Labour Statistics Malerato Mosiane Labour Statistics Division Statistics

Labour Statistics Malerato Mosiane Labour Statistics Division Statistics South Africa Seminar on Developing a programme for the implementation of the 2008 SNA and supporting statistics 17 -19 October 2012 Pretoria, South Africa 1

Outline • • Sources of labour market information QLFS – – – • How the LFS evolved From LFS to QLFS Activities of Labour Statistics section Why conduct the QLFS How QLFS is conducted Labour Force Framework and definitions QLFS and QES 2

Sources of labour market information Household-based surveys • October Household Survey (OHS) annually 1995 -1999 • Labour Force Survey (LFS) – in Mar, Sep each year since 2000 • Income and Expenditure Survey 1995, 2000, 2005/6, 2010/11 • General Household Survey (GHS) – in July each year since 2002 • Community Survey – February 2007 • Quarterly Labour Force Survey (QLFS) - Jan 2008 Establishment surveys • Survey of Employment and Earnings (SEE discontinued) • Quarterly Employment Statistics (QES) Population Census (whole country), 1996, 2001, 2011

QLFS 4

How the LFS evolved LFS questionnaire developed in 1999 Supplements added in March & September each year • Expanded Public Works Programmes (EPWP) since Sep’ 05 • Agriculture since Mar’ 01 • Volunteer work since Sep’ 01 Supplements added in September each year • Migrant workers since Sep’ 02 (except Sep’ 06) Supplements added intermittently • Survey of Employers and the Self-employed (SESE) - Mar’ 01, Sep’ 05 • Child Labour - some questions included in LFS Mar’ 05 • Deaths – once off in Mar’ 02 (subsequently moved to GHS). Child Labour stand-alone survey in 1999 5

Re-engineering of LFS • Concerns raised about LFS – – Coverage Frequency Timeliness Analysis • LFS re-engineered based on recommendations by IMF consultants in June 2005 • Recommendations reviewed by consultants to Stats SA and senior management • Decision taken to re-engineer the LFS 6

Implications of LFS re-engineering • From bi-annual to quarterly collection – Continuous quarterly data collection and processing – Appointment of permanent field and data processing staff • Publish results shortly after quarter end • Detailed analysis • Etc Establishment of Labour Statistics Division 7

Activities of Labour Statistics unit 8

Activities of Labour Statistics Unit • Quarterly Labour Force Survey (QLFS): – Household survey ü Supplements to the QLFS – Survey of the employers and the self-employed (SESE) (2009): • Conducted every 4 years • Sub-sample of the QLFS • Provide information on the characteristics of micro- and small businesses in South Africa that are not registered for VAT. – Volunteer Activities Survey (VAS) (2010): • Conducted every 4 years • Sub-sample of the QLFS • Collects data on the volunteer activities of individuals aged 15 years and older. 9

Activities of Labour Statistics Unit ü Supplements to the QLFS – Survey of Activities of Young People (SAYP) (2010) • Conducted every 5 years • Sub-sample of QLFS • Collects data activities of children 7 -17 years • Time use survey (2010): – Conducted every 5 years – Aims to provide information the activities that individuals in South Africa spend their time on. 10

Why QLFS is conducted 11

Why conduct the QLFS • The Quarterly Labour Force Survey (QLFS) is the principal vehicle for providing current labour market information • QLFS is used to provide the quarter-to-quarter changes in the labour market indicators. These include: – Employment (Both in the formal and informal sector) – Descriptors of employment - e. g. Industry, occupation, atypical employment indicators (hours of work , contract and other benefits) – Unemployment, duration of unemployment – Inactivity. – Market vs Non-Market activities. 12

How QLFS is conducted 13

How QLFS is conducted • Sample of 3080 PSUs – Approximately 32 000 dwelling units – The sample for the redesigned Labour Force Survey is based on a stratified two-stage design with probability proportional to size (PPS) sampling of primary sampling units (PSUs) in the first stage, and sampling of dwelling units (DUs) with systematic sampling in the second stage – The sample is designed to report at National, Provincial and metro level. Currently the reports are at national and provincial levels. – Rotating sample – each dwelling unit in the sample for four quarters and then rotated out (75% sample overlap quarter-toquarter) 14

Distribution of the Master Sample by province A total of 3 080 PSUs in the Master Sample 15

Conducting the QLFS Collect data Q 1 Collect data Q 2 Collect data Q 3 Collect data Q 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Results Q 4: Core Q 1: Core Q 2: Core Q 3: Core Report each year on additional aspects of: Employment Unemployment & not economically active Annual report in September of following year using all information Supplementary reports as required 16

Other processes • Face-to-face interviews – continuously – 0110 methodology • Week 1 - publicity and set up appointments • Week 2 and 3 – conduct interviews • Week 4 - wrap up and master sample update • Continuous data processing – scanning • Weighting • Data analysis • Report writing • Publish results 4 -6 weeks after quarter end 17

Labour Force conceptual framework and Definitions 18

Labour force conceptual framework • Because employment statistics has to be consistent with production statistics the System of National Accounts (SNA) is followed to determine who is economically active (i. e. employed or unemployed) • A person is counted as economically active if and only if he/she contributes or is available to contribute to the production of goods and services falling within the SNA production boundaries 19

System of National Accounts (SNA 1993) Activities Economic activities (production of goods & services) Market production § Production of goods and services for sale § Production of other goods and services such as government activities Non-economic activities Non-market production Production of agricultural and other products for own consumption/use § § § House work § Minor repairs Growing mealies, fruits, vegetables Hunting animals and birds, catching fish Fetching wood, water, dung Collecting thatching materials Processing of agricultural and other products for own consumption/use § § § Making butter, cheese, beer Slaughtering livestock, Making furniture Weaving baskets and mats Tailoring Making clay pots Production of fixed assets for own use § Construction of own dwellings, farm buildings § Clearing land for cultivation § Major repair work 20

Classification • Individuals have to be classified into three mutually exclusive and exhaustive categories following Labour Force Framework hierarchy: →Employed → Unemployed → Inactive / not in the labour force 21

Employed (Market production only) Employed persons are those who during the reference week: • Did work for a wage, salary, commission or any payment in kind (including paid domestic work), even if it was for only one hour; or • Ran any kind of business, big or small, on their own or with one or more partners, even if it was for only one hour; or • Helped without being paid in a household business, even if it was for only one hour; or • Were temporarily absent from their jobs or businesses but were definitely returning to them. 22

Deriving informal sector in the QLFS Employed Employers; Ownaccount; Working unpaid in hhold business Employees Income tax deducted by employer Registered for VAT or Income tax No No Size of establishment less than 5 employees Yes Informal sector 23

Unemployed – official definition Persons above 15 years who during the reference week were: • “without work” – not in paid employment or self-employment • “available for work” – were available for paid work or self-employment during the reference week • “have taken active steps” in the four weeks preceding the interview to seek paid employment or self-employment 24

Unemployed – Expanded definition Job search criterion is relaxed The unemployed are persons above 15 years who during the reference week were: • “without work” – not in paid employment or selfemployment • “available for work” – were available for paid work or self-employment during the reference week 25

Inactive Inactivity is also an important indicator. The inactive are mainly: • Students • Housewives • Retired • Disabled • Discouraged work-seekers 26

Discouraged work-seekers in the QLFS Among people who did not look for work: Job search activities in the last 4 weeks No Wanted to work the previous week Yes Reasons for not trying to find work or start business last 4 weeks: • No jobs available in the area • Unable to find work requiring his/her skills • Lost hope of finding any kind of work Availability to start work/business the previous week Yes Discouraged No NEA Other NEA 27

Main indicators Unemployment rate Unemployment x 100 Labour force Absorption Rate Employed Working age (15 -64 yrs) Labour Force Participation Rate Labour force Working age (15 -64 yrs) x 100 28

Quality measures • Response rate as a quality indicator set to above 80%. − The most recent release (qrt 2: 2012) reported 92, 6% at national level − The lowest response rate was in GP at 82, 9% − This was followed by WC at 86, 4% − The rest of other provinces reported response rates of above 93, 0% 29

Quality measures • Precision as a quality measure was set to be less than 5% at national level and less than 10% at provincial level for employment. This is measured by Coefficient of variation (CV) CVs for employment estimates by province WC 1, 6 EC 2, 7 NC 3, 4 FS 2, 0 KZN 1, 7 NW 2, 7 GP 1, 2 MP 2, 3 LP 3, 8 RSA 0, 7 None is above 5% even at provincial level 30

QLFS and QES

Difference between QLFS and QES QLFS Coverage Frequency Reference Period QES Private households including worker’s hostel Target population is civilian noninstitutionalised aged 15 and older. Formal, informal, Agriculture and employment in Private hh Quarterly sample survey of 30 000 dwellings (sampling unit is dwelling and unit of observation is the household) A week prior to the interviews Collection is in the middle two weeks of each month of the quarter VAT registered business (pay roll) Employees only. Formal nonagricultural sector Quarterly sample survey of 20 000 non-agric formal enterprises Pay roll on the last day of the quarter

Difference between QLFS and QES QLFS Definitions SIC QES Formal Sector Non-agric Employers and own account worker whose businesses are registered for tax (income tax or VAT) Employees whose employers deduct income tax from their salaries Employees whose employer does not deduct income tax but work for establishment with more than 5 employees All industries Formal Sector-non agric VAT registration Agriculture and Private households excluded

Difference between QLFS and QES QLFS Employment Estimates of employed persons concept Employment Includes employers, own-account definition workers, unpaid family workers, difference persons employed in agriculture, private hh and workers absent without pay QES Estimates of jobs which are paid i. e those on a payroll of a firm Formal nonagricultural employment in businesses registered for VAT.

Comparison between the QES and QLFS • Trend in formal sector employment between the QES and QLFS are similar, but levels of employment higher in QLFS.

Thank you 36

The QLFS sample • Sampling Frame • Census 2001 enumeration areas (EAs - 80 787) • On average an EA consists of 150 -200 dwellings • However, over a period some EAs grow and others shrink so listing maintenance is used to update the frame 37

The sample • Sampling Frame • In preparation of the sampling frame small EAs (25 -99 Dus) are combined with adjacent EA of the same type to form Primary Sampling Unit (PSUs) and very big EAs are split into a number of PSUs. • This process generated 52 939 PSUs in the entire country. • From the 52 000 PSUs, a sample of 3080 PSUs was selected for the QLFS 38

The sample • Sampling Frame • This sample size was determined based on the required level of precision of employment ratio at national and provincial level • Measures of precision are determined by the magnitude of the Coefficient of variation (CV) • This was set to be at least less than 5% at the national level and less than 10% at the provincial level 39

The sample • After selecting the 3080 PSU. The listing process follows • Each and every dwelling within the boundaries of each PSU is listed and numbered • The list is used to select a systematic sample of between 10 and 12 dwellings to be interviewed • Each DU is visited 4 times and then rotated out to avoid respondent fatigue • There is a 75% sample overlap quarter-toquarter to minimize sampling variability 40

Data Weighting After the data collection and editing phases of the survey are completed; • Sampling weights are constructed so that the responses could be properly expanded to represent the entire population. • This is a result of calculations involving the following factors • Original selection probabilities • Base weight adjustment which include non-response adjustment and PSU adjustment • Benchmarking to a known population counts produced by the Statistics SA demography division 41