Summary
Labour market statistics for the UK, including countries and regions within the UK, are published monthly by the Office for National Statistics (ONS). The Scottish Government and Welsh Government publish their own bulletins drawing on these statistics. The headline measures include the employment and unemployment rates, the number of payrolled employees and the economic inactivity rate.
The term unemployment refers to the number of people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed. The economic inactivity rate is the proportion of people aged between 16 and 64 years who are without a job who have not actively sought work in the last four weeks, and/or are not available to start work in the next two weeks.
Another measure of unemployment is the Claimant Count, which measures the number of people who are receiving a benefit principally for the reason of being unemployed. Currently, the Claimant Count consists of those receiving Jobseeker’s Allowance, and Universal Credit claimants in the “searching for work” conditionality group.
Statistics on payrolled employees are published using Pay as you Earn Real Time Information (PAYE RTI) from administrative data collected by HMRC. They cover the whole population, rather than a sample of people or companies, and they allow for more detailed estimates of the population.
The number of people with jobs is not the same as the number of jobs. This is because a person can have more than one job. Workforce Jobs (WFJ), which is a compound measure drawing upon a range of sources, provides quarterly estimates of the number of jobs in the economy and is the preferred measure of short-term change in jobs by industry.
An additional area of focus recently in labour market statistics is the number of young people not in education, employment or training (NEETs). Both the Scottish and Welsh Governments publish NEET statistics. In Scotland, estimates for 16 to 19 year olds not participating in education, employment and training are published in the Annual Participation Measure (APM) by Skills Development Scotland. The Welsh Government publishes NEET statistics. However, the methodology used in the Scottish APM is not comparable to that used by the Welsh Government due to different data sources, coverage and methodology. Scottish Government has not published NEET estimates in recent years due to methodological issues with the labour market data sources.
Things to consider
Labour market statistics are derived from multiple sources. One of the main data sources is the Labour Force Survey (LFS). The LFS has faced challenges around decreasing sample sizes and although it has partially recovered, some granular breakdowns still have very small samples and users of these statistics should closely review the quality information provided alongside using the statistics.
At the Scotland and Wales level, the LFS based headline estimates are best used to describe levels and rates at any one point in time and when considering changes over longer periods of time. Using the LFS based headline estimates to infer short term movements (quarter on quarter) may lead to misleading conclusions given the underlying volatility in the estimates.
It is recommended to use the LFS data alongside the trends in other measures of the labour market, particularly the Annual Population Survey, Workforce Jobs (a quarterly measure of jobs), claimant count and the RTI data from HMRC to gain a clearer picture of the Scottish and Welsh labour market.
What to look out for
Given the challenges with small sample sizes, short term changes to data may not reflect real world changes. Statements that focus on short term changes, particularly for smaller geographies, should be viewed alongside long-term trends in the data.
While labour market statistics are generally comparable across the UK, welfare is partly devolved and some benefits are different in Scotland than in England and Wales. Comparisons should be clear on whether they are being made on a like for like basis.
The number of people on employer payrolls does not include everyone in work. Specifically, most of the self-employed and those whose jobs are not part of company payroll are excluded. It is therefore possible for the number of payrolled employees to increase while the level of employment decreases.
Wider support
The Bevan Foundation is an independent think-tank focused on public policy in Wales after devolution.
The Fraser of Allander Institute is an independent economics research institute looking at challenges and opportunities facing the nations of the UK.
The Institute for Fiscal Studies (IFS) is an independent economics research institute. The IFS publishes its own analysis and forecasts on a range of economic and fiscal topics.
The National Institute of Economic and Social Research (NIESR) is an independent research institute that carries out research into the economic and social forces that affect people’s lives.
The Resolution Foundation is an independent think-tank focused on improving living standards for those on low to middle incomes. It publishes its own analysis and forecasts on economic and social policies.