey Questionnaire module, and is generally completed through a self-enumeration mode.

While aggregates produced from household surveys and the Census which do not use the Labour Force Survey Questionnaire Module are designed to be consistent with the international concepts of employment and unemployment, the treatment of certain small population groups is simpler and less precise than that used in the LFS. Consequently, there are differences between estimates produced from the LFS and those produced from the Census or from household surveys using the reduced modules.

Concepts of employment used in ABS business surveys are narrower than the concept used in ABS household surveys. While estimates of employment from household surveys are comprised of persons engaged in work, estimates from business surveys are of jobs involving paid employment. There are two important distinctions between these estimates: the first relates to the statistical unit being measured, i.e. persons versus jobs; and the second to the concept being measured, i.e. (total) employment versus paid employment. These are discussed further below.

Estimates of employment from business surveys refer to jobs rather than persons. For example, persons holding jobs with different employers would be counted in ABS household surveys as employed once, but in ABS business surveys would be counted for each job held.

Estimates of employment from business surveys mainly relate to paid employment. Paid employment is one component of total employment; when combined with self-employment, it would provide a concept of employment that is consistent with the international concepts. However, the coverage of paid employment applied in ABS business surveys is narrower than that outlined in the international guidelines. It excludes:

• jobs involving paid employment that do not appear on business payrolls (from which information on employment is sourced within businesses), such as jobs that are paid in kind only, and jobs from which occupants are absent without pay (for a lengthy period); and
• jobs involving paid employment in businesses that have limited coverage on the ABS Business Register (from which the samples for most ABS business surveys are drawn), such as private households engaging staff.

Some industry and economy-wide ABS business surveys, however, do include a component of self-employment as well as paid employment in their surveys.

Estimates of the number of paid employment jobs (also referred to as employee jobs) from business surveys are not equivalent to estimates of the number of persons in paid employment jobs (also referred to as employees) from household surveys. When comparing estimates of the employee jobs from ABS business surveys to estimates of employees from ABS household surveys, the differences outlined above should be considered.

Estimates of employment are available from the following ABS household surveys:

• the LFS (and its supplementary and multi-purpose household surveys);
• the Census of Population and Housing; and
• Special Social Surveys.

Estimates of employee jobs are produced from the following ABS business surveys:

• the Survey of Employment and Earnings (SEE) (Public Sector only);
• the Economic Activity Survey (EAS) (predominantly Private Sector);
• the Survey of Employee Earnings and Hours (EEH); and
• from time to time, business surveys targeted to particular industries or sectors.

Estimates of employment are also available from the Labour Account and the Linked Employer-Employee Dataset (Jobs in Australia).

Many of these data sources include industry employment estimates. Use our Industry employment guide to learn more about the different measures and how to use them.

The monthly LFS is the official source for Australia’s employment and unemployment statistics. The definition of employment used in the LFS is outlined above. The survey uses a comprehensive and detailed set of questions to precisely measure the numbers and certain characteristics of persons in employment and unemployment as well as persons not currently economically active. Estimates from the LFS are available by State/Territory, Capital City/Rest of State, and 87 sub-State regions,

As discussed above, the Census of Population and Housing uses the Census of Population and Housing Questionnaire Module to produce employment estimates consistent with the international standards. However, because the self-enumerated questionnaire module defines employment less precisely than the LFS, estimates produced are not strictly comparable with those from the LFS. For these reasons, employment estimates from the Census should be used with caution in analyses where labour force activities are a major focus.

When comparing estimates of employment from the Census of Population and Housing with those produced from the LFS, users should also note differences between the two surveys in scope (for example, the inclusion of permanent defence forces in Census employment data) and methodology.

As discussed above, most Special Social Surveys use the Household Survey Questionnaire Module for personal interviews to produce employment estimates that are consistent with the international standards. However, because the reduced questionnaire module defines employment less precisely than the LFS, estimates produced are not strictly comparable with those produced from the LFS. When comparing employment estimates from Special Social Surveys with estimates from the LFS, users should also note differences in scope and methodologies across the surveys.

The Survey of Employment and Earnings is a business survey producing estimates of employee jobs in the public sector. There are conceptual reasons, as well as methodological reasons, for differences in estimates of employment produced from business and household surveys.

The Economic Activity Survey is a business survey producing employment estimates. There are conceptual as well as methodological reasons for differences in estimates of employment produced from business and household surveys.

The Employee Earnings and Hours Survey is a business survey producing estimates on the composition and distribution of earnings and hours paid for, of employees, as well as information on how employees' pay is set - by award only, collective agreement or individual arrangement. For further information on the scope and collection methodology of EEH, see the EEH methodology page.

ABS measures of employment arrangements are collected from a number of sources, and include the following aspects:

• Status in employment
• Full-time / part-time status
• Casual employment
• Fixed-term employment
• Independent contracting
• Labour hire work
• Digital platform work
• Job stability and flexibility

Status in Employment is a classification of employed persons according to the nature of their relationship to the enterprise in which they work.

The term Status in Employment is used in the international standard as outlined in the International Classification of Status in Employment (15th International Conference of Labour Statisticians, 1993). The term Employment Status should be avoided, as it is easily confused with the concept of Labour Force Status.

Previously in labour statistics two main employment classifications were used: Status in Employment and Employment Type. While the previous version of Status in Employment was necessary in the context of national accounting and the measurement of income, as Compensation of Employees (the largest component of Gross Domestic Product) is based on the System of National Accounts definition of 'employee'. it did not provide the most useful representation for analysis of the labour market.

Employment Type aimed to capture the fundamental nature of employment relationships, which was whether a person worked for an employer or operated their own business, regardless of the legal status of that business. This meant that in the Status in Employment classification, persons who operated their own incorporated enterprise (owner managers of incorporate enterprises (OMIEs)) were included in the Employees category, whereas in Employment Type, this group was identified separately.

The ABS revised the Status in Employment classification in 2014 to provide a single labour market relevant classification that can meet all uses. The categories are conceptually consistent and able to be aggregated or disaggregated to match the previous version of the Status in Employment classification and the Employment Type classification.

Definition

Status in Employment is determined by an employed person's position in relation to their job, and is usually collected in respect of a person's main job if they hold more than one job. The Australian Status in Employment classification classifies employed persons according to the reported relationship between the person and the enterprise for which they work, together with the legal status of the enterprise where this can be established. The groups distinguished in the Australian classification are:

• Employee: A person who works for a public or private employer and receives remuneration in wages, salary, on a commission basis (with or without a retainer), tips, piece-rates, or payment in kind, and who does not operate his or her own incorporated or unincorporated enterprise;
• Owner manager of incorporated enterprise (OMIE) with employees: A person who operates his or her own incorporated enterprise, that is, a business entity which is registered as a separate legal entity to its members or owners (also known as limited liability company), and hires one or more employees in addition to themselves and/or other owners of that business;
• Owner manager of incorporated enterprise (OMIE) without employees: A person who operates his or her own incorporated enterprise, that is, a business entity which is registered as a separate legal entity to its members or owners (also known as a limited liability company), and hires no employees apart from themselves or other owners of that business;
• Owner manager of unincorporated enterprise (OMUE) with employees: A person who operates his or her own unincorporated enterprise or engages independently in a profession or trade, and hires one or more employees in addition to themselves and/or other owners of that business;
• Owner manager or unincorporated enterprise (OMUE) without employees: A person who operates his or her own unincorporated enterprise or engages independently in a profession or trade, and hires no employees apart from themselves or other owners of that business;
• Contributing family worker: A person who works without pay in an economic enterprise operated by a relative.

The 'Employee', 'Owner manager of incorporated enterprise with employees', and 'Owner manager of incorporated enterprise without employees' series combine to provide estimates consistent with Compensation of Employees within the National Accounts.

Full-time/part-time status is widely used to categorise people or jobs in terms of the number of hours worked. This is of interest in understanding the nature of employment, particularly when cross-classified with socio-economic characteristics.

Most ABS household surveys, including the LFS, define full-time/part-time status of employed people in terms of the hours actually and/or usually worked (in all jobs). In some cases, a subjective approach based on respondents' perception of their full-time or part-time status is used. This approach is most often used where information is sought about work that is not currently being undertaken, and where recall problems may be encountered using a more objective approach.

ABS business surveys classify employee jobs, rather than people, as full-time or part-time. Classification of employee jobs as full-time or part-time is based on the whether the person has been engaged by the employer on a full-time or part-time basis.

Definition

People are defined as employed part-time in the LFS if they usually work less than 35 hours per week, and actually worked less than 35 hours in the survey reference week in all of their jobs. Full-time employed persons are defined as those who usually work 35 hours or more per week, regardless of how many hours they actually worked, and those who actually worked 35 hours or more in the reference week despite usually working less than 35 hours per week. Part-time employment is defined solely on the basis of hours worked, and does not depend on employee or employer perception of whether the person is full-time or part-time.

Actual hours worked refers to hours actually worked during normal periods of work in the reference week, as well as any overtime worked, excluding any time off or leave. Usual hours refer to those worked in a 'typical' period, as opposed to strictly in the specified reference period. Collecting information on usual hours reduces the impact that leave and other absences have on actual hours worked, while actual hours mitigates the subjective nature of defining 'usual' or 'typical' behaviour.

In the LFS both actual and usual hours worked information are collected, deriving full-time employed people as those who:

• usually work 35 hours or more per week (in all jobs); or
• although usually working less than 35 hours a week, actually worked 35 hours or more during the reference week.

Part-time employed people as those who:

• usually work less than 35 hours per week, and either did so during the reference week, or were not at work in the reference week.

In other household surveys only usual hours of work are collected, and full-time/part-time status is based on the total number of hours usually worked per week in all jobs. Full-time employed people are those who usually work 35 hours or more per week (in all jobs), while part-time employed people are those who usually work less than 35 hours per week (in all jobs).

Where only actual hours worked are collected (e.g. the Census of Population and Housing), full-time/part-time status is based on the actual hours worked in the reference week. Full-time employed people are those who worked 35 hours or more in the reference week (in all jobs), while part-time employed people are those who worked less than 35 hours in the reference week (in all jobs). Where actual hours worked is used, there is also a third category for people who are employed, but not at work in the reference week.

Where hours worked are not collected, full-time/part-time status is based on the respondent's perception of whether they work full-time or part-time, however this method is not considered a standard. Guidance can be given to refer to a 35 hour per week threshold to be full-time.

In business surveys, full-time/part-time status is collected for employee jobs. Full-time employee jobs are defined as those where the occupant normally works the agreed or award hours for a full-time employee in their occupation. If agreed or award hours do not apply, the job is regarded as full-time if the occupant usually works 35 hours or more per week. Part-time employee jobs are those where the occupant normally works less than the agreed or award hours for a full-time employee in their occupation. If agreed or award hours do not apply, the job is regarded as part-time if the occupant usually works less than 35 hours per week.

In comparison with the estimates of full-time/part-time status from the Labour Force Survey, other household surveys result in lower estimates of persons employed full-time, and higher estimates of persons employed part-time. This is because other household surveys do not include a question on actual hours worked in the reference week, so it is not possible to include persons who usually work part-time, but who worked full-time hours in the reference week, in the estimate of persons employed full-time. Usual hours worked is used in other household surveys because it can be meaningfully asked of all employed persons, whether or not they are at work during the reference week. Asking only one question for hours worked minimises the size of the question set and avoids complex sequencing.

There is no single measure to determine the number of people in casual employment; however, the ABS most regularly uses information on paid leave entitlements as a proxy for measuring casual employment in the Australian context. The ABS has three data items related to casual employment:

• Employees without paid leave entitlements;
• Employees who receive a casual loading; and
• Employees who consider their job to be casual (self-perception).

Paid leave entitlements

The ABS uses 'employees without paid leave entitlements' as the primary measure of casual employment. This is an objective measure that can be collected consistently. An employee with paid leave entitlements has access to either paid holiday leave or paid sick leave, or both. An employee is considered to be without leave entitlements if they identify as not having access to either paid sick leave or holiday leave, or did not know their entitlements.

Casual loading

In lieu of paid leave, some casual employees are entitled to a 'casual loading' - a higher hourly rate of pay to compensate for not being entitled to paid holiday and/or sick leave. Survey respondents are asked whether they receive a casual loading, however around one-third of respondents report not receiving a casual loading, despite being without leave entitlements. This may be the case, or may reflect a lack of awareness that a loading is included in their pay. In some households, responses are provided by one member of the household on behalf of other members, and the respondent may be unaware of whether a casual loading is paid to the other household members.

Self-perception

The third data item used to consider casual employment is whether the survey participant considers their job to be casual. Casual work is often viewed as less secure than other types of employment, as there may not be a guarantee of ongoing work, and hours of work may vary based on availability of hours offered by the employer. These are common characteristics of casual employment, but they apply to casual workers to varying degrees, and may also apply to non-casual workers. An employee's perception of whether or not their job is casual may be based on commonly recognised features of casual employment such as these, and may or may not reflect the actual conditions of their employment. For example, an employee may perceive that they are guaranteed a minimum workload per week, but this may not align with their employer's understanding.

A fixed-term contract is an employment contract which specifies that employment with the employer is not expected to continue beyond a particular date or event.

Independent contractors are sometimes referred to as consultants or freelancers. The term 'contractors' is also frequently used, however this is a broad term that is often used to describe people with a variety of forms of employment, for example, not only true independent contractors, but also employees engaged in short-term or fixed-term work, often engaged through a third-party (e.g. a labour hire firm/employment agency). The ABS measure of independent contractors refers to people who are not employees, but who may be operating in a similar manner to employees.

Independent contractors are persons who operate their own business, and contract to perform services for others without having the legal status of an employee, i.e. persons who are engaged by a client rather than an employer. Independent contractors are engaged under a contract for services (a commercial contract), whereas employees are engaged under a contract of service (an employment contract).

Questions in the Characteristics of Employment Survey (COE) identify the key characteristics of independent contractors. These questions are:

• Do you work as an independent contractor in your job?
• Do you receive a pay slip/advice?
• Do you/Does your business invoice or bill clients/employers?
• Excluding wages and salary, are you able to make drawings from your employer/business?

The following table shows how people are classified as independent contractors.

Instead of contacting employers directly, some people engage the services of a labour hire firm or employment agency to act as a third party to assist in finding suitable employment. Similarly, some businesses use the services of these firms to source labour rather than directly engaging workers.

Labour hire firms and employment agencies are engaged in personnel search, or selection and placement of persons for an employing organisation. Such firms may either match employees and employers directly, or might provide labour through their own pool of employees.

Labour hire firms and employment agencies perform a number of functions in the labour market, including maintaining a pool of potential employees, matching a person directly with an appropriate employer, and assisting employers to source suitable staff. They often also bear employee labour costs, such as wages, workers compensation and superannuation, which are transferred to employers through service fees.

The ABS, like most national statistical organisations, is working to expand its statistics on relatively new and emerging forms of employment, including digital platform workers. While digital platform workers and their work have always been included within existing labour statistics on employment and hours, they are a relatively small group of workers who have not been separately identifiable.

Digital platform work is a relatively new form of digitally-enabled employment but it also shares common elements with older forms of short-term employment, that have always existed. Many occupations include a combination of longstanding forms of employment, together with new and emerging forms, including digital platform work.

Specifically measuring digital platform workers and their working arrangements will provide insights into the extent to which this working arrangement is used in Australia and how this is changing over time, the nature of digital platform work and the characteristics of digital platform workers.

The ABS has been working with other parts of the Australian Government, including the Department of Employment and Workplace Relations, to ensure that data gaps for digital platform workers are effectively identified and progressively addressed.

Concepts and international guidelines

People in employment are those of working age who, during a specific reference period, were engaged in any activity to produce goods or provide services for pay or profit. Employment consists of work for at least an hour in the reference period.

The international statistical community (including the Organisation for Economic Co-operation and Development and the United Nations Economic Commission for Europe) are in the process of developing conceptual and measurement approaches for new forms of employment, including digital platform workers. The ABS is involved in these discussions and is leveraging the experience of a broad range of countries, given this is still a relatively new area of labour statistics around the world.

In 2013, Resolution I of the 19th International Conference of Labour Statisticians (the forum that sets international standards for labour statistics) defined digital platform work as

"any productive activity performed by persons to produce goods or provide services carried out through or on a digital platform".

In 2022, the United Nations Economic Commission for Europe published a more detailed definition for digital platform workers:

"Digital platform employment refers to employment performed through an online tool or an app that matches supply and demand for employment, most often based on an algorithm. An important aspect to consider in this context is that digital platform employment is about the assignment of individual tasks (smaller or larger), rather than about jobs (United Nations Economic Commission for Europe Handbook on Forms of Employment, 2022)."

The ABS is taking the evolving international conceptual and measurement frameworks for digital platform workers and applying it in the Australian context, beginning with a series of experimental questions that will be asked in conjunction with the Labour Force Survey, asked of respondents in the outgoing survey rotation group.

Digital platform work and the gig economy

The ‘Gig Economy’ is a very broad concept, and potentially includes many different groups of people that can be categorised in different ways. For instance, it can potentially include a combination of digitally-enabled and non-digitally-enabled forms of employment. 

Within digitally-enabled employment it can also involve a broad range of groups of workers and work, such as rental economy workers (e.g. Airbnb), marketplace workers (e.g. eBay), and labour services (e.g. Uber). It is important to note that not all of these people are necessarily in scope of the standard definition of employment that is used by the ABS.

The gig economy also encompasses many different activities, which range from buying and selling goods to providing short term labour services, such as providing care.

Given this breadth it is important for the ABS to consider the scope for its initial measurement of digital platform work and workers. Given the work associated with the supply of labour services through digital platforms are the most relevant aspect of the gig economy for labour statistics, and of the highest interest in Australia, the ABS has focused on this in its initial scope.

The ABS is defining digital platform work as:

"the provision of fixed duration labour services, in the form of tasks/jobs which are accessed by the worker through digital platforms and are paid per unit of work delivered through the same platform".

Figure 1 outlines a framework for gig economy work, including identifying the labour services digital platform work component of the gig economy, which is the measurement focus of the ABS.

It is important to note that some businesses allocate work to their employees using digital platforms, through applications and algorithms, without their workers being considered digital platform workers. This reflects some of the inherent challenges in measuring digital platform work and workers, given many businesses and jobs in the labour market are increasingly digitally-enabled.

Digital platform workers are usually considered to be legally and functionally a subset of owner managers, rather than employees, according to the status of employment classification (which categorises employed people based on the nature of their relationship with the enterprise in which they work).

However, as with independent contractors, whom the ABS has been separately identifying using additional survey questions since 2008, there may be some digital platform workers who work in a way that is noticeably different to other types of owner managers. For example, some of them may not necessarily have a registered Australian Business Number.

There may be a considerable proportion of digital platform workers who are multiple job holders, who may be operating as employees in their main job and a digital platform worker in their secondary job. This type of additional work is commonly referred to as a “side hustle” by those working in this way.

Digital Platform Worker survey content and approach

The ABS has developed an initial experimental survey module on digital platform workers for the 2022-23 financial year, which it is currently in the field. The initial module is included in the ABS Multi-Purpose Household Survey, which is asked of outgoing respondents from the monthly Labour Force Survey.

From this, the ABS expects to progressively analyse data through 2022-23, to identify further refinements to the survey questions for 2023-24, and to determine what initial experimental statistics can be produced for 2022-23.

The questions in the initial Digital Platform Workers module include:

• Whether people have undertaken paid-per-task work through digital platforms in the last 4 weeks
• The different types of digital platforms used, and the type of tasks undertaken
• How long they have been using digital platforms to undertake paid-per-task work
• Reasons for undertaking digital platform work and preferred work arrangements
• Time spent searching or bidding for tasks
• Hours spent undertaking paid tasks on digital platforms (in the past week)
• Hours spent undertaking unpaid tasks associated with digital platform work (in the past week)
• Percentage of total earnings from digital platform work

The Labour Force Survey collects information on industry, occupation, hours and other working arrangements, and a range of demographic characteristics (for example, age and sex). Some of this information will also be available to understand digital platform work and workers.

Measures of job stability complement measures of hours of work, full-time and part-time status, and other classifications of jobholders (such as status in employment), in order to further describe the nature of employment conditions. The ABS collects a range of data items related to job stability and flexibility. These include data on expectations about job tenure (for example, whether an employee expects to be with their current employer in 12 months’ time), the variability of earnings and hours from week to week, whether an employed person has guaranteed minimum hours, and whether an employed person is a shift worker, or is required to be on call or standby.

Job flexibility measures include whether employees had an agreement with their employer to work flexible hours, whether they usually work at home in their main job, and the main reason for working at home.

Status in employment

Status in Employment is collected in household collections. Each of the three labour force status questionnaire modules includes questions to derive Status in Employment. They are:

• the Labour Force Survey Questionnaire Module used in the ABS Labour Force Survey (interviewer administered or on-line collection);
• the Household Survey Questionnaire Module used in other ABS household based surveys (interviewer administered); and
• the Census of Population and Housing Questionnaire Module used in the Census, and also suitable for use in other self-enumeration and administrative data collections conducted by agencies other than the ABS.

Full-time/part-time status

Full-time/part-time Status is collected in the following surveys:

• the Labour Force Survey;
• household based surveys, such as the Survey of Income and Housing;
• the Census of Population and Housing;
• the Survey of Employee Earnings and Hours; and
• Average Weekly Earnings Survey.

Casual employment

The following ABS household surveys collect data on measures of casual employment:

• Labour Force Survey
• Characteristics of Employment Survey (COE);
• Multipurpose Household Survey topics:
  • Retirement and Retirement Intentions
  • Work Related Injuries.

In addition to the household surveys, the Employee Earnings and Hours business survey also collects information about whether an employee is casual. In this survey, employers are asked to identify whether the employees selected in the survey are casual, and in conjunction they are asked whether these employees receive a casual loading or a higher rate of pay to compensate for a lack of leave entitlements. Information on employees is collected directly from the employer's payroll records, and this is an alternative way of looking at casuals as in this survey they are identified as such by their employers.

Fixed term employment

Information on fixed-term employment is available from the Characteristics of Employment Survey (COE). Data classifying employees of businesses as permanent, fixed-term contract, or casual are available from the Survey of Employee Earnings and Hours (EEH).

Independent contractors

Information on independent contractors is collected every second year from 2014 as a rotating questionnaire module in the COE survey.

Labour hire workers

Information on labour hire workers is collected every second year as a rotating questionnaire module in the Characteristics of Employment Survey (COE).

Digital platform workers

Information on digital platform workers is collected in the Multi-Purpose Household Survey, from 2022-23 onwards, which is asked of outgoing respondents in the monthly Labour Force Survey.

In time, the ABS expects to introduce a dedicated module within the ‘Characteristics of Employment’ supplementary topic in the Labour Force Survey, which already collects a broad range of working arrangement information from employed people on an annual basis.

Job stability and flexibility

Information on job flexibility and stability is available from the Characteristics of Employment Survey (COE).

The 2008 System of National Accounts (SNA) provides one definition of a job:
"19.30…The agreement between an employee and the employer defines a job and each self-employed person has a job."

A job is conceptualised as a relationship between an employed person and employing enterprise, that is, between an employee and an employer or between a self-employed person (employee) and their own enterprise (employer). These jobs are often referred to in ABS statistics as ‘filled jobs’.

Jobs can also exist in the absence of an employed person, referred to in ABS statistics as a ‘vacant job’. Vacant jobs are positions which are available for immediate filling and for which recruitment action has been undertaken. For more information on vacant jobs, see the section: Job Vacancies.

Most jobs are performed by employed persons in return for some form of payment, whether it is in cash or in kind. As such, persons paid solely in kind, such as contributing family workers, are considered to have a job.

Not all jobs are paid, however, either in cash or in kind. People can be engaged in productive economic activity within an institutional unit for no apparent reward, in which case they are contributing to output but receiving no compensation. The 2008 SNA concept of a job includes these people as volunteer labour; however, they are excluded from the Australian System of National Accounts and also from Australian labour statistics (see the section: Institutional Units and the Economically Active Population).

A person can hold multiple jobs. For a person who is an employee of multiple employing enterprises, the SNA definition allows each agreement to be considered a separate job. The wording of the SNA is less clear in relation to self-employed persons, as it suggests that each self-employed person has only has one job. In practice, however, this is not the case. Many self-employed persons hold additional jobs, either in additional self-employment enterprises or with employing enterprises as employees. In ABS statistics, both employees and self-employed persons can have multiple jobs.

Every employed person has a job, however, because they can have multiple jobs, measures of employment and measures of jobs are conceptually different. It is important to distinguish between estimates of employment and estimates of jobs as conceptually different measures of labour. Household surveys typically estimate employment, such that they provide data on the number of people in the labour force (those who have jobs), not the number of jobs in the economy.

Estimates of employment from business surveys are typically measures of jobs. The employer is generally unable to provide information about their employees’ other jobs. Because ABS business surveys sample businesses and not employees, multiple job holders may be included in the sample multiple times.

Changes in the level of employment from month to month are sometimes referred to as an increase or decrease in the number of “jobs” (e.g. jobs created or lost). This is an incorrect inference, as estimates of “employment” from the LFS refer to counts of people rather than counts of jobs.

The distinction between jobs and employment is also important when considering full-time/part-time status. As full-time/part-time status relates to a person's employment (based on the total hours they work in all of their jobs), the number of full-time employed people (and changes in that number) does not equate to the number of full-time jobs in the labour market. A person in full-time employment can hold more than one job (for example, two part-time jobs for which the combined number of hours worked totals 35 hours or more per week), whereas a full-time job represents one person employed full-time.

A number of examples illustrate this:

• if an unemployed person became employed full-time (by starting one full-time job), then the full-time employment estimate from the LFS would increase by one (in a business survey, or a 'jobs' count, this would lead to an increase in the jobs estimate of one);
• if an unemployed person became employed full-time (by starting two part-time jobs with a total of 35 hours of work or more per week), then the full-time employment estimate from the LFS would increase by one (however, in a business survey, or a 'jobs' count, this would lead to an increase in the jobs estimate of two);
• if a person who was already employed in one part-time job took on another part-time job, this would have differing impacts on the employment estimates from the LFS depending on the total number of hours worked: if the sum of hours worked in the two part-time jobs was fewer than 35 hours per week, the employment estimates from the LFS would remain unchanged, but if the sum of hours worked was 35 hours or more, the employment estimates from the LFS would show a decrease of one in part-time employment and an increase of one in full-time employment (however, in both cases this would lead to an increase of one in the jobs estimate from a business survey);
• if a person who was employed in three part-time jobs (working a total of more than 35 hours per week) resigned from these and assumed one full-time job, this would have no impact on the employment estimates from the LFS (however, this would lead to a decrease of two in the jobs estimate - the number of part-time jobs would decrease by three while the number of full-time jobs would increase by one); and
• if a person employed in two part-time jobs became unemployed, the employment estimate from the LFS would decrease by one (however, this would lead to a decrease of two in the jobs estimate from a business survey).

Data from the Labour Force Survey (LFS) are used to provide regular estimates of employment; however, specific estimates of jobs are not produced. Up to June 2014, the LFS collected data on the number of multiple job holders, however did not collect the number of jobs they held. Estimates of jobs were created by weighting estimates of the number of multiple job holders from the LFS using estimates of the average number of jobs held by multiple job holders from the 2007 Survey of Employment Arrangements, Retirement and Superannuation. This method provided aggregate numbers of jobs but did not allow detailed disaggregation. For more information on this process, see Estimating Jobs in the Australian Labour Market’ in Labour Force, Australia, Feb 2013.

In July 2014, the ABS introduced a series of changes resulting from the Labour Household Surveys Content Review. These included for the first time the collection in the LFS of the actual number of jobs held by each multiple job holder each month. These new data allow the number of jobs to be more accurately estimated, as the number of jobs held by each multiple job holder is directly collected. This allows for further disaggregation of the statistics; however, because the LFS does not provide detail about the jobs separately (such as which industry they are in), this analysis is still limited.

For more information on the data content and methodology of the LFS, see the section: Labour Force Survey.

Estimates from this survey are produced according to the definitions outlined in the section: Job Vacancies. For more information on the data content and methodology of this survey, see the section: Job Vacancies Survey.

Estimates of employment are created from several business surveys. Because these surveys are unable to identify individual employees across multiple businesses, these are rather estimates of jobs. The key business surveys which provide data on jobs are listed below. For more information on the specific data content and methodology of these surveys, see the relevant sections:

• Economic Activity Survey;
• Quarterly Business Indicators Survey; and
• Survey of Employment and Earnings.

The Linked Employer-Employee Dataset (LEED) is compiled from administrative data using a census of tax records. Data on jobs from the LEED is published in Jobs in Australia (JIA). JIA provides statistics on jobs and job holders (employed persons) who are employees (including owner managers of incorporated enterprises – OMIEs) and owner managers of unincorporated enterprises (OMUEs).

In the LEED, a job is identified as a person’s work or business activity that creates an income, reported in a Pay as You Go payment summary (PAYG) or an Individual Tax Return (ITR) submitted to the Australian Taxation Office (ATO). Data on most employee jobs is sourced from the payment summary data, while the ITR is used to inform on jobs outside of the PAYG system, including those held by OMUEs.

Measures of jobs from this source differ from other estimates in several key ways. The reference period covers a 12 month period. As a result, a person may have several jobs through that year, either concurrently or consecutively with one or multiple employers and thus statistics differ from point-in-time estimates of filled jobs. Similarly, OMUE jobs are identified in the ITR as an aggregate for a whole reference year. While a person may own and manage more than one enterprise, only one self-employment job can be identified (although an OMUE can also hold other jobs as an employee).

The Australian Labour Account includes jobs as one of its four quadrants of labour, along with persons, volume, and payments, and sources data on jobs from a number of ABS household and business surveys.

The Australian Labour Account defines jobs as a set of production related tasks that can be assigned to and undertaken by a person, and for which they are usually, but not necessarily, remunerated either in money or in kind.

The Australian Labour Account includes all jobs created and maintained by institutional units resident in Australian economic territory, involving economic activity within the Australian application of the 2008 SNA production boundary. It includes both filled and vacant jobs, and distinguishes between main and secondary jobs. It classifies jobs according to the status in employment categories of the person filling the job, as well as a variety of job characteristics.

Weekly Payroll Jobs and Wages is compiled using Single Touch Payroll (STP) data from the Australia taxation Office. Weekly Payroll Jobs and Wages provides a near real-time index of the change in the number of jobs.

Measuring the levels and trends of hours worked for different groups of employed persons is important in order to monitor working and living conditions, as well as analysing economic cycles. Information on hours of work enables various analytical insights such as: classification of employed persons into full-time and part-time status; the identification of underemployed persons; and the creation of aggregate monthly hours worked estimates.

There are four concepts addressed in this section:

• Hours usually worked
• Hours actually worked
• Hours paid for
• Normal hours of work

Hours worked has been defined in terms of time when (paid) employees were at the disposal of an employer; that is, when available to receive work orders from an employer or person in authority, with hours worked covering all jobs.

International Labour Organisation (ILO)

During such periods of availability as defined by hours worked, workers are expected to be ready to work if work is possible, requested or necessary. This general concept is made meaningful for the self-employed if it is taken to mean time when the self-employed are available to do their work, such as being at the disposal of clients, ready to receive purchase orders or available to make sales, etc. Further information is available in the ILO Resolution concerning the measurement of working time (Eighteenth International Conference of Labour Statisticians, 2008).

Hours usually worked is the typical number of hours worked in a job for a short reference period (such as one week) that is representative of a longer reference period (e.g. a month, quarter, season or year).

United Nations Economic Commission Europe

Usual hours may differ from actual hours worked at a given time if employed persons are away from work due to illness, vacation, strike, a change of job or other reasons, or are at work for more hours than normal due to overtime, extra shifts, etc.

When analysing usual hours worked, consideration should be given to appreciate the different perceptions respondents may have when reporting the typical hours they work. The ILO guidelines say that "the typical value may be the modal (most frequently occurring) value of the distribution of hours actually worked per short period over the long observation period, where meaningful". However, it is also possible that respondents average their actual hours worked over a long reference period to derive a typical value for the shorter period.

Measures of hours usually worked (in all jobs) are available from: the Labour Force Survey (LFS) and LFS supplementary surveys, such as Participation, Job Search and Mobility (PJSM) and Characteristics of Employment (COE). Measures of usual hours of work are not available from ABS business surveys, and are not collected in the Census of Population and Housing.

Hours actually worked is the time spent in a job for the performance of activities that contribute to the production of goods and services during a specified short or long reference period.

International Labour Organisation

International resolutions relating to actual hours worked, adopted by the Eighteenth International Conference of Labour Statisticians (ICLS) in 2008, refer to wage and salaried employees. There are no international recommendations relating to actual hours worked for all categories of the employed population. However, the ILO in its manual 'Surveys of Economically Active Population, Employment, Unemployment and Underemployment' suggests that actual hours worked in a given job should be defined to cover all types of employment in labour force surveys. Hours actually worked is the time spent in a job for the performance of activities that contribute to the production of goods and services during a specified short or long reference period.

According to the ILO resolution, actual hours of work measured within the System of National Accounts production boundary includes all time spent directly on, and in relation to, productive activities, down time and resting time, such as:

• time spent in addition to hours worked during normal periods of work (including overtime);
• time spent at the place of work on activities such as the preparation of the workplace, repairs and maintenance, preparation and cleaning of tools, and the preparation of receipts, time sheets and reports;
• time spent at the place of work waiting or standing by due to machinery or process breakdown, accident, lack of supplies or power or internet access, etc.; and
• time corresponding to short rest periods (resting time) including tea and coffee breaks or prayer breaks.

Excluded are:

• hours paid for but not worked such as paid annual leave, public holidays or paid sick leave;
• meal breaks; and
• for paid employment, time spent on travel to and from work when no productive activity for the job is performed (even when paid by the employer).

The ILO suggests that for multiple job holders, actual hours worked should include the hours worked at all jobs.

ABS measures of actual hours of work are consistent with the international recommendations outlined above.

Measures of actual hours of work are available from a number of ABS household surveys: the LFS; various labour-related supplementary topics to the LFS; and various Special Social Surveys, including the Census of Population and Housing. Measures of actual hours of work are not available from ABS business surveys.

Monthly hours worked in all jobs is a measure of the total number of hours actually worked by employed persons in a calendar month. The methodology used to produce monthly hours worked in all jobs means that they are synthetic or modelled estimates.

Seasonally adjusted monthly hours worked in all jobs estimates are produced by combining two series.

The first series is the seasonally adjusted actual hours worked in the reference week, adjusted for holiday timing. These estimates provide an indication of movements across months.

The second series is an annual benchmark series containing original estimates of actual hours worked in each financial year. The annual actual hours worked original estimates are calculated by determining the actual hours worked for each week of the financial year. As actual hours worked are only collected in respect of the reference week of the LFS, actual hours worked for weeks not covered by the LFS are imputed based on the actual hours worked for the reference weeks in the adjacent months. Amongst other things, the imputation accounts for the effect of public holidays on hours worked; that is, it accounts for holidays that occur in the reference week of the LFS, as well as holidays that occur in weeks other than the reference week.

These two series are then combined to produce the seasonally adjusted monthly hours worked in all jobs series. A trend series is also subsequently produced. This approach ensures that:

• the level of the aggregate monthly hours worked (seasonally adjusted) series is consistent with the level of the annual benchmarks; and
• the movements in the series are consistent with the movements in the seasonally adjusted actual hours worked in the reference week series.

Hours paid for applies to a paid-employment job and to a self-employment job paid on the basis of time units. For a paid-employment job, hours paid for is the time for which payment has been received from the employer (at normal or premium rates, in cash or in kind) during a specified short or long reference period, regardless of whether the hours were actually worked or not. Hours paid for:

• includes time paid but not worked, such as paid annual leave, paid public holidays and certain absences such as paid sick leave; and
• excludes time worked but not paid by the employer, such as unpaid overtime, and absences that are not paid by the employer, such as unpaid educational leave or maternity leave that is paid through transfers by government from social security systems.
   

As such, hours paid for will differ from the number of hours actually worked if an employee works more or less hours than their paid hours. Hours paid for will also differ from usual hours in some cases, for example if an employee performs long hours in some weeks to have rostered days or weeks off.

Measures of hours paid for are collected from business payroll records in the ABS business survey of Employee Earnings and Hours (EEH). EEH also collects information on the following components:

• ordinary time hours paid for - defined as the award, standard or agreed hours of work paid for at the ordinary rate. Ordinary hours paid for include: stand-by or reporting time hours which are part of standard hours of work, and hours of paid annual leave, paid sick leave and long service leave taken during the reference period. Ordinary time hours paid for at penalty rates (e.g. for shift work) are not converted to their ordinary time equivalent; and
• overtime hours paid for - defined as hours paid for in excess of award, standard or agreed hours of work, at both standard and penalty rates.

Measures of average (mean) and median hours paid for and average hourly earnings are available from both EEH and COE.

Normal hours of work is defined in a 2008 ICLS resolution as "the hours fixed by or in pursuance of laws or regulations, collective agreements or arbitral awards to be performed in specified paid-employment jobs over a specified reference period, such as per day, week, month or year (within the System of National Accounts production boundary). Normal hours of work may also apply to a job in self-employment when the hours are in accordance with the hours fixed for all jobs in a specific industry or occupation (such as for drivers to ensure public safety)".

Measures of normal hours of work are not produced by the ABS. However, the concept is used to assist in allocating respondents in the full-time/part-time status classification in ABS business surveys.

The main source of hours worked data is the LFS. The list of hours worked data items from the LFS, and the publications they are contained in, are provided in Labour Force Survey Standard Products and Data Item Guide.

Hours worked data for specific populations are available in Participation, Job Search and Mobility, Australia.

The sole source of hours paid for from ABS household surveys is Characteristics of Employment, Australia.

Measures of total hours worked, over a quarter, are available from the Australian Labour Account. The Labour Account provides the best measure of hours worked across industries.

Measures of hours paid for are collected from business payroll records in Employee Earnings and Hours. This survey provides statistics on the composition and distribution of employee earnings, hours paid for and methods used to set employees' pay in Australia.

The Census of Population and Housing has data on the number of hours worked by an employed person in all jobs during the week prior to Census night. Hours worked data are generally published in ranges, but are also available for individual numbers of hours worked.

Unemployed people are defined as all those of working age who were not in employment, carried out activities to seek employment during a specified recent period and were currently available to take up employment given a job opportunity.

Nineteenth International Conference of Labour Statisticians (ICLS) 2013

'Not in employment' is assessed with respect to the short reference period for the measurement of employment. The purpose of the 'not in employment' criterion is to ensure that employment and unemployment are mutually exclusive. As precedence is given to employment, a person should only be classified as unemployed if they do not satisfy the criteria for employment. The not in employment criterion refers to a total lack of work, that is, not in paid employment or self-employment, as defined in international standards for employment. People who are 'without work' should not have undertaken any work at all (not even for one hour) during the reference period, nor should they have been temporarily absent from a job to which they have a formal attachment.

Seeking employment refers to any activity when carried out, during a specified recent period comprising the last four weeks or one month, for the purpose of finding a job or setting up a business or agricultural undertaking.

Nineteenth International Conference of Labour Statisticians (ICLS) 2013

According to the international guidelines seeking employment includes also part-time, informal, temporary, seasonal or casual employment, within the national territory or abroad. Examples of such activities are: "arranging for financial resources, applying for permits, licences; looking for land, premises, machinery, supplies, farming inputs; seeking the assistance of friends, relatives or other types of intermediaries; registering with or contacting public or private employment services; applying to employers directly, checking at worksites, farms, factory gates, markets or other assembly places; placing or answering newspaper or online job advertisements; placing or updating resumes on professional or social networking sites online, etc." (Nineteenth International Conference of Labour Statisticians (ICLS) 2013).

To ensure that unemployment serves as a measure of current labour market performance that can capture short-term changes in labour market absorption, a 'specified recent period' is used to capture activities to seek employment. It is intended to be interpreted as a longer period than the reference day or week, in order to account for the time-lags that often follow initial steps to seek employment, during which jobseekers may choose not to take any other steps to find employment.

The international guidelines note that to be considered undertaking an active job search, a person must have done something specific to obtain work before being classified as 'seeking work'. A general declaration of being in search of work is not sufficient.

The active job search criterion is waived for persons waiting to start a new job that they have already obtained and that is to begin after the end of the reference period (these persons are referred to as future starters). According to the international standards, future starters are defined as persons 'not in employment' and 'currently available' who did not 'seek employment', because they had already made arrangements to start a job within a short subsequent period, set according to the general length of waiting time for starting a new job in the national context but generally not greater than three months. The active search criterion is waived; having already secured employment, persons waiting to take up a job may not feel the need to look for work. The international guidelines consider that this group should be treated as unemployed rather than employed because, since they are available to start work, such persons would presumably have started work had the job begun earlier and, as such, this group forms part of currently underutilised labour resources.

The international guidelines recommend that countries develop classifications of persons not in the labour force, according to the relative strength of their attachment to the labour market. Persons with marginal attachment include those persons who are not in the labour force, who wanted to work but were not actively looking for work, and were available to start work within four weeks from the end of the reference period.

Persons without employment who are seeking employment should also be available for employment if they are to be considered as unemployed.

Nineteenth International Conference of Labour Statisticians (ICLS) 2013

In this context, availability for employment is a test of readiness to start a job in the present, assessed with respect to a short reference period comprising that used to measure employment: depending on national circumstances, the reference period may be extended to include a short subsequent period not exceeding two weeks in total, so as to ensure adequate coverage of unemployment situations among different population groups. The international standards recommend that a slightly longer reference period of measurement than the reference week would be better suited to capturing situations of unemployment among different population subgroups. Reasons for choosing a longer reference period include: the fact that not everyone who is seeking work can be expected to take up a job immediately when one is offered; and the fact that there are some forms of employment where workers are employed on a pay period basis and have to wait until a new pay period starts before taking up work.

The international guidelines recommend that countries develop classifications of persons not in the labour force according to the relative strength of their attachment to the labour market. Persons with marginal attachment include those persons who are not in the labour force, who wanted to work and had actively looked for work (in the four weeks up to the end of the survey reference week), but did not meet the availability criterion to be classified as unemployed.

The ABS produces estimates of unemployment from most household surveys. The LFS is designed to produce estimates of unemployment (and employment), and the definition used aligns closely with the international definitions outlined above. In other household surveys, where unemployment is an explanatory or classificatory variable, unemployment is less precise than that used in the LFS.

Unemployed people are defined as all persons aged 15 years and over who were not employed during the reference week, and:

• 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.

'Actively looked for work' includes: written, telephoned or applied to an employer; had an interview with an employer for work; answered an advertisement for a job; checked or registered with an employment agency; taken steps to purchase or start your own business; advertised or tendered for work; and contacted friends or relatives to find work.

People who only looked in newspapers or at job advertisements on the internet are seen as passively, rather than actively, looking for work and so are not considered unemployed. Similarly, just checking noticeboards is not considered an active job search step. These steps in isolation do not meet the active search criterion, as it is impossible to obtain work by looking at a job advertisement without some additional, active, job search step (for example, contacting the employer).

Future starters are those persons who were not employed during the reference week, were waiting to start a 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. As described above, under International Labour Organisation (ILO) guidelines, future starters do not have to be actively looking for work in order to be classified as unemployed. Until February 2004, the Labour Force Survey definition of unemployed only included the subset of future starters who had actively looked for work in the four weeks to the end of the reference week. Hence, the Labour Force Survey treatment of future starters was not fully consistent with the ILO standards, as the precondition of active job search was not waived meaning some future starters were defined as 'not in the labour force'.

From February 2004, future starters who had not actively looked for work are classified as unemployed in the Labour Force Survey, in line with ILO guidelines. Labour Force Survey estimates were revised back to April 2001 to reflect this change. This revision created a small trend break at April 2001 in unemployed persons and unemployment rate series. For further information on this change, see pages 11 and 12 of Information Paper: Forthcoming Changes to Labour Force Statistics, 2003 or Labour Force, Australia, Feb 2004.

Different reference periods apply for defining not employed, availability to start work, job search, and waiting to start a new job. The short, one week reference period ('reference week') is used in defining those 'not employed', and in determining their availability for work, in accordance with the international guidelines. For active job search, a longer (four week) period that includes the reference week is applied. For future starters, a period of four weeks is used for the waiting period beyond the reference week in which the job will commence.

To produce unemployment estimates, most other ABS household surveys use one of the two alternative questionnaire modules: the reduced questionnaire module (used for personal interviews); or the self-enumerated questionnaire module. As discussed above, unemployment is defined less precisely in these modules than in the LFS.

Most Special Social Surveys use the reduced questionnaire module for personal interviews. Unemployment in this module is defined as persons aged 15 years and over who were not employed during the reference week, had actively looked for work and were available to start work. Compared with estimates of unemployment from the LFS, the reduced questionnaire module for personal interviews results in lower estimates of unemployment. This arises from the simplified treatment of certain categories of persons:

• the reduced questionnaire module for personal interviews does not ask respondents about the reasons they did not actively look for work. Therefore, the reduced questionnaire module does not identify those 'future starters' who had not actively looked for. When the reduced questionnaire module is used, these 'future starters' are classified as not in the labour force rather than as unemployed; and
• in the LFS, persons on workers' compensation 'last week' and not returning (or who do not know if they will be returning) to 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.

The self-enumerated questionnaire module used in the Census of Population and Housing also produces different estimates of unemployment when compared to the LFS. Some differences result from the shortened set of questions, which cannot determine unemployment as precisely as the LFS. Other differences result from the self-enumeration nature of the questions and the inevitable differences in interpretation among respondents. As a result, estimates of unemployment from the self-enumerated questionnaire module are best used as explanatory or classificatory variables to explain other phenomena, rather than for detailed analysis of the labour force itself.

Unemployment estimates are available from:

• the Labour Force Survey (LFS)
• the Participation, Job Search and Mobility Survey (PJSM)
• Labour Account
• the Census of Population and Housing
• Special Social Surveys

The LFS is the official source of Australian employment and unemployment statistics. The definition of unemployment used in the LFS is outlined above. The LFS uses a comprehensive and detailed set of questions to precisely measure the numbers and selected characteristics of persons in employment and unemployment, as well as persons who are not currently economically active. Estimates from the LFS are available by State/Territory, Capital City/Rest of State, and for LFS regions.

The supplement to the LFS, the PJSM Survey, defines unemployment in the same way as the LFS, but excludes persons living in Aboriginal and Torres Strait Islander communities in very remote parts of Australia. The exclusion of these persons will have only a minor impact on any aggregate estimates that are produced for individual states and territories, except the Northern Territory where such persons account for around a quarter of the population.

The self-enumerated questionnaire module defines unemployment less precisely than the LFS, and the estimates produced are not strictly comparable with those from the LFS. For this reason, unemployment estimates from the Census should be used with caution in analyses where labour force activities are a major focus. When comparing estimates of unemployment from the Census of Population and Housing with those produced from the LFS, users should also note differences between the two surveys in scope (for example, the inclusion of permanent defence forces in Census employment data) and methodology.

As the reduced questionnaire module defines unemployment less precisely than the LFS, estimates produced are not strictly comparable with those from the LFS. When comparing estimates from the Special Social Surveys with those from the LFS, users should also note differences in scope and methodology across the collections.

Unlike most Special Social Surveys, the Survey of Employment Arrangements, Retirement and Superannuation, and the Survey of Employment and Unemployment Patterns, did not use the reduced questionnaire module to produce measures of unemployment as described above. Instead, these surveys used the full set of questions asked in the LFS.

The unemployment rate for any group is defined as the number of unemployed persons expressed as a percentage of the labour force (employed plus unemployed). As one measure of the proportion of the labour force that is underutilised, an important use is as an indicator of the performance of the economy. A high rate of unemployment indicates limited employment opportunities in a labour market that is oversupplied. A low rate of unemployment indicates a tight labour market, a potential scarcity of skilled labour, and future cost pressures from wage demands from workers.

The trend over time in the overall unemployment rate serves as an indicator of the performance of the economy, while the unemployment rate for different groups of persons (e.g. younger persons, older persons, and women) identifies areas of social concern when rates for some groups are much higher than for others.

Conceptually, duration of job search is the period of time during which an person who is currently unemployed has been in a continuous state of unemployment. To measure this period accurately would require that all three criteria for defining an unemployed person be satisfied continuously and simultaneously over the whole period (i.e. without paid work, actively looking for work and available to commence work). However, it is impractical to apply all three criteria to past periods in a household survey because of the lengthy and complex questioning needed to test for the criteria, and the memory recall difficulties of respondents. For this reason, in practice the measurement of duration of unemployment focuses on the period of time that a person has been without paid work, and/or has been looking for work.

Duration of job search measures the elapsed number of weeks to the end of the reference week since a currently unemployed person began looking for work, or since that person last worked, whichever is the shorter. For persons who began looking for work while still employed, it is the period from the time the person last worked to the end of the reference week.

Within unemployment, it is possible to identify persons who are in long-term unemployment, defined as having duration of unemployment of 12 months or more. The number of unemployed people is an important social and economic indicator. The length of time that currently unemployed people have been looking for work or since they last worked (previously referred to as duration of unemployment) is also important from both an economic and social perspective. Long-term unemployment (i.e. where duration of job search is 52 weeks or more) is of particular social concern due to the consequences of being out of work for long periods, such as financial hardship and the loss of relevant skills. From an economic perspective, the longer people are unemployed the less likely they are going to be able to contribute to the economy.

Since its inception in 1960, the ABS Labour Force Survey (LFS) has collected information about duration of unemployment for unemployed persons. The survey collects data each month about the length, in completed weeks, of current (incomplete) spells of looking for work and/or time since last job from those who are currently unemployed.

Duration of unemployment refers to the amount of time that an unemployed person has not been employed. Over an extended period an unemployed person may have changes in their availability or active job search behaviour, with a spell or multiple spells of being not in the labour force.

The definition used by the ABS aligns with international standards (19th ICLS resolution (2013) concerning statistics of work, employment and labour underutilisation).

In a broad sense, labour underutilisation encapsulates the extent to which people's desire for work is not being met. It covers people who are not working but want to work, and those who are working but want to work more. A measure of underemployment supplements other measures of underutilisation of labour, such as the number of unemployed people and the number of marginally attached discouraged jobseekers, to inform the community about the performance of the labour market. In conceptual terms, underemployment, unemployment and marginal attachment to the labour force all measure different aspects of labour underutilisation. In isolation these measures provide important contextual information about the degree to which labour is being underutilised.

Underutilisation measures provide more comprehensive information on the state of the labour market, and measures the extent to which all available labour force resources are not being fully used in the economy.

The need to produce broader measures of underutilisation reflects the need to provide more comprehensive information than merely the unemployment rate¹. The unemployment rate is often one of the most cited indicators of underutilisation within the labour market. However, the standard definition used to define unemployment is necessarily quite restrictive. Consequently, the unemployment rate gives a relatively narrow view of the degree to which labour is being underutilised in the labour market. The production of broader measures of underutilisation is intended to provide a more comprehensive view of the labour market.

While these specific measures provide important information about labour underutilisation, individually they are narrow and in isolation do not provide a comprehensive picture of the degree to which labour is being underutilised in the labour market as a whole. By bringing various measures together, a broader picture of the degree to which labour is being underutilised can be obtained.

The labour force underutilisation rate and the extended labour force underutilisation rate are both aggregate measures that provide a broader picture of labour underutilisation.

Underemployment is defined by the International Labour Organization (ILO) as the underutilisation of the productive capacity of the employed population.

It describes a situation where the potential labour of employed people is not fully utilised. Along with unemployment, it is an important indicator of unused capacity given current labour market conditions.

Two related concepts are recognised in the current international standards when measuring underemployment: time-related underemployment, which reflects insufficient hours of work in relation to an alternative employment situation that a person is willing and available to engage in; and inadequate employment situations, which refers to all those in employment who want to change their work activities and/or work environment for a set of reasons chosen according to national circumstances. Such reasons might include: insufficient use and mismatch of skills and experience; inadequate income; and excessive hours of work. Employed persons may be simultaneously in time-related underemployment and inadequate employment situations.

Previous international standards on underemployment identified two concepts of underemployment: one reflecting an insufficient volume of work, referred to as visible underemployment; and one reflecting an insufficient use of skills and experience or low productivity, termed invisible underemployment. Visible underemployment is closely related to time-related underemployment, while invisible underemployment, as it was previously defined, is now one component of inadequate employment situations.

According to the international standard, time-related underemployment exists when the hours of work of an employed person are below a threshold, and are insufficient in relation to an alternative employment situation in which the person is willing and available to engage (Nineteenth International Conference of Labour Statisticians 2013). The table below sets out the international definition for time-related underemployment.

The concepts underpinning the international definition of time-related underemployment are shown in the framework below. The framework classifies persons who satisfy each of the criteria outlined above - willingness to work additional hours (note that persons actively seeking additional hours of work are distinguished from those who are not); availability to work additional hours; and worked less than a threshold relating to working time - as time-related underemployed.

Among persons in time-related underemployment, depending on the working time concept applied (i.e. who wanted and were “available” to work “additional hours”), it is possible to identify the following groups:

• persons whose hours usually and actually worked were below the “hours threshold”;
• persons whose hours usually worked were below the “hours threshold”, but whose hours actually worked were above the threshold; and
• persons “not at work”, or whose hours actually worked were below the “hours threshold” due to economic reasons (e.g. a reduction in economic activity, including temporary lay-off and slack work, or the effect of the low or off season).

The current international standard (ICLS 2013) also notes that countries should include, as part of a broad set of statistical indicators, the following in relation to underutilised labour:

• the rate of volume of time-related underemployment;
• activities to “seek employment” by persons in employment, indicating pressure on the labour market;
• inadequate employment situations due to skills, income or excessive working time, according to the relevant international statistical standards;
• slack work among the self-employed; and
• gross labour market flows between labour force statuses and within employment.

Labour underutilisation measures can be divided into two broad types of measurements: headcount measures and volume measures. Headcount measures of labour underutilisation are based on the number of persons who are underemployed, unemployed or marginally attached to the labour force. Volume underutilisation measures relate to the number of potential hours of labour that are not utilised. Whether persons are unemployed or underemployed, not all persons who are in search of work (or more work) are seeking the same number of hours of work. For this reason, volume measures of underutilisation are often more relevant for analysing the spare capacity of the labour force than headcount measures. The various labour underutilisation measures that the ABS produces are discussed below.

Measures of unemployment provide important information on the supply of labour that is immediately available from persons who are currently not employed. The ABS produces both headcount and volume measures of unemployment. The unemployment rate is the number of persons that are unemployed, expressed as a percentage of the labour force. The volume unemployment rate is the hours of labour sought by unemployed persons, expressed as a percentage of the potential hours in the labour force. Total potential hours in the labour force is comprised of the number of hours sought by the unemployed, the number of additional hours sought by the underemployed, and the number of hours usually worked by all employed persons.

Measures of underemployment provide important information on the degree to which labour is being underutilised in the employed population of the labour market. The ABS produces both headcount (by population) and volume (hours based) measures of underemployment. The underemployment rate is the number of underemployed workers, expressed as a percentage of the labour force. The volume underemployment rate is the additional hours of labour preferred by underemployed workers, expressed as a percentage of the potential hours in the labour force.

Underemployed workers are employed people who would prefer, and are available for, more hours of work than they currently have. They comprise:

• part-time workers who would prefer to work more hours and were available to start work with more hours, either in the reference week or in the four weeks subsequent to the survey; and
• full-time workers who worked part-time hours in the reference week for economic reasons (such as being stood down or insufficient work being available). It is assumed that these people would prefer to work full-time in the reference week and would have been available to do so.

For practical reasons, ABS measurement of underemployment is confined to time-related underemployment. The ABS underemployment framework is based on separating employed persons into two mutually exclusive groups:

• workers who are considered to be fully employed; and
• workers who are not fully employed.

Fully employed workers comprise:

• employed persons who worked full-time during the reference week (including persons who usually work part-time);
• employed persons who usually work full-time, but worked part-time in the reference week for non-economic reasons (including illness or injury, leave, holiday or flex time, and personal reasons); and
• part-time workers (who usually work part-time and did so in the reference week) who do not want to work additional hours.

Full-time workers who worked part-time in the reference week for non-economic reasons are considered to be fully employed because they usually work full-time, and worked part-time in the reference week voluntarily.

Persons who are not fully employed comprise:

• part-time workers (who usually work part-time and did so in the reference week) who want to work more hours; and
• full-time workers who worked part-time in the reference week for economic reasons (such as being stood down or insufficient work being available).

Time-related underemployed workers (as defined in the ILO guidelines) are a subgroup of persons 'not fully employed'.

The ABS underemployment framework further classifies persons who are not fully employed according to whether they were looking for and/or available to start work with more hours and according to the number of additional hours sought. The framework further defines workers who are underemployed, comprising:

• part-time workers who would prefer to work more hours and were available to start work with more hours, either in the reference week or in the four weeks following the survey; and
• full-time workers who worked part-time hours in the reference week for economic reasons (such as being stood down or insufficient work being available).

As a result of the implementation of the Outcomes of the Labour Household Surveys Content Review, 2012 (cat. no. 6107), the ABS also publishes an analytical series which expands the scope of headline underemployment measures to include all employed persons.

Headline measures of underemployment include those persons who are employed part-time who are wanting, and available, to work more hours. The expanded analytical underemployment series includes all employed persons who want, and are available, to work more hours, and all employed persons whose actual hours were fewer than usual hours for economic reasons.

The following additional groups are therefore included in the expanded analytical measures of underemployment:

• full-time workers who would prefer to work more hours and were available to start work with more hours, either in the reference week or in the four weeks following the survey;
• full-time workers who still worked full-time hours in the reference week, but worked less than their usual full-time hours for economic reasons (such as being stood down or insufficient work being available); and
• part-time workers who worked less than their usual part-time hours during the reference week for economic reasons.

The ABS framework for the expanded analytical underemployment series is shown below.

The labour force underutilisation rate is defined as the sum of the number of persons unemployed and underemployed, expressed as a percentage of the labour force.

The labour force underutilisation rate is an aggregate measure of underutilisation. It can also be viewed as the sum of the unemployment rate and the underemployment rate.

The labour force underutilisation rate is also expressed as a volume measure in the volume labour force underutilisation rate. The volume labour force underutilisation rate is expressed as the total volume of underutilised labour in the labour force (hours sought by unemployed persons, plus additional hours preferred by underemployed persons), as a percentage of the potential hours in the labour force.

The extended labour force underutilisation rate is expressed as the sum of the unemployed, the expanded analytical measures of underemployment and two marginally attached groups, as a proportion of the augmented labour force (including the number of people in three marginally attached groups.

The extended labour force underutilisation rate is the broadest measure of underutilisation the ABS currently produces, and takes the measure of underutilised labour beyond what is conventionally measured in the labour force. The measure includes, in addition to the unemployed and the expanded measures of underemployed, two groups of persons with marginal attachment to the labour force:

• persons actively looking for work, who were not available to start work in the reference week, but were available to start work within four weeks, and
• discouraged job seekers, defined as persons who want to work and could start work within four weeks if offered a job, but who have given up looking for work for reasons associated with the labour market.

When measuring the extended underutilisation rate as a proportion, the extended measure of the total labour force is augmented by the two marginally attached groups above plus a third group – persons who had a job to go to. This marginally attached group covers all people who were attached to a job, but were not classed as either employed or unemployed, including:

• persons who had accepted a job offer but had not yet started working. These people are similar to unemployed future starters, however they were not classed as unemployed, because either they were not starting their job within the following four weeks, or they were not available to start in the reference week, had been available.
• persons who were on workers compensation or on leave from their jobs without pay and were planning to return to work at a later date in the future. This includes people who were available to return in the following four weeks and also people who weren’t available until four weeks or later.

The population with marginal attachment to the labour force is a relatively large and heterogeneous group. It includes persons who may have a strong likelihood of joining the labour force in the near future, as well as some who have little or no commitment to finding employment. The ABS does provide statistics about this large and diverse group, but does not include the whole group in its broadest supplementary measure of labour underutilisation. There may be other subgroups (in addition to the two marginally attached groups identified above) which fit the requirements of underutilised labour resources.

The ABS underemployment framework is consistent with the ILO concept of time-related underemployment, although the international standards do not specifically identify the group 'fully employed workers' as is the case in the ABS framework.

The international definition of time-related underemployment includes a threshold relating to working time. Only persons actually working less than the threshold are included in statistics of time-related underemployment. The international standards do not specify the threshold to be used. Instead they suggest a number of alternative approaches which may be suitable.

The threshold used in the current ABS underemployment framework is based on the boundary between full-time and part-time work. Only those employed persons actually working less than 35 hours in the reference week may be further classified as not fully employed. Persons actually working less than 35 hours in the reference week include part-time workers (persons who usually work part-time and did so in the reference week), as well as some full-time workers who actually worked part-time hours in the reference week for non-economic reasons.

Only full-time workers who worked part-time in the reference week for economic reasons are classified as not fully employed in the current ABS framework. Those who worked part-time in the reference week for non-economic reasons are assumed to be fully employed, on the basis that they usually work full-time, and that they 'voluntarily' worked part-time in the reference week.

In the case of the expanded analytical measures of underemployment, the threshold used to determine underemployment is usual hours. This threshold is variable and specific to each individual based on their usual working patterns. The variable threshold broadens the measure to encompass more circumstances of time-related underemployment.

In the ABS framework, willingness to work additional hours is tested by asking part-time workers whether they want to work additional hours. Starting from the July 2014 reference month, all employees are asked whether they want to work additional hours. This additional information allows for the production of the expanded analytical underemployment series.

In the ABS framework, availability to work additional hours is determined both in terms of immediate availability (i.e. available in the reference week), and availability within the following four weeks. The international guidelines are not prescriptive on this issue.

The ABS previously produced annual volume measures of underemployment and underutilisation. Volume measures relate to the quantum of unused potential hours of labour, and were previously compiled using information collected in the Job Search Experience Survey, the Underemployed Workers Survey and the Labour Force Survey (LFS). They are often more relevant for analysing the spare capacity of the labour force than the usual 'headcount' measures, as they take into account the number of hours sought and additional hours preferred by individuals.

Starting from the July 2014 reference month of the LFS, the ABS increased the frequency of the volume measures of labour underutilisation from an annual to a quarterly basis, estimated directly from LFS data. These data were made available from November 2015. For more information, see Information Paper: Forthcoming Changes to Labour Force Statistics, Oct 2014.

Estimates of labour unemployment, underemployment and underutilisation are available monthly from Labour Force, Australia: 

• underemployment (headcount);
• unemployment (headcount);
• unemployment rate; and
• underutilisation rate.

Estimates of persons not fully employed are available from:

• the Labour Force Survey (LFS); and
• the supplement to the LFS, the Participation, Job Search and Mobility (PJSM) Survey.

The LFS collects information on underemployment on a monthly basis. The survey classifies workers according to the framework outlined above:

• part-time workers who would prefer to work more hours and were available to start work with more hours, either in the reference week or in the four weeks following the survey; and
• full-time workers who worked part-time hours in the reference week for economic reasons.

Based on the new survey starting with the July 2014 reference month, the ABS increased the reporting frequency of the underemployment rate and labour force underutilisation rate from a quarterly to a monthly basis. The underemployment and underutilisation information was integrated into LFS output, together with unemployment information, from November 2015. For more information, see Labour Force, Australia, Nov 2015 and Information Paper: Forthcoming Changes to Labour Force Statistics, Oct 2014.

In addition to monthly headcount underemployment and underutilisation measures, the ABS produces volume measures of underemployment and underutilisation on a quarterly basis.

For more information on the content and methodology of the LFS, see the section : Labour Force Survey.

The annual LFS supplementary topic, PJSM, is the primary ABS data source on underemployment. The survey classifies workers according to the framework outlined above, comparable with ICLS 2013 and the LFS quarterly measure, but with a much wider range of information: for example, on the, steps taken to find work, and difficulties finding work. For more information on the content and methodology of this survey, see the relevant section: Participation, Job Search and Mobility.

The population not in the labour force (that is, not currently economically active) comprises all persons not currently employed or unemployed, irrespective of age.

Thirteenth International Conference of Labour Statisticians 1982

Theoretically, then, persons not in the labour force include those below the age specified for measuring the economically active population. The international standards recognise that, for analytical purposes, the economically active population may be related to the total population to derive a crude participation rate or, more appropriately, to the population above the age prescribed for the measurement of the economically active population. In practice, many countries restrict the population scope of household surveys, and provide separately sourced estimates for those below the age limit when a total population estimate or a crude participation rate is required (e.g. for international reporting).

In the international guidelines (Nineteenth International Conference of Labour Statisticians 2013), the national system of work statistics will cover the work activities of the population in all age groups. To service different policy concerns, separate statistics are needed for the working age population.

To determine the working age population:

• the lower age limit should be set taking into consideration the minimum age for employment and exceptions specified in national laws or regulations, or the age of completion of compulsory schooling; and
• no upper age limit should be set, so as to permit comprehensive coverage of work activities of the adult population and to examine transitions between employment and retirement.

Not all persons who are classified as not in the labour force are voluntarily economically inactive; some want to work but are classified as not in the labour force because they do not satisfy the criteria for unemployment (active job search and availability to start work - see the section: Unemployment).

The international guidelines (Thirteenth International Conference of Labour Statisticians 1982) recommend that persons not in the labour force may be classified by reasons for inactivity, which are listed as:

• attendance at educational institutions;
• engagement in household duties;
• retirement or old age; and
• other reasons such as infirmity or disablement.

The international guidelines (Thirteenth International Conference of Labour Statisticians 1982) suggest that, where the standard definition of employment is used, countries develop classifications of persons not in the labour force according to the relative strength of attachment to the labour market. The International Labour Organisation, in its manual Surveys of Economically Active Population, Employment, Unemployment and Underemployment, states that persons marginally attached to the labour force are those not economically active under the standard definitions of employment and unemployment, but who, following a change in one of the standard definitions (of employment or unemployment, such as active job search or availability to start a job), would be reclassified as economically active.

In the international guidelines (Nineteenth International Conference of Labour Statisticians 2013), the potential labour force is defined as all persons of working age who, during the short reference period, were neither in employment nor in unemployment and:

• carried out activities to seek employment, were not currently available but would become available within a short subsequent period established in the light of national circumstances (unavailable jobseekers); or
• did not carry out activities to seek employment, but want employment and were currently available (available potential jobseekers).

The guidelines recognise that, though not precise in concept (nor defined in the international guidelines), the term 'discouraged workers' generally refers to persons who want a job and are currently available for work, but have given up any active job search because they believe they cannot find a job.

In the international guidelines (Nineteenth International Conference of Labour Statisticians 2013), there are those who are currently available for work who did not seek employment for the following labour market-related reasons:

• personal reasons (own illness, disability, studies);
• family-related reasons (pregnancy, presence of small children, refusal by family);
• lack of transport;
• other sources of income (pensions, rents); and
• social exclusion.

The guidelines (Nineteenth International Conference of Labour Statisticians 2013) state that willing non-jobseekers are defined as persons not in employment who wanted employment, but did not seek employment and were not currently available. This group have an expressed interest in employment not included within the potential labour force, but relevant for social and gender analysis.

The ABS produces estimates of persons not in the labour force in a number of household surveys. The definition used is consistent with the concepts outlined above except for persons aged less than 15 years, who are generally excluded from ABS measures of labour force status. Persons not in the labour force are therefore generally defined in ABS household collections as 'persons aged 15 years and over who are neither employed nor unemployed'. Examples of those not in the labour force includes persons who are:

• retired or voluntarily inactive;
• performing home duties or caring for children;
• attending an educational institution;
• experiencing a long-term health condition or disability;
• experiencing a short-term illness or injury;
• looking after an ill or disabled person;
• on a travel, holiday or leisure activity;
• working in an unpaid voluntary job;
• in institutions (hospitals, jails, sanatoriums, etc.);
• permanently unable to work; and
• members of contemplative religious orders.

Estimates of persons not in the labour force vary across different household surveys because of differences in the definitions of employment and unemployment used in these surveys, and the respective scope of these surveys. As discussed in preceding sections, the Labour Force Survey (LFS) is designed to produce precise estimates of employment, unemployment and persons not in the labour force, and definitions used align closely with international standards. In other household surveys, it is generally not practical to define employment and unemployment as precisely as in the LFS. Two alternative questionnaire modules are used to collect measures of labour force status (i.e. employment, unemployment and persons not in the labour force) in these surveys: the reduced questionnaire module (for use in personal interview), and the self-enumerated questionnaire module.

Estimates of persons not in the labour force produced from the reduced questionnaire module (used in most Special Social Surveys) are higher than those produced from the LFS. This is due to differences in the treatment of certain categories of persons:

• the reduced questionnaire module for personal interviews does not ask respondents about the reasons they did not actively look for work. Therefore, the reduced questionnaire module does not identify 'future starters'. Future starters are persons who were not employed during the reference week, were waiting to start a 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. Using the reduced questionnaire module, such persons are classified as not in the labour force rather than as unemployed, and
• in the LFS, persons on workers' compensation 'last' week and not returning or 'don't know if returning' to work, and persons away from work for four weeks or more without pay, are classified as either unemployed or not in the labour force. Using the reduced questionnaire module, all persons absent from work, but who usually work one hour or more a week, are classified as employed.

The self-enumerated questionnaire module (used in the Census of Population and Housing) also produces different estimates of persons not in the labour force when compared to the LFS. Some differences result from the shortened set of questions, which cannot determine labour force status as precisely as the LFS. Other differences result from the self-enumeration nature of the questions, and the inevitable differences in interpretation across respondents. As a result, estimates of persons not in the labour force from the self-enumerated questionnaire module are best used as explanatory or classificatory variables to explain other phenomena, rather than for detailed analysis of the labour force itself.

Measures of persons marginally attached to the labour force and discouraged job seekers are collected by the ABS annually in a supplementary survey to the LFS, the Participation, Job Search and Mobility Survey. Definitions used in this survey are outlined below.

Persons with marginal attachment to the labour force comprise those persons who are not in the labour force, and:

• wanted to work, are actively looking for work, but are not available to start work in the reference week; or
• are not actively looking for work, but wanted to work and are available to start work within four weeks; or
• are attached to a job, but are not currently working (either they have accepted a job offer but have not yet started work, are away from work on workers compensation, or are away from work without pay for four weeks or more).

This definition is consistent with that suggested by the international guidelines, and involves relaxing the criteria used to determine employed or unemployment in the LFS as follows:

• persons meeting the first set of criteria above (wanting to work, actively looking for work, not available to start work) would have been classified as unemployed if the unemployment criterion 'currently available for work' had been waived; and
• persons meeting the second set of criteria above (wanting to work, not actively looking for work, available to start within four weeks) would have been classified as unemployed if the unemployment criterion 'active job search' had been waived and the criterion 'currently available for work' had been relaxed to include the next four weeks. The circumstances that would permit people to start a job are likely to differ between persons in the labour force and those not in the labour force. Accordingly, a reference period of four weeks for the availability criterion is adopted, rather than current availability, as for the unemployed.
• persons meeting the third set of criteria (attached to a job but not currently working) would be classified as employed if they started or returned to work for at least 1 hour or more.

Discouraged job seekers are defined as persons with marginal attachment to the labour force who want to work and could start work within four weeks if offered a job, but who have given up looking for work for reasons associated with the labour market. This group includes persons who believe they would not find a job for any of the following reasons:

• considered to be too young or too old by employers;
• believes ill health or disability discourages employers;
• lacked necessary schooling, training, skills or experience;
• difficulties because of language or ethnic background;
• no jobs in their locality or line of work;
• no jobs in suitable hours; or
• no jobs available at all.

This definition of discouraged job seekers is consistent with the definition of discouraged workers outlined in international guidelines.

The diagram illustrates the concepts of not in the labour force, unemployed, marginally attached, and discouraged job seekers, as measured in the Participation, Job Search and Mobility (PJSM) Survey.

Estimates of persons not in the labour force are available from:

• the Labour Force Survey (LFS);
• the Participation, Job Search and Mobility Survey (PJSM);
• the Census of Population and Housing; and
• Special Social Surveys.

The LFS is the official source for Australian employment and unemployment statistics and defines persons not in the labour force according to the definitions outlined above, using the full questionnaire module. Persons not in the labour force are further classified as:

• looking for work (i.e. either undertook active job search and were not available to commence work, or undertook only passive job search);
• not looking for work;
• permanently unable to work; and
• in institutions.

Estimates of reason for inactivity, marginal attachment and discouraged job seekers are impractical to collect in the LFS, because of cost, time and respondent burden. These topics are therefore measured in an annual supplement to the LFS, as noted below. Notwithstanding this, monthly estimates of the number of marginally attached persons who had actively looked for work, were not available to start work in the reference week, but were available to start within four weeks, are available from the LFS. For more details on the content and methodology of the LFS, refer to the section: Labour Force Survey.

The supplement to the LFS, the PJSM Survey, is the main source of detailed information on persons not in the labour force. Persons not in the labour force are defined as for the LFS, but exclude persons living in Aboriginal and Torres Strait Islander communities. The exclusion of these persons will have only a minor impact on any aggregate estimates that are produced for individual states and territories, except the Northern Territory where such persons account for around a quarter of the population. In addition, the supplementary surveys exclude institutionalised persons, and this group of persons represents approximately 4% of persons not in the labour force. The survey produces estimates of persons marginally attached to the labour force, of discouraged job seekers, and of persons not in the labour force classified by reasons for inactivity. The definitions for marginal attachment and discouraged job seekers used in the survey are discussed above. For further information on the content and methodology of the survey, refer to the section: Participation, Job Search and Mobility.

The Census of Population and Housing uses the self-enumerated questionnaire module and defines persons not in the labour force as 'persons aged 15 years and over who, during the week before census night, were neither employed nor unemployed'. As discussed previously, the self-enumerated questionnaire uses a limited set of questions to collect labour force status and measures persons not in the labour force more broadly than collections using the full questionnaire modules. The LFS and its supplementary topic PJSM both use the full questionnaire. When comparing estimates from the Census with those from the LFS, or the PJSM Survey, users should also note differences in scope and methodologies across the collections. See the section: Census of Population and Housing for more information.

The Special Social Surveys generally use the reduced questionnaire module and define persons not in the labour force as 'persons who were neither employed nor unemployed during the reference period'. Estimates are generally only produced for persons (in scope of the survey) aged 15 years and over. As discussed previously, the reduced questionnaire module uses a limited set of questions to determine labour force status, and measures 'not in the labour force' less precisely than collections using the full questionnaire modules, including the LFS and its supplementary topic PJSM. When comparing estimates from the Special Social Surveys with the LFS, or with PJSM, users should also note differences in scope and methodologies across the collections.

Job vacancies are an indicator of unmet labour demand, and complement indicators of underutilised labour supply such as unemployment and underemployment. Job vacancy data are used by Commonwealth and State government departments, employer associations and trade unions as a leading economic indicator and for econometric forecasting.

"A 'vacant post' can be said to exist if an employer before or during the reference period has taken concrete steps to find a suitable person to carry out a specific set of tasks and would have taken on (entered into a job contract with) such a person if she/he had been available during the reference period".

International Labour Organisation, 15th ICLS, 1993

There are currently no international recommendations or guidelines relating to job vacancies statistics. The concept of vacant post was discussed in the general report to the Fifteenth International Conference of Labour Statisticians 1993, where the above definition was put forward.

Job vacancies statistics are collected in the Australian Bureau of Statistics (ABS) Job Vacancies Survey (JVS). The ABS defines job vacancies in the JVS as employee jobs available for immediate filling on the actual survey reference day and for which employers have undertaken recruitment action. Recruitment action includes efforts to fill vacancies by advertising, by on site or online notices, by notifying employment agencies or trade unions and by contacting, interviewing or selecting applicants already registered with the enterprise or organisation.

Measures of job vacancies exclude:

• jobs not available for immediate filling on the survey reference day;
• jobs for which no recruitment action has been taken;
• jobs which became vacant on the survey reference day and were filled on the same day;
• jobs of less than one day's duration;
• jobs only available to be filled by internal applicants within an organisation;
• jobs to be filled by employees returning from paid or unpaid leave, or after industrial disputes;
• vacancies for work to be carried out by contractors; and
• jobs for which a person has been appointed but has not yet commenced duty.

Data on job vacancies are available from the ABS, while data on the number of job advertisements are available from a number of other sources including the private sector. Job vacancies should not be confused with job advertisements. Job vacancies data may differ from data on the number of job advertisements for a number of reasons, including the multiple advertising of a single vacancy.

Estimates of job vacancies and job advertisements are available from:

• the ABS Job Vacancies Survey
• the Australian and New Zealand Banking Group (ANZ) Job Advertisement Series
• the SEEK Employment Index Report
• the National Skills Commissions Vacancy Report

Estimates from this survey are produced according to the definitions outlined above. For more information on the data content and methodology of this survey see the Job Vacancies, Australia methodology.

The ANZ produces a series of job advertisements based on counts of internet advertisements on selected employment internet sites. Readers should refer to the ANZ Job Advertisement Series for more detail on the content and methodology of these series.

Counts of job advertisements can differ from counts of job vacancies for several reasons, including the multiple advertising of a single job. Further, recruitment through word of mouth, on site notices, etc., are included in JVS but are out of scope for the ANZ Job Advertisements Series.

SEEK produces a monthly New Job Ads Index, which measures the number of new job ads posted on their website in a particular month. The series is adjusted to ensure that multiple postings count as one ad. The index is available in both original and seasonally adjusted terms. Readers should refer to the SEEK Employment Index report for more detail on the content and methodology of these series.

The National Skills Commission Vacancy Report produces four series:

• the Internet Vacancy Index (IVI), based on a count of newly lodged online vacancies on selected employment internet sites (from secondary sources);
• the Skilled IVI, based on counts of internet advertisements for skilled vacancies (the aggregation of Australian and New Zealand Standard Classification of Occupations (ANZSCO) categories Professionals, and Technicians and Trade Workers);
• the Regional IVI, which provides indices for more detailed geographic areas; and
• the Detailed Occupational IVI, which provides indices for occupations based on the Australian and New Zealand Standard Classification of Occupations (ANZSCO).

The National Skills Commission codes internet advertisements to occupation at the ANZSCO four digit level for Australia. See the National Skills Commission Vacancy Report for more detail on the content and methodology of these series.

Statistics of employee remuneration are required for the planning, evaluation and monitoring of economic and social development. Demand for these statistics comes from governments, social and labour market analysts, industrial tribunals, trade unions, employer associations, academics and international agencies.

Comprehensive statistics on remuneration, classified by sex, occupation, skill, industry etc., are in demand because of the role they play in the evaluation of social welfare, taxation, monetary, wage fixation, inflation and prices policies; investment decisions; studies of corporate and international competitiveness; and measurement of living standards.

In recognition of the variety of needs for data in this area, the 12th International Conference of Labour Statisticians (ICLS) in 1973 recommended that countries collect a range of interrelated wages statistics to meet users' differing needs. More information on wages statistics can also be found in An integrated system of wages statistics.

The ABS produces a range of statistics relating to the remuneration of employees in return for work done. These statistics have been developed to meet the various needs of users for information on the returns to labour from economic production, the contribution of employee income to total household income, and the level and distribution of weekly earnings.

The remuneration paid to employees for their work is of interest from both social and economic perspectives, in terms of the income received by employees and the cost of labour for employers. The measures produced include compensation of employees in the quarterly national accounts, employee income in income distribution statistics, average weekly earnings series and the Wage Price Indexes.

The first section of this chapter outlines international concepts of labour costs, compensation of employees, earnings, and household (and employee) income. The rest of this chapter outlines the definitions associated with various ABS statistics of employee remuneration; measures and classifications associated with these statistics; and sources of Australian statistics, including non-ABS series.

International standards and guidelines provide the broad principles behind ABS statistics of employee remuneration, ensuring comparability with those of other countries that use the standards. However, the international standards are very general, and need to be interpreted in the context of each country's own situation.

This section outlines the international guidelines in the four main areas of interest, namely:

• costs incurred by employers as a consequence of employing labour;
• the compilation of the national accounting aggregate compensation of employees;
• the measurement of earnings received by employees in exchange for their labour; and
• the measurement of household and employee income.

Labour costs are defined as:
"...remuneration for work performed, payments in respect of time paid for but not worked, bonuses and gratuities, the cost of food, drink and other payments in kind, cost of workers' housing borne by employers, employers' social security expenditures, cost to the employer for vocational training, welfare services and miscellaneous items, such as transport of workers, work clothes and recruitment together with taxes..."

International Labour Organisation, 11th ICLS, 1966

The statistical measure of labour costs is based on the concept of labour as a cost to the employer in the employment of labour, and relates to: all cash and in-kind payments of wage and salaries to employees; all contributions by employers in respect of their employees to social security, private pension, casualty insurance, life insurance and similar schemes; and all other costs borne by employers in the employment of labour that are not related to employee compensation (such as costs of training, welfare services to employees, payroll taxes etc.). Measures of labour cost should be net of any subsidies, rebates or allowances from governments for wage and salary payments to employees, or for other labour costs borne by employers.

The System of National Accounts 2008 (2008 SNA) provides the statistical framework for summarising and analysing economic flows, such as economic production, the income generated by production, the distribution of income among the factors of production, and the use of income through consumption or the acquisition of assets.

The 2008 SNA, produced jointly by the United Nations, International Monetary Fund, World Bank, Commission of the European Communities and the Organisation for Economic Co-operation and Development, has been adopted by the ABS as the conceptual basis for compiling the Australian System of National Accounts (ASNA).

National accounts statistics are measured at the aggregate macro-economic level, and are compiled as aggregations of transactions that occur between units in the various institutional sectors (such as the household sector and the government sector). Although compiled at a macro-economic level, the structure and definitions of the national accounts can also be related to the micro-data collected in household surveys and other data collections.

Compensation of employees is defined as:
"...the total remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done by the latter during the accounting period."

United Nations, System of National Accounts 2008

The national accounting aggregate that is of main interest in relation to remuneration of employees is compensation of employees, which measures income earned by employees from their employers for services rendered.

The 2008 SNA partitions compensation of employees into three main components: wages and salaries in cash, wages and salaries in kind, and employers' social contributions.

Wages and salaries in cash

Wages and salaries in cash include wages and salaries paid at regular intervals, together with payments by measured result and piecework payments, allowances for working overtime, for working away from home and similar taxable allowances, pay for annual and other leave for short periods, ad-hoc bonuses and commissions, gratuities and tips received by employees.

Wages and salaries in kind

Employees can also be remunerated in wages and salaries in kind, such as goods or services. The provision of goods and services as part of remuneration may reflect taxation advantages for the employer or employee by avoiding payments in cash, or arrangements where the employer provides free or subsidised accommodation, travel, food, motor vehicles, employee stock options and other goods and services for the private use of employees.

In terms of valuing the in-kind payments, the 2008 SNA recommends: "When the goods or services have been purchased by the employer, they should be valued at purchasers' prices. When produced by the employer, they should be valued at producers' prices. When provided free, the value of the wages and salaries in kind is given by the full value of the goods and services in question. When provided at reduced prices, the value of the wages and salaries in kind is given by the difference between the full value of the goods and services and the amount paid by the employee.”

Employers' social contributions

Employers' social contributions are incurred by employers in order to secure social benefits for their employees. In theory, the contributions are made well in advance of the benefits being paid; for example, there is a time difference between the payment of contributions to a superannuation fund and the receipt of superannuation benefits by retired employees. In the national accounts, entitlements to social benefits are generally dependent on certain events or circumstances occurring, such as sickness, accidents, redundancy or retirement. Contributions are treated as part of remuneration, while the benefits are treated as part of households' secondary income. The treatment is largely analogous to the payment of premiums and the receipt of claims with respect to insurance transactions.

In the ASNA, the same basic framework as presented in 2008 SNA is used. However, for measurement reasons, there are differences between the conceptual ideal presented above and the actual estimates compiled within the ASNA. The differences relate to severance, termination and redundancy payments, sick leave and other leave payments (except annual and long service leave payments), and changes in provisions for future employee entitlements.

Severance, termination and redundancy payments, sick leave and other leave are types of social benefit payments. There is no separately modelled estimate of the contributions required to provide the benefits, with the actual benefit payments in any period used to estimate the contributions. It is this amount that is included in compensation of employees. Although some information has been collected in the past to separately identify severance, termination and redundancy payments from other wages and salaries, currently no information is available to consistently differentiate between these types of payments and other wage and salary payments. Consequently, the imputed contributions that relate to these benefits are included in wages and salaries in cash, rather than in employers' social contributions.

Under full accrual accounting the estimate of the remuneration of employees would be based on the change in the level of outstanding entitlements to remuneration, particularly with respect to annual, sick and long service leave. While the ASNA would ideally use information on a full accruals basis, a reasonably large proportion of the data collected with respect to wages and salaries is on a cash basis, and hence the ASNA does not fully account for the changes in provisions as required by the international standards.

Treatment of shares and share options

Wages and salaries paid in kind covers the cost of goods and services which are provided to the employee, or to another member of the employee's household, free of charge or at a substantial discount, and which are clearly of benefit to the employee as a consumer. This includes stock options paid as bonuses, redundancy packages or annual salary agreements.

The value of employee stock options that forms part of compensation is estimated as at the vesting date, which is the date at which the employee becomes entitled to receive shares or exercise an option to buy shares. However, in view of the fact that the entitlement is usually earned progressively over a longer period, the value will be spread over the period from the original grant date to the vesting date. Any change in value between the vesting date and the date of actual exercise of options will not be treated as employee compensation, but as a capital gain or loss.

The integrated system of wages statistics, developed by the International Labour Organization (ILO) as a result of the 12th ICLS in 1973, sets out the international standards for the concepts, definitions and classifications used in the collection and compilation of statistics of wage rates, earnings and labour costs. More recent international statistical standards, including the 2008 SNA and the 17th ICLS resolution on household income statistics, have remained consistent, as far as possible, with the ILO's integrated system of wages statistics.

The system of wages statistics is designed to meet the needs for information on the levels and movements in average earnings, and on distribution of earnings and hours for different employee types.

Earnings concepts and international guidelines

The statistical measure from the integrated system of wages statistics of main interest in measuring remuneration of employees is 'earnings'. Earnings statistics are based on the concept of wages and salaries as income to the employee. The concept broadly aligns with the wages and salaries component of compensation of employees in the 2008 SNA. However, whereas the national accounts measures wages and salaries as an economic flow over an annual or quarterly period, earnings statistics are generally a series of 'point-in-time' measures of the average earnings of employees in a short reference period. As a result, the definition of earnings is slightly narrower than the national accounts definition of wages and salaries. It refers to remuneration paid 'as a rule at regular intervals', to differentiate between earnings that can be expected to be received regularly (e.g. annually, quarterly or fortnightly) and one-off payments.

International guidelines for wages statistics define earnings as:
"…remuneration in cash and in kind paid to employees, as a rule at regular intervals, for time worked or work done together with remuneration for time not worked such as for annual vacation, other paid leave or holidays. Earnings exclude employers' contributions in respect of their employees paid to social security and pension schemes and also the benefits received by employees under these schemes. Earnings also exclude severance and termination pay.

Statistics of earnings should relate to employees' gross remuneration, i.e. the total before any deductions are made by the employer in respect of taxes, contributions of employees to social security and pension schemes, life insurance premiums, union dues and other obligations of employees."

International Labour Organization, 12th ICLS, 1973

The ICLS guidelines state that the value of wages and salaries in kind should be the value directly accruing to the employee (rather than the cost to the employer). In other words, the value should reflect what it would cost the employee to purchase the goods or services themselves. As individuals are generally only able to purchase goods and services at retail prices, it is appropriate to value wages and salaries in kind at retail prices. However, the guidelines also note that, for employer based surveys, the valuation of wages and salaries in kind depends on whether the employer is supplying its own product (in which case producer prices should be used) or acquiring goods or services to be passed to the employee (in which case purchaser prices should be used).

Earnings concept as applied in Australia

Notionally, the earnings concept used in Australia is consistent with the international concept, although in operationalising the concept in surveys of employers, measures of earnings generally excluded wages and salaries in kind prior to 2006, largely due to practical considerations. Information on the value of benefits provided by the employer has not always been readily available from employer payrolls, and the contribution of wages and salaries in kind to total employee earnings was relatively insignificant when most of the relevant surveys were first established.

However, as a result of changes in the nature of employee remuneration arrangements in recent years, in particular the increasing use of salary sacrifice arrangements, the ABS reviewed the conceptual basis of remuneration statistics in late 2006. The key change to the conceptual basis following on from this review is that the value of goods and services obtained through salary sacrifice arrangements, i.e. where the employee has chosen to forgo wages and salaries in cash in order to receive the goods or services, are now included conceptually in wages and salaries in cash. Wages and salaries in kind will continue to be excluded from earnings measures. For further information, see Information Paper: Changes to ABS Measures of Employee Remuneration.

Statistics on household income at the aggregated macro-economic level are described within the 2008 SNA. Total gross household sector income is the income accruing to the household sector from production (principally compensation of employees, which is of main interest in analysing remuneration issues) and from property income (such as interest and dividends), together with current transfers from other sectors.

In addition to forming sector level aggregates, statistics on household income can be compiled from the perspective of measuring the economic well-being of individuals and households, in terms of the distribution of income across households and individuals for various population subgroups of interest.

Household income concepts and international guidelines

International guidelines for the measurement of household income were revised in 2003 at the 17th International Conference of Labour Statisticians (ICLS), an expert group convened by the ILO. The guidelines were developed for the purposes of measuring income distribution on a comparable basis internationally, and for the collection and dissemination of household income statistics at aggregate and micro-data levels that are consistent, to the extent possible, with other international guidelines, including SNA93.

In the ICLS guidelines the concept of household income consists of all receipts, whether monetary or in kind (goods and services), that are received by the household or by individual members at annual or more frequent intervals, but excludes windfall gains and other such irregular and typically one-time receipts. Household income receipts are available for current consumption and do not reduce the net worth of the household through a reduction of its cash, the disposal of its other financial or non-financial assets, or an increase in its liabilities.

The 2003 ICLS guidelines include definitions for the components of household income. The component 'employee income' is defined to be broadly comparable with the definition of compensation of employees in the 2008 SNA.

Employee income concepts and international guidelines

Guidelines for household income statistics define employee income as comprising:
"...direct wages and salaries for time worked and work done, cash bonuses and gratuities, commissions and tips, directors’ fees, profit-sharing bonuses and other forms of profit-related pay, remuneration for time not worked as well as free or subsidised goods and services from an employer. It may include severance and termination pay as well as employers' social contributions."

International Labour Organization, 17th ICLS, 2003

The flexibility in the ICLS definition of employee income regarding both severance and termination pay and employers' social contributions can give rise to two situations where employee income will not be consistent with the 2008 SNA definition of compensation of employees. Firstly, compensation of employees includes employers' social contributions, so if the option to exclude them from employee income is exercised then a difference arises between the two measures. Secondly, provision for severance and termination pay is classified in SNA93 as part of employers' social contributions, and SNA93 provides practical advice that these provisions can be approximated by the actual payments occurring in a reference period. Exercising the option to include the actual severance and termination payments in employee income, when the provision for them is not included as part of employers' social contributions within employee income, will reduce the difference between employee income and compensation of employees.

The 2003 ICLS guidelines value employee income in kind at relevant market prices (producer or basic prices) for equivalent goods and services, in line with SNA93 recommendations. Market prices include transport costs, taxes and subsidies. Where the employee income in kind consists of the outputs of the employer’s production processes, and is 'imposed payments in-kind' with little or no market value, a zero value is applied in computing employee income.

Employee income concept as applied in Australia

In the dissemination of household income statistics, the ABS defines the employee component of income to include regular and recurring cash receipts from wages and salaries.

The severance and termination payments and other employers' social contributions, which are part of compensation of employees in the ASNA, are excluded from Australian household income statistics. In addition, the concept of employee income differs from the ASNA concept of wages and salaries by excluding income in kind, which includes employee benefits such as the provision of a house or a car.

Restricting measurement of employee income to regular and recurring wages and salaries in a 'current income' concept was intended to provide a measure of the income that was currently available to the household to support their living standards, and the income that was likely to be available in the near future. That is, in looking at weekly income at the household level, a one-off payment received during the survey reference period was not included in measures of household income as it was not ongoing income.

The exclusion of income in kind was largely an historical issue arising from the impracticality of reliable reporting by householders for the value of income in kind, and reflected an expectation that the amounts would not be so significant as to affect distributional analysis at the household level. Changes in aggregate household income, inclusive of such in-kind income over time, would be reflected in the national accounts concept.

The diagram below summarises the conceptual framework for statistical measures of employee remuneration in Australia (in the context of the broader concept of labour costs). The narrowest concept outlined in the international guidelines is that of 'Earnings'. Concepts of 'Wages and salaries', 'Employee income', 'Compensation of Employees' and 'Labour costs' all include and extend upon the concept of 'Earnings'.

1. The concept 'employee income' is broadly comparable with compensation of employees.
2. Conceptually, earnings comprise regular wages and salaries in cash and regular wages and salaries in kind.
    

The ABS produces earnings statistics, as well as earnings related measures, from a range of sources.

Household surveys provide:

• earnings by socio-demographic characteristics;
• earnings by a range of employment characteristics, such as paid leave entitlements; and
• greater geographic information about place of usual residence including Statistical Area level 4 under the Australian Statistical Geography Standard.

However, limitations of household surveys data include:

• earnings are less robust, with reliance on respondents' accurate recall of (pre-tax) earnings;
• some respondents report on behalf of others in the household which can affect the quality of data reported;
• fewer and less robust information about business characteristics; and
• components of earnings estimates not available.

Employer surveys provide:

• more accurately reported earnings as data are obtained from employers' payrolls;
• components of earnings collected separately (i.e. ordinary time and overtime earnings); and
• consistent business characteristics (such as industry and business size), as this information is maintained on the ABS Business Register.

However limitations of employer surveys data include:

• limited socio-demographic characteristics of employees;
• limited information about characteristics of employment; and
• only state/territory geographic information about place of work available.

Our Earnings guide provides summary information on our various earnings measures, their purpose and how to use them.

Estimates of earnings are produced from a number of ABS surveys and include measures of average weekly earnings, earnings distributions and earnings composition. The definition of earnings, and the measures produced, varies between surveys as discussed below.

The key ABS collections producing earnings statistics are:

• the biannual (six-monthly) survey of Average Weekly Earnings (AWE)
• the biennial (two-yearly) survey of Employee Earnings and Hours (EEH)
• the annual survey of Characteristics of Employment (COE)

In the first two surveys (which are employer based), the measure of earnings relates to a short reference period (e.g. a pay period), and is restricted to cash wages and salaries that are received regularly and frequently. The measure of earnings includes, for practical reasons, employer payments for sick leave (conceptually part of employers' social contributions in 2008 SNA).

The measure of earnings used in the COE survey (which is a household survey) relates to the most recent pay; that is, the last total pay before tax or any other deductions. It also includes irregular and infrequent payments, and payments related to other periods. This is for practical reasons only.

Estimates of earnings are also produced from the Survey of Employment and Earnings (SEE) and the Survey of Major Labour Costs (MLC); however, these surveys use a broader definition.

Weekly Payroll Jobs and Wages also produces a near real-time index of changes in wages.

The AWE survey measures regular wages and salaries in cash associated with employee jobs. Estimates of average weekly earnings, and changes in average weekly earnings, are published twice yearly (in respect of the May and November quarters). The definition used in the AWE survey aligns closely with the international definition of earnings.

The earnings measure collected in the AWE survey is limited to:

• remuneration for time worked or work done - ordinary time and overtime pay, penalty payments, commissions (where a retainer, wage/salary is also paid), taxable allowances (e.g. shift, site, dirt, height allowances), incentive and piecework payments, directors salaries;
• remuneration for time not worked - including paid leave and public holidays, and workers compensation payments paid through the payroll; and
• bonuses and gratuities - includes regular and frequent bonuses only (e.g. weekly, fortnightly or quarterly), and regular payments made under profit sharing schemes.

The following components of remuneration are excluded from AWE earnings measures:

• wages and salaries in kind;
• amounts salary sacrificed; and
• all other payments that are irregular or are not related to the survey reference period - including retrospective pay and pay in advance, severance, termination and redundancy payments; leave loadings; and half-yearly, annual or irregular bonuses.

In addition, estimates which are inclusive of salary sacrifice are now compiled from the AWE survey. The Average Weekly Cash Earnings (AWCE) series are available in respect of the May 2010 quarter onwards. The new AWCE series complement (rather than replace) the existing series by providing estimates of average weekly earnings which include salary sacrificed earnings.

Estimates of average weekly earnings are derived by dividing estimates of gross weekly earnings by estimates of number of employees. These measures do not relate to the earnings of the 'average employee'.

Changes in the average may be affected not only by changes in the underlying rates of pay, but also by changes in the weekly hours worked (or paid for) and by changes in the composition of jobs in the workforce. Compositional changes can be the result of variations in the proportion of full-time, part-time, casual, adult and junior employees, variations in the occupational distribution within and across industries, variations in the distribution of employees between industries, and variations in the proportion of male and female employees.

The AWE survey produces a range of estimates of average weekly earnings paid per employee job. The following estimates are produced: average weekly ordinary time earnings for full-time adults; average weekly total earnings for full-time adults; and average weekly total earnings for all employee jobs (i.e. whether full-time or part-time, or whether paid at adult or junior rates). These estimates can be classified by sex, sector, industry and state/territory.

The biennial Survey of Employee Earnings and Hours (EEH) measures regular wages and salaries in cash associated with employee jobs. The EEH survey produces estimates of earnings distributions and average weekly earnings classifiable by sex, adult/junior status, managerial/non-managerial status, full-time/part-time status, hours paid for, components of pay, occupation, industry, sector, level of government, state/territory, and method of setting pay.

From the 2006 EEH survey onwards, earnings measures include amounts salary sacrificed.

The components of earnings available from the EEH survey are ordinary time cash earnings and overtime cash earnings. Ordinary time cash earnings relates to payment for award, standard or agreed hours of work, including allowances, penalty payments, payment by measured result, regular and frequent bonuses and commissions (where a retainer/wage/salary is also paid). Overtime cash earnings relates to payment for hours in excess of award, standard or agreed hours of work.

The EEH survey also produces estimates of average hourly total earnings for non-managerial employees, classified by male/female, permanent/fixed-term contract/casual, state/territory, and method of setting pay. These estimates are derived by dividing estimates of gross weekly earnings by estimates of total weekly hours paid for.

Earnings measures used in the annual Characteristics of Employment (COE) household survey relate to gross payments received from either the main job or all jobs during the reference period. No adjustments are made to exclude components of pay that are outside the international earnings definition, such as irregular bonuses, and components of pay that do not relate to the reference period (such as retrospective pay and pay in advance). Earnings measures produced from COE are restricted to cash earnings, i.e. they exclude contributing family workers.

The COE survey produces estimates of mean and median weekly earnings per employee. Estimates of mean weekly earnings of employees are derived by dividing estimates of gross weekly earnings by estimates of the number of employees. Mean weekly earnings represent the average gross (before tax) earnings of employees. Median weekly earnings are defined as the earnings amount which divides the earnings distribution into two groups with equal numbers of employees, one half having weekly earnings below the median and the other half having weekly earnings above the median.

Separate estimates are produced for earnings in main, second and all jobs held by employees; and earnings distributions. Estimates are produced for both main job and all jobs, classifiable by a range of socio-demographic and economic variables including age, birthplace, sex, relationship in household, state/territory of usual residence, industry, occupation, sector, full-time/part-time status and hours worked.

Earnings statistics are also produced from the Survey of Employment and Earnings (SEE) and the Survey of Major Labour Costs (MLC). However, unlike the AWE, EEH and COE surveys, the SEE and MLC surveys are not designed to produce estimates of the concept of earnings per se, but estimates which align with the broader concepts of wages and salaries, compensation of employees or labour costs. As such, SEE and MLC define earnings more broadly than in the AWE and EEH surveys, and estimates are not comparable across surveys.

The definition used in SEE and MLC extends upon the definition of earnings by also including irregular payments (such as irregular bonuses) and other payments which may not relate to the reference period (such as pay in advance and retrospective pay). MLC also includes severance, termination and redundancy payments, and all fees paid to directors and office holders. Separate estimates of severance, termination and redundancy payments are also available from SEE.

Estimates from SEE and MLC are primarily used in the production of estimates of compensation of employees within the Australian National Accounts. Unlike the AWE and EEH surveys, which are designed to estimate average earnings levels at a point in time, the SEE and MLC surveys are designed to estimate earnings flows to employees over a financial year.

The remuneration earned by employees for labour services rendered is measured in the Australian National Accounts aggregate ‘compensation of employees’. The compensation of employees measure comprises wages and salaries in cash or in kind, and the value of employer's social contributions for their employees.

The key sources used in compiling estimates of compensation of employees are:

• the Economic Activity Survey (EAS);
• the Quarterly Business Indicators Surveys (QBIS); and
• the SEE.

Data from the infrequent MLC survey are also used to provide benchmark information. A more detailed description of the concepts, sources and methods used to compile the national accounts is presented in Australian System of National Accounts: Concepts, Sources and Methods. Estimates of compensation of employees are contained within the Income Accounts of the Australian National Accounts, which are published in Australian System of National Accounts, and Australian National Accounts: National Income, Expenditure and Product.

Estimates of labour costs are produced from the MLC, and the annual Economic Activity Survey.

Estimates of the underlying changes in the price of labour (indexes of changes in hourly labour costs for employee jobs) are produced from the Wage Price Index.

The measure of labour costs available from the MLC survey relates to the main costs incurred by employers as a consequence of employing labour. The labour cost components collected in the MLC survey are:

• Employee earnings;
• Superannuation;
• Payroll tax;
• Workers' compensation; and
• Fringe Benefits Tax.

A number of labour costs are not collected in the MLC Survey. These include: training costs; costs associated with employee welfare services; and recruitment costs. With the exception of training costs, these items are not considered to make a significant contribution to total labour costs. Training costs were collected in the ABS Training Expenditure and Practices Survey, conducted for financial year 2001-02, and in the earlier Training Expenditure Survey conducted for September quarters of 1989, 1990, 1993 and 1996. Costs covered in these surveys are for structured training provided by employers. For information see Employer Training Expenditure and Practices, Australia.

All data are collected on a cash basis, i.e. they reflect actual payments made in the survey reference period. As such, they do not reflect costs incurred in the reference period for which payments are made in a later period, but they include payments made in the survey reference period for costs incurred in a prior period. The survey has a 12 month (financial year) reference period and is conducted on an infrequent basis.

Estimates of total labour costs and costs per employee job can be cross classified by state/territory, industry, sector, level of government and employer size.

As discussed above, the definition of earnings used in the MLC is broader than that used in the AWE, EEH and COE surveys.

For the MLC survey, superannuation costs are the total employer superannuation contributions paid during the year on behalf of employees. It excludes the value of salary sacrificed by employees in exchange for superannuation contributions. During 2002-03, legislation underlying the Superannuation Guarantee Charge (SGC) required that employers provide superannuation contributions of at least 9% of gross wages and salaries for all eligible employees. Although employers may treat the value of salary sacrificed by employees to superannuation as employer contributions under SGC obligations, in this survey such contributions are treated as earnings, and not as superannuation costs. Occasionally, surplus funds of some defined benefit superannuation schemes are used to offset the superannuation cost incurred by contributing employers in a particular time period.

Payroll tax is defined as the amount of tax paid during the survey reference year in respect of employee earnings, net of any rebates. Payroll tax assessed for payments to contractors and other persons not considered employees is excluded.

Workers’ compensation is the cost to the employer of providing workers’ compensation cover for employees. There are three ways to meet these costs. The majority of employers pay a premium to an insurer. In this case, workers’ compensation costs are considered to comprise premiums paid during the reference year, including the component that covers the employee for common law damages, and any workers’ compensation costs not reimbursed by the insurer, including ‘make-up’ and ‘excess’ pay.

Some larger employers may become ‘self-insurers’ and cover most costs themselves. In this case, workers’ compensation costs are considered to comprise lump sum payments and payments made as part of employee earnings, premiums paid during the year to offset liability at common law for workers’ compensation, and any other costs, including common law costs not reimbursed by the insurer, such as legal, accounting, medical and administrative costs.

In the public sector, some workers’ compensation costs are paid from consolidated funds. In most cases these payments relate to liabilities incurred under prior legislation.

Fringe benefits are remuneration provided to employees in the form of benefits such as goods or services - for example, use of a work car, a cheap loan, or health insurance costs. These may be provided through salary sacrifice arrangements, as part of salary packages, or through other arrangements. Fringe benefits tax (FBT) is payable on the value of benefits provided, although exemptions apply to some categories of employers (e.g. certain not-for-profit organisations) and certain benefits (e.g. laptop computers).

Estimates of labour costs from the Australian Industry series are derived using a combination of data from the annual ABS Economic Activity Survey (EAS) and business income tax data provided by the Australian Taxation Office. This series defines labour costs more narrowly than the MLC survey. Labour costs are restricted to: wages and salaries paid to employees; employer contributions to superannuation; and workers' compensation. Severance, termination, and redundancy payments are included in wages and salaries. For further information on data content and collection methodology of this series, see Australian Industry.

The quarterly Wage Price Index (WPI) measures the quarterly change in the price employers pay for labour due to market factors. The WPI is unaffected by changes in the quality or quantity of work performed; that is, it is unaffected by changes in the composition of the labour force, hours worked, or changes in characteristics of employees (e.g. work performance).

Wage Price Indexes (WPIs) were first produced by the ABS in the December quarter 1997. In the September quarter 2004, the inclusion of non-wage indexes complimented the existing suite of WPIs, and combined with WPIs to create Wage Price Indexes (LPIs). In March 2012, ABS program reductions led to the non-wage and LPI indexes being discontinued, with the September quarter 2011 representing the last in the series.

The ABS constructs four wage price indexes on a quarterly basis:

• ordinary time hourly rates of pay excluding bonuses;
• ordinary time hourly rates of pay including bonuses;
• total hourly rates of pay excluding bonuses; and
• total hourly rates of pay including bonuses.

For further information, see Wage Price Index: Concepts, Sources and Methods.

Employee income is defined as "regular and recurring cash receipts from wages and salaries". Employee income includes: wages and salaries; tips, commissions and regular bonuses; other profit-sharing bonuses; piecework payments; payment for recurring odd jobs, casual work; penalty payments and shift allowances; directors' fees; remuneration for time not worked (e.g. holiday pay, sick pay, pay for public and other holidays, and other paid leave); worker's compensation paid by the employer; and leave loadings.

Employee income excludes severance or termination pay, allowances paid by an employer purely to cover the cost of work-related expenses, and pension payments from unfunded schemes paid to former employees.

Measures of employee income are available from a number of ABS household collections including:

• the Survey of Income and Housing;
• the Household Expenditure Survey; and
• the Census of Population and Housing.

The Survey of Income and Housing is a two-yearly survey that collects detailed information on employee income. For detail on the content and methodology of the survey, see Household Income and Wealth, Australia.

The Household Expenditure Survey (HES) also collects detailed information on employee income. Some information is collected on income in kind (namely consumable goods provided by employers). For more detail on the content and methodology of the survey, see Household Expenditure Survey, Australia: Summary of Results.

The Census of Population and Housing collects information on total income levels (ranges) only. Estimates cannot be classified according to type of income. For more detail on the content and methodology of the Census, refer to the Household surveys section.

Employee Income is available from the LEED. Information is available commencing from the 2011-12 financial year and is available down to micro-regional levels. Key statistics are published in Personal Income in Australia.

Workplace relations can be regarded as the relationships and interactions in the labour market between employers and employees (and their representatives), and the intervention in these relations by governments, government agencies and tribunals (e.g. Fair Work Commission).

The field of workplace relations is complex and diverse and, for statistical purposes, is not easily measured. The ABS collects information on a number of topics to provide an insight into the state of the workplace relations environment. This section discusses statistics on: the different methods that are used to set pay of employees in Australia (such as award only, collective agreements and individual arrangements); trade union membership; and industrial disputes. Where they exist and are relevant, international guidelines relating to these statistics are also outlined.

Statistical measures relating to how employees' pay is set (such as award only or through an agreement) are used to monitor the effects of industrial and workplace relations reforms and wages policy.

A collective agreement is defined as:

"…a written agreement concluded between one or more employers or an employers' organisation on the one hand, and one or more workers' organisations of any kind on the other, with a view to determining the conditions of individual employment, and in certain cases, to the regulation of other questions relative to employment".

International Labour Organization, 3rd ICLS, 1926

International guidelines on the production of statistical measures on how pay is set concern collective agreements (ICLS 1926) and relate to the numbers of, contents of, and employee coverage of collective agreements.

The ABS does not collect statistics on the numbers or contents of collective agreements as defined by ICLS guidelines described above. However, data about pay setting methods are collected in the ABS Survey of Employee Earnings and Hours (EEH) biennially from May 2000 onwards. The definitions associated with these methods are outlined below.

The survey identifies the main methods used to set pay for employees in Australia, and estimates the proportion of employees who had their pay set using each method. The methods used to set pay identified in the survey are:

• award only;
• collective agreement; and
• individual arrangement.

Employees are classified to the award only category if they are paid at the rate of pay specified in the award, and are not paid more than that rate of pay. Awards are defined as legally enforceable determinations made by Federal or State industrial tribunals or authorities that set the terms of employment (pay and/or conditions), usually in a particular industry or occupation.

Awards have been the traditional way of setting minimum pay and conditions in Australia, and provide a safety net for employees. Employees on 'over-award' pay (i.e. paid at a certain amount or percentage above the rate of pay specified in an award) are classified as having their pay set by an unregistered individual arrangement. Under the current workplace relations system established by the Fair Work Act (2009), Fair Work Australia determines the minimum pay and conditions of employees in the national workplace relations system (federal jurisdiction) through modern awards. The minimum wage of each modern award is reviewed annually.

Employees who have a collective agreement with their employer which sets the main part of their pay are classified as having their pay set by a collective agreement. A collective agreement is defined as an agreement between an employer (or group of employers) and a group of employees (or one or more unions or employee associations representing the employees). A collective agreement sets the terms of employment (pay and/or conditions) for a group of employees. Collective agreements are further classified as registered or unregistered, reflecting whether they are registered with a Federal or State industrial tribunal or authority.

Employees who have an individual agreement, contract or other arrangement with their employer which sets the main part of their pay are classified as having pay set by an individual arrangement. An individual arrangement is defined as an arrangement between an employer and an individual employee on the terms of employment (pay and/or conditions) for the employee. Common types of individual arrangements are individual contracts (which are not allowed to be made under the Fair Work Act), letters of offer and common law contracts. An individual contract (or letter of offer) may specify all terms of employment, or alternatively may reference an award for some conditions and/or in the setting of pay (e.g. over-award payments).

There are some differences between the international definition of collective agreement and that used in the EEH:

• the definition of collective agreements outlined in the international guidelines is broader than the definition used in the EEH. The international definition encompasses both collective agreements and awards as defined in the ABS survey; and
• the definition of collective agreements outlined in the international guidelines is restricted to written agreements, whereas the survey definition includes both written and verbal agreements.

Statistics on the characteristics of employees, their earnings and how their pay is set, for each of the methods of setting pay (award or pay scale only, collective agreement, and individual arrangement), are currently produced from the biennial ABS business survey, the Survey of Employee Earnings and Hours. For more information on the content and collection methodology of this survey, see the Employee Earnings and Hours, Australia methodology.

The ABS does not collect statistics on the numbers or contents of collective agreements, as defined by ICLS guidelines described above. However, information of this type is available from other sources for collective agreements available under various State and Federal industrial relations jurisdictions. The amount and type of information available varies significantly, and readers should note that statistical measures produced are not necessarily consistent with international statistical guidelines or other ABS measures of the economically active population.

Measures of numbers of awards and collective agreements that have been arbitrated, certified or registered with industrial tribunals are often published in the annual reports of the various State and Federal industrial relations tribunals. They are generally restricted to the numbers of award or pay scale only and collective agreements registered over a given reference period, and may also include details of the numbers of award or pay scale only and collective agreements currently in force and not replaced, and details of employees covered at registration date. Details of the numbers, employee coverage, wage outcomes and contents of certain types of collective agreements are also available from the Australian Centre for Industrial Relations Research and Training, the Commonwealth Department of Employment (Federal certified agreements) and, from time to time, the equivalent State government departments.

Union membership in Australia has declined since the mid-1970s. The changing workplace relations environment is one of the key factors in the decline in trade union membership. Another factor is the change in the composition of the labour market, with a decline in jobs in the industries and types of employment (full-time permanent) that were traditionally highly unionised.

A trade union is defined as an organisation consisting predominantly of employees, the principal activities of which include the negotiation of rates of pay and conditions of employment for its members.

There are no international recommendations or guidelines relating to statistics on trade union membership. Since August 2014, numbers of employees who are members of a trade union are collected on a two-yearly rotating basis from the Characteristics of Employment Survey (COE), a supplementary survey to the Labour Force Survey (LFS). Prior to August 2014, trade union membership was collected from the Employee Earnings, Benefits and Trade Union Membership (EEBTUM) Survey.

Estimates of the number and proportion of employees who are trade union members, and the duration of and time since an employee was previously a trade union member, are produced annually from the Characteristics of Employment Survey.

International guidelines define labour disputes as:

"…a state of disagreement over a particular issue or group of issues over which there is conflict between workers and employers or about which grievance is expressed by workers or employers, or about which workers or employers support other workers or employers in their demands or grievances."

International Labour Organization, 15th ICLS, 1993

Labour disputes comprise strikes, lockouts and other types of action in which workers may be involved. Involvement may be direct or indirect: for example, workers may participate directly in strike by stopping work, or indirectly if they are prevented from working because of the strike. Secondary effects of action due to labour disputes are excluded from measures of disputes.

International guidelines define strikes as:

"…a temporary work stoppage affected by one or more groups of workers with a view to enforcing or resisting demands or expressing grievances, or supporting other workers in their demands or grievance".

Lockouts are defined as:

"…a total or partial temporary closure of one or more places of employment or the hindering of the normal work activities of employees, by one or more employers with a view to enforcing or resisting demands or expressing grievances, or supporting other employers in their demands or grievances."

International Labour Organization, 15th ICLS, 1993

Other types of action are defined as "actions affected by one or more groups of workers or by one or more employers, with a view to enforcing or resisting demands or expressing grievances, or supporting other workers or employers in their demands or grievances, in which there is no cessation of work". Other types of action include work bans, go slows, work limitations etc. Secondary effects are "the effects on other establishments where workers are prevented from working or their work is disrupted, or the effects on other groups of self-employed workers who are prevented from working or whose work is disrupted". Examples of secondary effects include stand-downs because of lack of materials, disruption of transport services, and power shortages.

The international guidelines recommend a core set of statistical measures of disputes be collected, and that these be supplemented or extended by additional measures as appropriate. The core set of statistical measures should cover all strikes and lockouts, and all employees directly involved. Other types of industrial action and the self-employed are not core and should only be included where relevant. Measures of strikes and lockouts that should be collected include: numbers and duration of strikes and lockouts; and both numbers of workers involved and amounts of time lost by workers involved. Where possible, data relating to strikes and lockouts should be collected, compiled and presented separately.

Statistics on industrial disputes are collected by the ABS on a monthly basis in the Industrial Disputes collection and released for a quarterly reference period. Statistics on disputes in this collection are, as much as possible, based on the concepts and definitions outlined in international guidelines. The term 'industrial dispute' is defined more narrowly than in the international guidelines and refers to only 'strikes' and 'lockouts'. An industrial dispute is defined as "a state of disagreement over an issue or group of issues between an employer and its employees, which results in employees ceasing work. Industrial disputes comprise strikes, which are a withdrawal from work by a group of employees; and lockouts, which are a refusal by an employer or group of employers to permit some or all of their employees to work".

The ICLS definitions of strikes and lockouts explicitly mention the temporary nature of the stoppage or closure, and disputes in support of other workers. However, while neither of these issues is explicitly included in the ABS definition, both are applied in the collection of statistics. Statistics on industrial disputes are restricted to stoppages of work of ten working days or more and exclude both 'other forms of action' and the 'self-employed'. The number of working days lost is defined as the total amount of ordinary time lost by employees on strike or locked out, regardless of the length of the stoppage. Statistics include direct and indirect involvement at the locations where the stoppages occurred, but exclude secondary effects of industrial action (e.g. stand-downs at other locations because of lack of materials).

Other data collected in the Industrial Disputes collection include:

• Cause of dispute - relates to the main cause of stoppages of work, and not necessarily all causes that may have been responsible for work stoppages. Initially, the classification of cause of dispute identifies whether a dispute occurred during a process of workplace/enterprise bargaining. Disputes are then further classified according to the main cause of the dispute. Causes include: remuneration; employment conditions; health and safety; job security; managerial policy; and union issues.
• Working days lost per employee involved - for an individual dispute, defined as the average number of working days lost per employee involved in the dispute. It is calculated by dividing the number of working days lost in the dispute by the number of employees involved (both directly and indirectly).
• Employees directly involved in a dispute - those who actually participated in the dispute in order to enforce or resist a demand or to express a grievance.
• Employees indirectly involved in a dispute - those who were stood down at the location where the dispute occurred, but who were not themselves parties to the dispute. Employees who were stood down at locations other than those where the dispute occurred are excluded.
• Employees newly involved in a dispute - for a new dispute, comprise all employees involved and, for an ongoing dispute, those involved for the first time.
• Total employees involved - comprises employees newly involved and, for an ongoing dispute, those who continue to be involved. Total employees involved for any period of time is obtained by adding together the number of employees involved in each dispute for the period.
• Reason work resumed - relates to the reason(s) for ending the stoppage of work, and not necessarily to the reason(s) for settling all matters in the dispute. Reasons include: negotiation without intervention of a third party; State legislation; Federal legislation; pre-determined return to work; resumption without negotiation; and mediation.
• Working days lost - refers to working days lost by employees directly and indirectly involved in the dispute. Estimates of working days lost per thousand employees are calculated for a quarterly period by dividing the total number of working days lost in the period by the total number of employees in the Australian workforce in the period (obtained from the ABS Labour Force Survey) and multiplying by 1,000.

ABS statistics on industrial disputes are released each quarter in Industrial Disputes, Australia. Readers should refer Industrial Disputes, Australia methodology for more detail on the content and methodology of this collection.

A productivity measure is an indicator of the efficiency or effectiveness of production; that is, how much production (or output) is achieved given a certain amount of resources (or input). The broadest definition of 'productivity', from the International Labour Organization (ILO) is "the ratio between output and the total input of factors required to achieve it". In this sense, productivity is "the end result of a complex social process including: science, research and development, education, technology, management, production facilities, workers and labour organisations".

Most analyses seeking to measure productivity have confined themselves to a partial (or single factor) measure, as opposed to total factor (or multi-factor) productivity. Single factor measures of productivity are expressed as a ratio between a given measure of output and a given measure of one factor of production (labour, capital, raw materials, etc.). It follows that there are many measures of productivity, each of which relates to a particular factor of production. It is therefore possible to speak of the productivity of labour, of capital, of raw materials, etc. Such measures reflect the growth in output not accounted for by the growth in that particular factor of production. The ratio of output to hours worked - often referred to as a measure of labour productivity - reflects the growth in output attributable to all factors of production other than hours worked. Often the measure used varies in accordance with the level at which productivity is analysed, e.g. plant, industry, branch of the economy or the economy as a whole.

Increases in labour productivity are often regarded as an indicator of improvements in aggregate living standards, as either more output (and thus total income) is achieved with given labour, or a given amount of output (and thus total income) is achieved with less time spent on labour.

While the ILO has published two studies (in 1951 and 1969) on the measurement of labour productivity, no fixed definitions have been promulgated by that organisation. The view taken in the 1969 study was that, while it was useful to have a set of definitions which correspond to the various measures of productivity, it was premature to set a single productivity ratio for each measure. At the same time it was recognised that time worked or labour force may be suitable measures of labour input, while physical output and value-based measures were appropriate for considering output for particular purposes. This flexibility remains appropriate depending on what use or analysis is to be performed with the productivity measure involved.

Considerations such as those led an ILO Working Group on Productivity Statistics to make recommendations, especially on the economic coverage of productivity series, the choice of units of measurement for output, and the corresponding labour input. For output, estimates of real gross domestic product (GDP) were preferred. For labour inputs, the objective was to ensure that account was taken of all the activities of all persons engaged in production.

The Working Group considered that the improvement of labour productivity statistics depended on better national statistics on output, and on the existence of corresponding data for employment or hours of work. Similarly, it was considered that the ability to compare the trend and level of productivity between one country and another improved with the use of comparable concepts for the definition of output, input and prices, and the wider use of international standards in existence in these fields. The standards being referred to, in particular, were those of the International Conference of Labour Statisticians in respect of input, the United Nations System of National Accounts in respect of output, and the International Standard Industrial Classification in respect of scope and classification.

More recently, the ILO have included labour productivity information as part of the suite of statistics known as Key Indicators of the Labour Market (KILM). This recognises labour productivity as "output per unit of labour input (persons engaged or hours worked)". Output is defined as GDP for the economy adjusted to account for price differences in countries, while the appropriate measure of labour input is identified as the total number of annual hours actually worked by all persons employed.

The ABS recognises that the level of GDP and changes in real GDP are a function of many different factors including capital, labour, technical knowledge, scale of production and managerial efficiency. Changes in any one of these factors can result in productivity changes. While it is impossible to objectively measure the role of these factors separately, it is recognised that one of the most important and widely accepted analytical series, which is a measure of labour productivity, is real GDP per hour worked.

Estimates of labour productivity (based on GDP per hour worked), for the market sector as a whole and for each industry, are compiled by the ABS and published in the annual Australian System of National Accounts. Quarterly indexes of GDP per hour worked are published for the market sector and for the whole economy in Australian National Accounts: National Income, Expenditure and Product.

As partial measures of productivity, labour productivity indexes implicitly reflect the other factors of production, such as the contribution of capital and other factors affecting production such as technological change. When multiple factors of production such as labour and capital are explicitly considered as inputs, this is termed multi-factor productivity (MFP), which is measured as GDP per combined unit of labour and capital. MFP is often also used in productivity analysis, and for this reason the ABS also publishes annual indexes of MFP for the market sector in Australian System of National Accounts. In addition, the ABS produces annual MFP estimates at the industry level for industries within the market sector, which are available from Estimates of Industry Multifactor Productivity. The choice of which productivity measure to use depends on what analysis is being performed. For more information, see Australian System of National Accounts: Concepts, Sources and Methods.

The most common measure of labour input used in compiling the estimates presented in Australian System of National Accounts and Australian National Accounts: National Income, Expenditure and Product is hours worked. It captures the hours worked in the production of goods and services by civilian wage and salary earners, employers, self-employed persons, unpaid family workers, and members of the Australian Defence Force.

Measuring labour input as hours worked implicitly assumes that the workforce is homogeneous. An alternative approach is to use quality adjusted labour inputs (QALI). The QALI method recognises improvements to human capital due to the varying educational achievements and experience within the workforce. QALI indexes are published for the market sector in the Australian System of National Accounts, for each market-sector industry and the twelve selected industries aggregates in Estimates of Industry Multifactor Productivity.

The quality changes in labour input are captured through accounting for heterogeneity across different types of workers, by aggregating different types of workers with weights (based on wage share) reflecting differences in their productive capacity. In this way, increases in labour input can be divided between total hours worked and compositional changes in the labour force. As the workforce evolves, this compositional change can directly affect how much output can be produced from a given quantity of hours worked.

The estimates of employment and hours worked are primarily drawn from the Labour Force Survey (LFS). Aggregate and industry QALI indexes are compiled using data from the Census of Population and Housing. Intercensal periods are interpolated, and therefore care should be taken interpreting year on year changes in labour composition. For further details refer to Chapter 19 of Australian National Accounts: Concepts, Sources and Methods.

The estimates of real GDP used in the derivation of the ABS labour productivity statistics are annually reweighted chain Laspeyres volume measures. The concepts and definitions used in deriving chain volume estimates are explained in Chapter 6 of Australian National Accounts: Concepts, Sources and Methods.

In Australian National Accounts: National Income, Expenditure and Product and Australian System of National Accounts the term 'GDP per hour worked' (and similar terminology for the industry statistics) is generally used in preference to 'labour productivity' because:

• the term is more self-explanatory; and
• the measure does not attribute change in GDP to specific factors of production.

From its inception, the International Labour Organisation (ILO) recognised the importance of establishing an adequate statistical basis for the measurement and analysis of work related hazards and risks. Recommendations on the concepts associated with those statistics were made at the first, sixth, tenth, thirteenth and sixteenth (1998) International Conferences of Labour Statisticians (ICLS). Recommendations of the sixteenth ICLS are described in this section, along with sources of occupational injuries and diseases data available for Australia.

An occupational injury is defined as:
"…any personal injury, disease or death resulting from an occupational accident."

An occupational disease is defined as:
"…a disease contracted as a result of an exposure over a period of time to risk factors arising from work activity."

International Labour Organization, 16th ICLS, 1998

The following terms, used when measuring the nature and incidence of occupational injuries, were also defined by the sixteenth ICLS:

• occupational accident - an unexpected and unplanned occurrence, including acts of violence, arising out of or in connection with work, which results in one or more workers incurring a personal injury or death;
• commuting accident - an accident resulting in death or injury which occurs on the habitual route, in either direction, between the place of work or work-related training and: (1) the worker's residence; (2) the place where the worker usually takes meals; or (3) the place where the worker usually receives remuneration; and
• incapacity for work - the inability of a worker, due to an occupational injury, to perform the normal duties or tasks of the job occupied at the time of the accident.

The sixteenth ICLS made recommendations in relation to the coverage of statistics on occupational injuries and the types of information countries should aim to collect. Data should be collected for all of the occupational injuries defined above, for both fatal and non-fatal injuries, which cause an absence of work of at least one day (excluding the day of the accident). The statistics should cover all workers regardless of their status in employment (e.g. employees, employers and own-account workers), as well as child workers, informal sector workers and home workers.

The measurement unit recommended to be used for statistics on the nature and incidence of occupational injuries should be the 'case of occupational injury'. If a person is injured in more than one occupational accident during the reference period, each case of injury to that person should be separately counted. The sixteenth ICLS also recommended that data should be collected on: the enterprise, establishment or local unit; the person injured; the injury; and the accident and its circumstances.

In Australia, statistics on occupational injuries and diseases are available from household surveys conducted by the ABS, and administrative records of state, territory and Australian compensation authorities compiled by Safe Work Australia.

The main ABS statistics relating to the incidence of occupational injury and disease are available from the Work-related injuries topic on the Multipurpose Household Survey (MPHS) (see the section relating to the MPHS in this publication). The survey covers injuries sustained by all categories of employed workers, including injuries that have been claimed under workers' compensation and injuries that have not been claimed und er workers' compensation. It excludes work-related illnesses or injuries resulting in death.

While the terminology used in the Work-related injuries survey topic ('work-related injuries') differs from that used in the international standards, the underlying definitions are broadly consistent with those recommended by the ICLS. The survey has not sought to distinguish between 'work-related illnesses', 'work-related injuries' or 'work-related injuries sustained on journeys to or from work'. Instead, it broadly defines work-related injuries as illnesses or injuries sustained as a result of work activities, on a journey to or from work, or the aggravation of pre-existing conditions where employment was a contributory factor.

Some data are also available from the Australian Health Survey, which collects information about recent illnesses and long term conditions and whether they are work-related. For more information on survey content and methodology, see the Australian Health Survey: Users' Guide, 2011-13.

Safe Work Australia's National Data Set (NDS) for Compensation-based Statistics is a standard set of data items, concepts and definitions for inclusion in workers’ compensation systems operating in Australia, and enables the production of national and nationally comparable workers' compensation-based data. It is compiled from compensable injuries and diseases made under the state, territory and Australian Government worker's compensation Acts, and as such only covers compensable injuries and diseases (not information on workers not covered for workers’ compensation, or who choose not to make a claim).

The NDS is supported by several classification systems, including the Australian and New Zealand Standard Industrial Classification (ANZSIC), the Australian and New Zealand Standard Classification of Occupations (ANZSCO) and the Type of Occurrence Classification System (TOOCS). TOOCS is central to NDS. It consists of hierarchical classifications for the nature, bodily location, mechanism, breakdown agency and agency of injury or disease.

Definitions of occupational injuries and occupational diseases used in the NDS are consistent with international standards. These definitions are:

• Occupational injuries - all employment related injuries which are the result of a single traumatic event occurring while a person is on duty or during a recess period, and where there was a short or non-existent latency period. This includes injuries which are the result of a single exposure to an agent(s) causing an acute toxic effect.
• Occupational diseases - all employment related diseases which result from repeated or long-term exposure to an agent(s) or event(s), or which are the result of a single traumatic event where there was a long latency period (for example, the development of hepatitis following a single exposure to the infection).

The NDS coverage of workers' compensation claims is consistent with international standards, except for:

• occupational injuries of self-employed persons (note: the definition of self-employed workers varies across jurisdictions and is not necessarily consistent with ABS definitions);
• occurrences covered under separate legislation for specific groups of workers;
• occurrences where the workers' compensation claims are pending, in dispute, withdrawn or rejected; and
• occurrences not claimed as workers' compensation.

The type and level of detail of the information to be collected for each claim is consistent with international standards and include:

• employer description - industry, size of business;
• employee characteristics - date of birth, sex;
• job characteristics - occupation, duty status (e.g. at work, commuting, away from work), number of hours usually worked each week, normal weekly earnings, labour hire indicator, apprentice/trainee indicator;
• occurrence details - date of occurrence/report, nature of injury/disease, bodily location of injury/disease, mechanism of injury/disease, agency of injury/disease, breakdown agency of injury/disease; and
• outcome of incident - time lost, severity indicator, payments made.

More information on the NDS and workers' compensation data is available from Safe Work Australia.

Classifications group and arrange statistics into a coherent and standard structure. They are used for compilation and analysis, and to facilitate comparison with other statistical series. This section briefly outlines a number of standard economic, socio-demographic, and geographic classifications used to aggregate labour statistics.

A range of socio-demographic data is available from labour-related household collections. Standard classifications used in the presentation of labour statistics include age, sex, birthplace, marital status, families and households, schooling and educational qualifications, language, and Aboriginal and Torres Strait Islander status. Statistical standards for social and demographic variables have been developed by the ABS and are described in Family, Household and Income Unit Variables.

The occupation classification used in Australian Bureau of Statistics (ABS) surveys is the Australian and New Zealand Standard Classification of Occupations (ANZSCO). ANZSCO is a skill-based classification of occupations which covers all jobs in the Australian and New Zealand workforce. Occupation information collected in surveys and the Census provides a description of a person's job, and refers to the kind of work undertaken by an employed person irrespective of the industry in which that job is held. Jobs and occupations are fundamental concepts to the classification. A job is a set of tasks designed to be performed by one individual for an employer, whereas an occupation is a set of jobs with similar sets of tasks. Occupations are classified according to two criteria - skill level and skill specialisation.

Skill level is a function of the range and complexity of the set of tasks involved. A greater range and complexity of tasks leads to a higher skill level of the occupation. The criteria used in ANZSCO to measure skill level are the formal education and/or training, previous experience and on-the-job training usually required to competently perform the set of tasks required for that occupation.

Skill specialisation of an occupation is based on the field of knowledge required, tools and equipment used, materials worked on, and goods or services provided in relation to the tasks performed. Skill specialisation is used to group occupations according to type, rather than level of skill.

The structure of ANZSCO comprises five hierarchical levels: Major Groups (the broadest level), Sub-Major Groups, Minor Groups, Unit Groups and Occupations (the finest level). The Major Groups are distinguished from each other on the basis of skill level, and, where necessary, the broad concept of skill specialisation. The eight Major Groups are:

1. Managers;
2. Professionals;
3. Technicians and trades workers;
4. Community and personal service workers;
5. Clerical and administrative workers;
6. Sales workers;
7. Machinery operators and drivers; and
8. Labourers.

The sub-major group, minor group, unit group and occupation levels provide increasingly detailed dissections of the broad categories. For further information see ANZSCO - Australian and New Zealand Standard Classification of Occupations, 2013, Version 1.3.

Occupation data are available from the Labour Force Survey (LFS) quarterly, a number of supplementary topics to the LFS, most Special Social Surveys, the five-yearly Census of Population and Housing, and employer surveys such as the Survey of Employee Earnings and Hours (EEH).

The notion of what constitutes a standard full-time working week has required continual re-examination over several decades with the progressive decline in standard hours of work, accompanied by substantial growth in the number of persons employed under part-time working arrangements.

In the absence of any internationally accepted definition of full-time work, two approaches have been taken in various countries. The first is objective and is based on the number of hours worked. This approach is relatively simple to apply without requiring the respondent to know details about their contractual arrangements on hours worked, but provides no flexibility to accommodate variations in 'normal' hours of work in different industries and occupations. The second is more subjective and involves classifying workers as full-time or part-time based on the self-assessment of the person concerned, irrespective of the number of hours actually worked. The self-assessment approach does accommodate such differences but is based solely on self-perception, and its accuracy is dependent on respondents' knowledge of whether they work full-time or part-time in their activity. Both approaches are used in ABS surveys, with ABS household surveys primarily using the hours based method since 2003. For further detail on hours worked, see the section: Hours of Work.

The approach used in the LFS and adopted in many other ABS household surveys is to define full-time and part-time status in terms of hours worked. The definition used in the LFS and related surveys designates full-time workers as persons who (a) usually work 35 hours or more per week in all jobs, or (b) although usually working less than 35 hours a week, actually worked 35 hours or more during the survey reference week. Part-time workers are those who usually work less than 35 hours per week, and either did so during the reference week, or were not at work in the reference week. Under this definition, persons with more than one job are defined as full-time if they work 35 hours or more across all of their jobs.

The approach based on respondents' perception of their full-time or part-time status is used in some supplementary topics to the LFS, for example Participation, Job Search and Mobility Survey (PJSM) (see the relevant survey under the section: Labour Force Supplementary Surveys). This approach is most often used where information is sought about work that is not currently being undertaken, and where recall problems may be encountered using a more objective approach (e.g. for jobs held 12 months prior to the survey date).

Full-time/part-time status is available from most ABS labour-related household surveys including: the monthly LFS; labour-related supplementary topics to the monthly LFS; various Special Social Surveys; and the Census of Population and Housing.

The precise definition used in different collections varies, so please refer to the explanatory material for specific collections. For example, in the Census full-time/part-time status is based on actual hours worked in the week prior to the Census.

In ABS business surveys, the classification of employee jobs as full-time is based on whether normal hours are equal to, or greater than, what has been agreed to as being full-time under the relevant award or agreement (i.e. normal hours). If there are no agreed or award hours associated with the job, then it is classified as full-time where the usual hours of work per week are 35 or more. Part-time jobs are those which are not full-time. The full-time/part-time status classification is used in the the EEH and AWE surveys.

Managerial employees are defined as those who have strategic responsibilities in the conduct or operations of the organisation, and/or are in charge of a significant number of employees. They do not usually have overtime payment entitlements. Jobs occupied by professionally qualified persons are defined as managerial only if the occupant primarily performs managerial tasks. Jobs occupied by working proprietors of incorporated businesses (also referred to as owner-managers of incorporated enterprises) are considered managerial. Non-managerial employee jobs include clerical staff, tradespersons, non-managerial professionals, apprentices, trainees and cadets.

Care should be taken when comparing estimates based on ANZSCO groups with estimates based on the managerial status of employees. Jobs with managerial status include those classified to ANZSCO categories other than the ANZSCO major group Managers, e.g. Professionals according to ANZSCO may be categorised as having managerial status. Conversely, estimates for non-managerial jobs include some employees classified to the ANZSCO major group Managers.

The managerial/non-managerial classification is only available from the EEH.

The adult/junior classification is mainly available from ABS labour-related business surveys. In these surveys, adults are defined as employees aged 21 years or over, and employees who are paid at the adult rate regardless of their age (employees aged under 21 may be paid at the full adult rate for their occupation). Juniors are employees aged less than 21 years who are not paid at the adult rate of pay for their occupation. The adult/junior classification is available from the EEH survey. The AWE survey produces estimates relating to full-time adult jobs.

An industry classification provides a framework which enables the grouping of businesses which carry out similar productive activities. The Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC) is the standard industry classification used in Australia for the collection, compilation and publication of statistics by industry. It closely aligns with the International Standard Industrial Classification of All Economic Activities (ISIC), Revision 4, adopted by the United Nations Statistical Commission.

The ANZSIC has a hierarchical structure comprising four levels: Divisions (the broadest level), Subdivisions, Groups and Classes (the finest level). At the divisional level, the main purpose is to provide a limited number of categories for a broad overall picture of the economy and used for publication in summary tables. There are 19 divisions within the ANZSIC, each identified by a letter from A to S:

1. Agriculture, Forestry and Fishing
2. Mining
3. Manufacturing
4. Electricity, Gas, Water and Waste Services
5. Construction
6. Wholesale Trade
7. Retail Trade
8. Accommodation and Food Services
9. Transport, Postal and Warehousing
10. Information Media and Telecommunications
11. Financial and Insurance Services
12. Rental, Hiring and Real Estate Services
13. Professional, Scientific and Technical Services
14. Administrative and Support Services
15. Public Administration and Safety
16. Education and Training
17. Health Care and Social Assistance
18. Arts and Recreation Services
19. Other Services

The Subdivision, Group and Class levels provide increasingly detailed dissections of these categories for the compilation of specific and detailed statistics. For further information see Australian and New Zealand Standard Industrial Classification 2006.

Our Industry employment guide provides summary information about our industry employment measures, their purpose and how to use them.

There are a number of standard classifications which group the national economy into broad economic sectors. These sector classifications enable information to be provided about groups of economic units that have similar functions or institutional characteristics; for example, households, corporations or government units. The most relevant sector classifications for labour statistics are the Public/Private and Level of Government classifications. Other sector classifications include the Standard Economic Sector Classification of Australia (SESCA), Not for Profit, and Type of Legal Organisation. These are used within economic statistics. Sector classifications are described within the Standard Economic Sector Classifications of Australia (SESCA), 2008.

The public/private classification is used to identify whether an enterprise is a public or private unit.

The public sector includes:

• Financial corporations controlled by government;
• Government agencies, Government departments;
• Non-financial corporations controlled by government;
• Notional institutional units controlled by government;
• Public financial corporations; and
• Public non-financial corporations.

The private sector includes:

• Household institutional units;
• Not-for-profit institutions;
• Private corporations;
• Private notional institutional units;
• Superannuation funds for public sector employees; and
• Unincorporated enterprises.

The level of government classification is based on the economic function, or role, of public sector units, and enables identification of public sector units by the level of government in which they operate. The classification has the following structure:

• National (or Commonwealth) Government;
• State/Territory Government; and
• Local government.

Note that when a public sector unit cannot be defined unambiguously as under the control of a single government, that unit will be classified to the level of government which typically has that role or function.

Marital status is a core variable in a wide range of social, labour and demographic statistics, and is almost universally collected in ABS household collections. Its main purpose is to establish the living arrangements of couples in the Australian population. These living arrangements may be based on a legal concept (i.e. registered marriage), or a social, marriage-like arrangement (i.e. de facto marriage). Two separate concepts of marital status are measured, Registered Marital Status and Social Marital Status. These are discussed briefly below.

Registered marital status is a person's relationship status in terms of whether he or she has, or has had, a registered marriage with another person for whom he or she holds, or held, a valid marriage certificate. Persons may be distinguished as:

• Never married;
• Widowed;
• Divorced;
• Separated; or
• Married.

Social marital status of an individual describes their relationship to another person who is usually resident in the household, regardless of whether the relationship is formalised through marriage registration. A social marriage exists when two persons live together as husband and wife, or partners, and individuals are regarded as married if they are in a de facto marriage, or if they are living with the person to whom they are registered as legally married. Persons may be distinguished as:

• Registered marriage;
• De facto marriage; or
• Not married.

For additional information on marital status, see Labour Force Survey Standard Products and Data Item Guide.

The concepts of families and households are fundamental in the collection and dissemination of both social and labour statistics. A household can be thought of, in its broadest sense, as a group of persons who live and eat together as a single unit within a household. Notions of what constitutes a family vary. However, for statistical purposes it is defined within ABS collections as two or more related (by blood, marriage, adoption, step or fostering) persons, one of whom is at least 15 years of age, who are usually resident in the same household. Households and families constitute the basic groups of social aggregation. While the concept of household is broader than the concept of family, in practice both often refer to the same set of persons. Classifications relating to Household Composition, Relationship in Household, Family Composition and Relationship between families are discussed briefly below. For further information see Family, Household and Income Unit Variables.

Household Composition is used to describe and categorise households on the basis of the number of families present, whether or not non-family members are present (family households only), and the number of household members (non-family households only). The standard Household Composition classification is:

• One family household
  • One family household with only family members present
  • One family household with non-family members present
• Multiple family household
  • Two family household
  • Two family household with only family members present
  • Two family household with non-family members present
  • Three or more family household
  • Three or more family household with only family members present
  • Three or more family household with non-family members present
• Non-family household
  • Lone person household
  • Group household

Relationship in Household describes the familial and non-familial relationship of each person within each family in a given household. The familial relationship within each family is measured with reference to a family reference person chosen for that particular family.

The Relationship in Household classification has a four level hierarchical structure: major group and detailed minor groups. The major groups are distinguished from each other in terms of the presence or absence of residency, family membership, and relationship to reference person within the household. The major groups are:

• Husband, wife or partner
• Lone parent
• Child under 15
• Dependent student
• Non-dependent child
• Other related individual
• Non-family member
• Lone person
• Not living alone.

The minor groups provide more detailed information about the relationship within the household. For example, a child under 15 years of age is further classified as being: a natural or adopted child; a step child; a foster child; grandchild; an otherwise related child; or an unrelated child.

Statistics on family type are used to identify family structures, and are used extensively in measures of the social wellbeing of the family unit and the individuals within those families. Operationally a family is defined as two or more persons, one of whom is at least 15 years of age, who are related by blood, marriage (registered or de facto), adoption, step or fostering, and who are usually resident in the same household. The basis of a family is formed by identifying the presence of a couple relationship, lone parent-child relationship, or other blood relationship. Some households will, therefore, contain more than one family.

The Family Composition classification has a four level hierarchical structure. The groups at the highest level are distinguished from each other on the presence or absence of a couple relationship, parent-child relationship, or other blood relationship. The four groups are:

• Couple family with no children
• Couple family with children
• One parent family
• Other family

The remaining three levels provide increasingly detailed dissections of the broad categories, based on the presence or absence of children aged less than 15 years, dependent students and non-dependent children. In addition to the four distinct levels, information about the 'type of couple' is provided to distinguish the sex of partners in couple relationships, to support analysis of family composition change over time:

• Opposite-sex couple
• Same-sex male couple
• Same-sex female couple

The standard classification of educational activity, the Australian Standard Classification of Education (ASCED), was released in 2001.

The ASCED has been developed to classify educational activity by the level and field of the activity. It also provides the flexibility to report statistics on different aspects of education such as enrolments, resources (human and financial) used, or the educational attainment of the population. ASCED has been designed to be applied to a number of education-related concepts, such as a 'qualification', a 'unit of study', a 'module' or a 'course'. The classification includes all pre-primary, primary and secondary school education, as well as all formal non-school education and training. ASCED classifies education according to two elements: level of education; and field of education. These elements are described below and can be used separately or in combination. For further information, refer to Information Paper: Australian Standard Classification of Education (ASCED).

Level of education is a function of the quality and quantity of learning associated with an educational activity, and is assessed in terms of the following criteria: the theoretical and vocational orientation of the educational activity; the minimum entry requirements for the educational activity (i.e. the minimum amount of prior education needed to undertake the educational activity at that level); and the course length (or notional duration of the educational activity).

The level of education classification has nine broad levels:

• Postgraduate Degree Level
• Graduate Diploma and Graduate Certificate Level
• Bachelor Degree Level
• Advanced Diploma and Diploma Level
• Certificate Level
• Secondary Education
• Primary Education
• Pre-Primary Education
• Other Education

Field of education refers to the subject matter included in an educational activity. Fields of education are related to each other through the similarity of subject matter, through the broad purposes for which the study is undertaken, and through the theoretical content which underpins the subject matter. Fields of education are classified into progressively broader groups according to the following criteria: the theoretical content of the course; the purpose of learning; the objects of interest; the methods and techniques; and the tools and equipment.

The Field of Study Classification consists of three hierarchical levels; Broad Field; Narrow Field; and Detailed Field. The detailed fields aggregate into narrow fields and the narrow fields in turn aggregate into broad fields. The 12 Broad Field categories are:

• Natural and Physical Sciences
• Information Technology
• Engineering and Related Technologies
• Architecture and Building
• Agriculture, Environmental and Related Studies
• Health
• Education
• Management and Commerce
• Society and Culture
• Creative Arts
• Food, Hospitality and Personal Services
• Mixed Field Programmes

The development of Australia as a multicultural society and the subsequent wider interest in constructing statistical profiles of particular ethnic or cultural population groups has, over the years, increased the use of and need for quality language data. To meet these growing needs, the ABS has incorporated language questions in a range of social statistics collections. Variables collected include 'main language spoken at home', 'first language spoken', and 'proficiency in spoken English'.

Languages are classified according to the Australian Standard Classification of Languages (ASCL), and readers should refer to this publication for more information about what constitutes a language, as well as for further information on the classification itself.

Questions on 'proficiency in spoken English' are asked only of persons who speak languages other than English at home, or whose first language spoken was other than English. Respondents are asked to classify themselves as speaking English: very well; well; not well; or not at all.

Accurate and consistent statistics about Aboriginal and Torres Strait Islander peoples are needed in order to plan, promote and deliver essential services, to monitor changes in well-being and to account for government expenditure in this area. The 'Commonwealth working definition' of an Aboriginal or Torres Strait Islander is "a person of Aboriginal or Torres Strait Islander descent, who identifies as an Aboriginal or Torres Strait Islander and is accepted as such by the community in which he or she lives". In ABS statistical collections, it is not feasible to collect information on the community acceptance part of this definition, and therefore questions on Aboriginal and Torres Strait Islander Status relate to descent and self-identification only. In practice, persons are asked if they are of Aboriginal or Torres Strait Islander origin.

The classification for Aboriginal and Torres Strait Islander Status has a hierarchical structure comprising two levels. There are four categories at the detailed level of the classification (see below), which are grouped into two categories at the broader level. There is one supplementary category. Statistics are often only available at the broad levels of the classification. For further information, refer to Indigenous Status Standard:

• Aboriginal but not Torres Strait Islander Origin
• Torres Strait Islander but not Aboriginal Origin
• Both Aboriginal and Torres Strait Islander Origin
• Neither Aboriginal nor Torres Strait Islander Origin.

The ASGS brings together all Australian regions on which the ABS publishes statistics within the one framework. It was used for the 2011 Census of Population and Housing, and introduced into ABS labour collections from mid-2013. The ASGS replaced the Australian Standard Geographical Classification (ASGC).

The ASGS classification structures are split into two broad groups, the ABS Structures and the Non-ABS Structures. The ABS Structures are hierarchies of regions defined and maintained by the ABS. The Non-ABS Structures are hierarchies of regions which are not defined or maintained by the ABS, but for which the ABS is committed to providing a range of statistics. They generally represent administrative units such as Postcode and Local Government Areas. The ABS Structures are built directly from Mesh Blocks. Non-ABS Structures are approximated by either Mesh Blocks, the Statistical Areas Level 1 (SA1s) or the Statistical Areas Level 2 (SA2s).

The ABS Structures comprise six interrelated hierarchies of regions. They are:

• Main Structure
• Indigenous Structure
• Urban Centres and Localities/Section of State Structure
• Remoteness Area Structure
• Greater Capital City Statistical Area (GCCSA) Structure
• Significant Urban Area Structure.

Under the main structure, Statistical Area Level 4 (SA4) regions are the largest sub-State regions in the ASGS and are used for the release of Labour Force Statistics. They are designed for the output of labour force data, and reflect labour markets within each State and Territory within the population limits imposed by the Labour Force Survey (LFS) sample.

The Non-ABS Structures comprise eight hierarchies of regions. They are:

• Local Government Areas (LGAs)
• Postal Areas
• State Suburbs
• Commonwealth Electoral Divisions
• State Electoral Divisions
• Australian Drainage Divisions
• Natural Resource Management Regions
• Tourism Regions

The ASGS is constructed on the principle that it must fulfil user needs for spatial statistics while also conforming to general classification principles.

For further information see Australian Statistical Geography Standard (ASGS): Volume 1 - Main Structure and Greater Capital City Statistical Areas (ASGS).

More detailed information on the ASGS is available from the ABS Geography portal.

Labour markets were a key consideration in the design of the SA4s, which are the smallest statistical area used for releasing labour force data. Labour force data has two geographic components to it - the labour supply (where people live) and demand (where people work). For statistical purposes, it is ideal to maximise the extent to which the region being analysed contains both sets of geographic locations. Labour markets are geographic regions, which reflect the highest degree of interconnectivity between the labour supply and demand. By reflecting labour markets, the output data are relevant to both labour supply and demand.

SA4s reflect labour markets within each state and territory, within the population limits imposed by the Labour Force Survey sample. They represent labour markets, sub labour markets, or groups of labour markets within each state and territory. Most SA4s have a population above 100,000 persons to provide sufficient sample size for labour force estimates. In regional areas, SA4s tend to have lower populations (100,000 - 300,000). In metropolitan areas, the SA4s tend to have larger populations (300,000 - 500,000).

In the 2011 edition of the ASGS there were 107 SA4 regions covering the whole of Australia without gaps or overlaps. These include 18 non-spatial SA4 special purpose codes comprising Migratory–Offshore–Shipping and No Usual Address codes for each state and territory.

In the 2016 edition of the ASGS there are 108 SA4 regions. The changes to the 2016 edition of SA4s were that the Western Australia - Outback SA4 was split into two SA4s, Western Australia - Outback (North) and Western Australia - Outback (South). Norfolk Island was added to the Other Territories SA4, which also includes Jervis Bay, Cocos (Keeling) Islands and Christmas Island.

From the January 2014 issue of Labour Force, Australia (cat. no. 6202.0), labour force estimates and the regional time series are published under the ASGS. Regional labour force data are currently published for the standard 88 SA4s in the 2011 edition of the ASGS in Labour Force, Australia, Detailed. Labour force data is not available below the SA4 level, and is not collected for the 18 special purpose SA4s or the Other Territories SA4.

Examples of Statistical Area Level 4 maps are included below.

The Standard Australian Classification of Countries (SACC) is a classification of countries essentially based on the concept of geographic proximity. In its structure, it groups neighbouring countries into progressively broader geographic areas on the basis of their similarity in terms of social, cultural, economic and political characteristics.

The base level units in the classification are 'countries', which is defined to include:

• fully independent countries (sovereign nation states);
• administrative subdivisions of the United Kingdom (England, Scotland, Wales and Northern Ireland);
• external territories and dependencies of independent countries, for example, Falkland Islands, Martinique;
• units which are recognised geographic areas, the ownership or control of which is in dispute, e.g. West Bank/Gaza Strip; and
• residual categories ('not elsewhere classified' (n.e.c.) categories) consisting of geographic areas which are not separately identified in the classification, and which are not part of one of the separately identified base level units, e.g. Polynesia (excludes Hawaii), n.e.c. contains a number of minor islands which are not part of any of the separately identified country units of the Minor Group Polynesia (excludes Hawaii).

The classification includes all countries currently existing in the world, as defined above.

The SACC is a three-level hierarchical classification ranging from broad major groups to the base unit of discrete countries, as defined above. The three levels consist of:

• 255 discrete countries, as described above;
• 27 minor groups, which are groups of neighbouring countries; and
• 9 major groups.

Each of the 9 major groups are formed by aggregating geographically proximate minor groups, which in turn are groups of neighbouring countries similar in terms of social, cultural, economic and political characteristics. Each major group lies wholly within the bounds of a single geographic continent (with two exceptions: North Africa and the Middle East, and Americas). The nine major groups are:

• Oceania and Antarctica
• North-West Europe
• Southern and Eastern Europe
• North Africa and the Middle East
• South-East Asia
• North-East Asia
• Southern and Central Asia
• Americas
• Sub-Saharan Africa

For further information see Standard Australian Classification of Countries (SACC).