My recent post on the results of the latest Quarterly National Household Survey (QNHS) provoked some discussion of the Irish unemployment data. I thought it would be helpful to follow up by comparing the evidence available from three measures of unemployment, namely, the Live Register (LR) and two series derived from the QNHS.
The LR data are based on administrative records of those ‘signing on’ for various entitlements, principally Jobseeker’s assistance and benefit. It also includes some people who are working short-time, as well as some seasonal and casual workers who are not fully unemployed, and some people gaining credited social welfare contributions who may not be actively seeking work. In fact Central Statistics Office in its monthly release of the LR figures warns that they are not designed to measure unemployment.
The QNHS is designed specifically to measure employment and unemployment. Similar surveys are conducted across the EU with the aim of providing internationally-comparably measures of labour market performance. The widely-quoted measures of employment and unemployment from the QNHS are based on International Labour Office (ILO) definitions. To be ‘ILO unemployed’ a person must in the week before the survey be without work but available for work and have recently taken specific job-search steps.
A separate measure of unemployment is also published in the QNHS, based on the concept of ‘Principal Economic Status’ – that is, what the respondent considers his or her ‘usual situation with regard to employment’ .
The following Figure shows how these three measures of unemployment have behaved since 2007.
(The LR figures are published monthly. Quarterly averages have been calculated for comparability with the QNHS data. The figures have not been seasonally adjusted.)
The most important showing is the broad consistency of the three measures, especially with regard to changes in the level of unemployment. There is no evidence of a trend in the divergences between the series.
As is to be expected the LR is consistently higher than the ILO measure of unemployment. The excess has varied from a high of 68 per cent in 2007 Q1 to a low of 36 per cent in 2012 Q2. There was a marked downward trend in the ratio between 2008 and 2012 – in times of rising unemployment the gap between the two measures narrows, but as the labour market improved from mid-2012 onwards the ratio has risen. ILO unemployment has fallen by 71,000 since mid-2012, the LR by only 54,000.
The PES measure falls consistently between the two other series, but closely tracks their movements.
In recent years both here and in the US increased attention has been devoted to ‘discouraged workers’ – people who are no longer seeking employment because they believe there are no jobs available. In response to the desire to improve the measurement of unemployment during the recession, a new series on the ‘Potential Additional Labour Force’ (PALF) has been presented in the QNHS. This includes ‘persons seeking work but not immediately available’ and ‘persons available for but not seeking work’.
Since it was launched, the PALF series has followed the same broad pattern as the three measures of unemployment shown in the Figure. Over the course of 2013 the numbers include in the PALF have fallen from 60,000 to 49,300.
Much further analysis could be performed on the these data. It would be interesting to look at the series by age and sex, for example. But suffice for the moment that all the available evidence paints a consistent picture of recent developments in the Irish labour market.
50 replies on “Measuring Unemployment”
Of considerable interest in the context of assessing the future employment situation, the interview with the MOF.
Excellent post, but it is wasted on the resident leftist doom-mongers who are of the same faith-based mindset as those preparing for the rapture. “It is useless to attempt to reason a man out of a thing he was never reasoned into.”
@ JF: ” …the resident leftist doom-mongers …”
Yeah? So what? What about the rightists then? And no, its not an ‘excellent post’. But it is informative. Problematic.
I find the post very informative. It seems to show conclusively that things are improving in the area that matters most to ordinary people.
One wonders what areas other than exports are driving employment growth.
Thanks Brendan. Great explanation.
This is off topic but it is seldom that a topic on Argentina has an Irish connection. I could say that Ireland measures unemployment like Argentina measures inflation.
@B rendan Walsh
Further on ‘age’ ‘sex’ & education level would be useful_er.
‘… all the available evidence ..’
“There’s no tradition of being unemployed here. People will either find something or pack their bags,” he said.
But because the Tus scheme only runs for a year, participants often end up sitting at home, in many cases alone, when it ends, which is precisely the scenario that worries UCD sociologist Anne Cleary. Speaking at an Irish Rural Link seminar on rural isolation in nearby Ennis the following day, Ms Cleary referred to her 2012 case study on suicidal men in rural areas in her discussion entitled ‘Pain and Distress in Rural Areas’.
Citing the study of 26 men aged between 19 and 75 who have attempted to take their own lives, she spoke of the direct correlation between social and economic isolation and suicide.
“If you’re unemployed, you are going to feel isolated and out of it,” she said.
Indeed, her study found common elements among the men she studied, including marginal employment in farming or being unemployed or in “unstable employment” and being dependent on social welfare with few educational resources. They also tended to be either single, separated or otherwise not in a stable relationship and felt alone, she added. “They’re all related to social exclusion,” she said.
Someone, anyone, like to provide me with a plausible, practical explanation as to why three – maybe four different metrics, are deemed necessary. Appears to be very inefficient – in economic terms.
From a philosophical point – attempting to measure an non-entity (un-employment) seems a tad odd – in the ‘length-of-a-piece-of-string’ context. How about attempting to measure income – and whence it originates. If we agree that we are a Demander economy (ie: consumers of goods and services) – then disposable income which might be available to to spent into that economy would appear to be the appropriate metric.
And as for employment* – well its like pregnancy. You either are ‘are’, (1) or you ‘are not’, (0). And then the appropriate metric would be the proportion of the 18 – 66 age cohort of the population who are in receipt of a full-time waged-labour income. This proportion must be 60% or greater. At 59% or lower, things are starting to become a bit iffy.
Could we have, if it was not economically inefficient to do so, a single, modestly accurate waged-labour income metric, and scrap the pretentious muddle stuff.
* Another very long piece of string indeed. But that’s what you end up with if you ‘outsource’ the measurement to folk who do not fully understand the concept of a statistically reliable quantitative determination method. Anyone have a copy of the household questionnaire?
Thanks Brendan. Great post.
While on the subjects of definitions regarding unemployment data, does anyone know how the monthly unemployment rates published by Eurostat are compiled?
Are they simply based on comparable Live Register Data across the EU?
The January figures hows Ireland’s rate (11.9%) being better than the EZ average for the first time in years. Wondering how that 11.9% is constructed given the LR has a standardised rate of 12.3% in Ireland for Jan?
@ Rob S,
The LR unemployment figure is imputed from the previous release of the QNHS. The LR does not give a measure of unemployment. What the CSO do is take the most recent unemployment rate from the QNHS and impute the probable change based on the changes in the LR as there is clearly a strong link between LR changes and unemployment.
When the CSO published the Jan LR they would have used the Q3 QNHS (Jul-Sep) to derive the monthly rate. They put it at 12.3%. They now have the Q4 QNHS (Oct-Dec) which, as discussed, has soon a further increase in employment/fall in unemployment. In the QNHS release they put the estimated unemployment rate for January at 12.0%. Maybe someone else knows the difference between the CSO’s Seasonally Adjusted Standardised Unemployment Rate by Month and the figure published by Eurostat to explain why they have an 11.9% figure.
The reason for the difference between the 12.3% in the LR release on the 5th and the 12.0% in the QNHS last week is the QNHS data itself. It was not available when the estimate on the 5th was provided.
“the resident leftist doom-mongers”
Colm McCarthy is no lefty.
“So the Irish Exchequer will not have regained its fiscal freedom of action next January just because reliance on the EU/IMF financing has come to an end. Only when the debt ratio has been reduced substantially, after a period of surplus budgets and sustained economic growth, will the government have regained some freedom of action in fiscal policy.
This could take a decade even if things go well. If things go badly, it may not be feasible to exit from reliance on official lenders for the foreseeable future, and there may have to be a successor rescue programme with further conditional emergency finance, or default.”
Thanks, I am clear on the LR QNHS differences. Just unsure on the monthly Eurostat figure.
@ Rob S,
Only guessing but it might be down to differences in the seasonal adjustment technique applied by the CSO and Eurostat. The CSO put a note on changes to their SA methodology in the Jan 2011 LR release.
There is some information on Eurostat’s approach to seasonally adjusting the Irish data at the end of this:
Not wishing to unnecessarily labour the point, but the allocation by occupation is important and the current data shows that the industry category is down 42,000 jobs since end 2007 while Agriculture, forestry etc is almost unchanged.
However, in the 2 years from end 2011, there was no growth in jobs in industry but Agriculture, forestry etc jobs jumped by 37,000 or 46%.
just an FYI but there appears to be a rather strange and unhealthy obsession with the US labor participation rate,a few facts to shatter some myths.
Great irish numbers kinda,pity if external shocks derail this rather anemic recovery,lots red on the boards today.
Say the labour force issue is grand. You are still left with a larger proportion of non workers to be supported by a smaller pool of workers.
So that’s hardly going to be great for consumption. Or have you got something on that ?
@ jg: John, there is an obsession with bogey stats. Wspecially confounding ones.
If you know what the adult population is (plus or minus some error value, and you know the number of persons who are actually full-time employees (plus or minus some error value), then – over some extended time interval (6 months at least) you get a proportional metric. It should suffice as a modestly accurate gauge of the economy. If you can also estimate the Median Wage – you have two useful estimates (ie. less unreliable that the current messy lot).
As I am tired of pointing out, its income, income, income. Not jobs, jobs jobs. Our financialized, consumer driven economies mandate that as many folk as possible have adequate disposable incomes – else things go to hell in a handcart; as they are now doing. Indebted folk, with static incomes, are NOT good demanders of goods and services.
The solution to the current fiancial crisis. Lower interest rates to ZIRP and encourage more borrowing – to consume! What’s that definition of insanity then?
@seafoid indeed we do starting with targeting little islands that aide and abet tax avoidance/evasion by putting themselves in the chain.Consider that Apple workers use our schools,roads,rely on the police force,emergency services should they really have ‘stateless’ entities paying SFA in taxes,who gains from a race to the bottom?
Oh not much interest over here in military intervention in Ukraine perhaps the ‘europeans’ who facilitate tax evasion/avoidance can muster a defense force..complicated not to mention awfully expensive to be the worlds police force with all that leakage off tax dollars!
Sounds like a cunning plan but would the application of proper tax to Apple not result in lower profits and a drop in enterprise value ?. Wouldn’t the stock market fall? How would Boehner bring the Tea Party along? Wouldn’t the Koch bros and Rush object? There’s a hole in the bucket, dear Liza,
bit off thread – text from Blind Biddy in Kharkov.
Methinks Lavrov is impressively all-in. The east and south [lucky not to be in the EZ at the mo] will hold referenda – (the crux of the matter) and Crimea has, more or less, always been Russian. This can be accomplished peacefully if leading actors step back and cease the bullsh1t.
@BWSnr oh theres a very controversial solution to that too,raise the min wage for federal workers!
@seafoid lower profits?..its trapped dead money,useless,stock market is tanking right now.
Great post don’t want derail it with too much off topic stuff,wasn’t there a very colorful Ruskie,Elena Baturina wife x mayor Moscow buying hotels in Dublin on the quays from NAMA!
Yeah much better than say the Irish clients buying their debts back.
“Once Russia’s powerful listened when European embassies issued statements denouncing the baroque corruption of Russian state companies. But no more. Because they know full well it is European bankers, businessmen and lawyers who do the dirty work for them placing the proceeds of corruption in hideouts from the Dutch Antilles to the British Virgin Islands.
We are not talking big money. But very big money. None other than Putin’s Central Bank has estimated that two thirds of the $56 billion exiting Russia in 2012 might be traceable to illegal activities. Crimes like kickbacks, drug money or tax fraud. This is the money that posh English bankers are rolling out the red carpet for in London.”
Whatever the risk of employment, we are so poor at ‘risk assessment’ in this country that is has become really emabarassing.
Practically every citizen has a ‘risk assessment’ case at the mo; little wonder a buffer was created between the High Court and the Supreme Court. It is reasonable to predict, from an ‘allegedly’ labour market perspective, a massive increase in employment and ‘pseudo-capital formation’ in the legal system, which has played a blinder in protecting the upper-echelon of hibernian capital, its international forragers, and its truly lousy decision making, allegedly, on behalf of the ‘citizenry’. Uniquely in international law, the plaintiffs in these cases will have to bear both the legal costs and the damages awarded to them by the relevant court.
Wilbur is selling some of his BoI shares, now at a stellar 36c , 45% yoy per Johnny F (but still -97% over the longer term per the doom mongers)
Wilbur is a turn around specialist.
Every now and then I guess it falls apart
Wilbur bought at 10c when the doom porn merchants were telling him he was mad. He sold some a third at 33c, when the doom porn merchants were still telling him he was mad. That is quite some “failed turn around”.
Let us see where the sage pops up next.
That is fantastic but how much is BRK worth on a share price of 33c and does it have enough balls to lend money to SMEs to get the economy moving again?
What would you quantify as a successful turnaround ? Give us an ould metric there and we can monitor progress.
It seems to be that that the debt overhang, both private and public, is far bigger than whatever mediocre growth turns up. Even if there was a slight slip in unemployment where is the ship headed ?
What are JPM saying these days? Here’s a snippet from 2010
Main uncertainties remain in place – (i) NAMA terms, with new
30% haircut appearing as base case, (ii) adequate capital levels, we
maintain a long-term 8% core equity ratio requirement, (iii) who would
subscribe future capital needs, with the government still seen as the
main candidate in our view, (iv) fundamental prospects, which remain
bleak given ongoing headwinds in terms of economic activity, Irish
property prices and interest rates. We still expect BOI to post losses in
09-10E, and an 8% ROTBV by 12E, though visibility remains limited
about the timing and extent of the bank’s earnings normalization.
Remains UW – Against all these uncertainties, BOI’s valuation at fully
diluted 0.8-0.9x PTBV 10E is not compelling enough in our view to
adopt a more positive stance. We hence retain our UW, with new Dec-
10 SOP PT of €1.1 (vs. old €1.5) staying 10% below current prices.
Visibility still poor, I reckon. Any sign of normalisation where you are ?
You’d take “old €1.5” , wouldn’t you?
Here’s more from “The Irish Economy- An overview
March 2010” by Bank of Ireland global markets. Maybe that’s where Johnny Foreigner works .
If you are optimistic, just change the dates and get a consensus and away you go . I wouldn’t canvass Michael Hennigan though.
“Expectations about the near-term outlook for Ireland have
improved, with the consensus forecasting a return to annual
growth in the second half of 2010.
The median consensus GDP forecast for 2011 is now 3% growth following a
contraction of 0.5% this year
Exports will remain of vital importance to the Irish economy
and will be the catalyst for economic recovery in 2010 ”
I would regard a successfull turn-around as an increaes in growth, a fall in unemployment, a rise in employment, a decline in mortgage arrears, an improved fiscal position and a decline in debt ratios. Some of that is in place, some of that is not…debt.
Unlike you, I have moved on. I am not going to sit around all day whingeing between reading the Guardian.
How long before the turnaround ? I am not going to sit around all day reading the Guardian. The FT seems to have a better grasp on what’s happening anyway 😉
Do you think the debt is still manageable ?
What sort of price would you put on BRK 3 years out ?
@seafoid FYI no happing ending,catch a falling knife often!
Newspapers are c**p
Debt is borderline. In the properly governed world, the debt situation is manageable. In the disfunctional dystopia that is the EZ there will be one last crisis that will result in some form of monetisation and mutualisation (but do not tell Francis or he will go ape****) A large portfolio will be bought with printed money and sent to DJ locker. Either that or the EU will break up.
Wilbur’s price target on the rest of his BKIR is rumoured to be 45-50. He is a smart man.
I ll told you long ago, that mutualization will mean, that Ireland seizes your assets : – )
Ever heard of Russian Inkasso?
via JG’s bloomberg link:
: – )
Like I said before. You Germans and Finns etc have to accept that unless there is a recovery in the EZ which propels nominal GDP upwards. You have to accept
1) that you don’t get all of the money back in nominal terms that is owed to you
2) you have to transfer some of your money to us and expect not to see it again
3) you do not get all of your money back in real terms
If you do not do some combo of the above, the EU will sunder and you will be blamed again (rightly) for destroying the continent. If I was you, I would hope that the growth train gains momentum.
I dunno about the UK. It looks like a reflation of the last debt bubble.
London prices are nuts and rents are not rising in line with prices. What does that tell you ? I wouldn’t buy a flat in London now. Would you ?
A lot of journalism is cr#p but there are gems in the dreck.
the last guys, who tried to pull this “you have to accept” thing, were Cyprus, and they were told by a 21/1/1 vote, that they pay their debt or will be cut off the Target 2 system, 4 hours later.
What makes you think, that this would be any different for Ireland?
And again, which party with how many votes has such crazy criminal ideas?
Tull is right. Whatcha gonna do about growth ? Wachstumslosigkeit is a long, painful word as well as experience.
At the mo, my scenario is out there but not far & your cash is safe. However, one downturn and it is Italy or France that will arrive at your door .
the times of your catchup growth are over. productivity rises with 0.5 – 1% and that is eaten in most countries by the demographics.
This growth stimulus via inflation was tried in the 1970ties by more mature countries. Didnt work.
Italy and France have low external debt, about 20% of GDP. They would shoot themselves into the foot by doing anything crazy. Any tolerance over it would just be the end of Euro and EU somewhat later, and therefore immediately for the violators.
This should not be so difficult to understand.
And going criminal, not just on a few of external banks, but on the whole rest of Europe, as a population, over aid credits, would be a whole lot more severe than pulling an Argentina.
Data maybe behind the curve but in contrast with PMI surveys 1) both industrial production data and the CSO’s services index (more reliable than PMI surveys) showed falls in 2013.
Income tax was flat in Jan/Feb 2014 compared with the same period in 2013 despite the jump in jobs numbers.
The following is a piece that should help put the aspiration to achieve full employment by 2020, in context:
Jobless exports boom 2000-2013; What will change to 2020?
Anyone interest in a quick credit at University should take the Ordoliberal economic history course, it is a short one as it only covers the West in the early 1970s and 1921-1924 in Wiemar Germany.
Spare us the moralizing, the German position is entirely based on self interest and it is easy to resort to legalism when you have an effective veto on what is legal. Germany is a big old moral vacuum.
I do welcome your presence here Francis, it is a salutary reminder of German thinking on economics, and how simpleminded and dangerous it is.
Unthinkable! Then all Germany’s hard work crushing the other economies of the EU would evaporate.
Wasn’t there a legal case started recently in Germany arguing that Germans were constitutionally entitled to a real increase in the value of savings? They loves their money they do.
I am guessing that Ireland had managed to lose about 45K through emigration over the last twenty months. (there are no figures available yet for the last 10 months) and perhaps 100K since 2008.
Does this not “compensate” for the drop in unemployment up to now or I am missing something important?
Obviously the increased numbers employed is a relief but I would love to see the new numbers in conjunction with median wages and levels of underemployment. Are we going German?
It’s explained in the labour force section. Ireland has had a demographic bonus for a long time, increasing the size of our labour force. This is, as the cliche goes, the real source of our wealth. Emigration has turned this effect off. It’s important to bear in mind that many of those emigrating were never in the official labour force (children, university leavers, stay at home parents). And unfortunately never will now, dealing a permanent blow to our growth prospects.
The unemployment/employment improvement is real, for the labour force we have in the country (ie the labour force is no longer shrinking as you suggest).
On the other hand you are right that unemployment would be much higher if it were not for emigration (given that employment would not be available to most of those emigrating).
“Obviously the increased numbers employed is a relief but I would love to see the new numbers in conjunction with median wages and levels of underemployment. Are we going German”
There is one unexplained anomaly between the rise in employment numbers per the QNHS and the income tax returns.
If the 61000 additional employees each earned ~30,000, the additional tax yield would be approx €5000 each (assuming single people), giving an expected addition income tax revenue of ~300 million per annum. (The income tax take would be slightly less if a married profile was used)
However the YTD February 2014 returns show no increase from 2013, albeit there is a SEPA problem with the return figures.
The figures do not appear to add up, unless one assumes that many of the additional employees are of an annual wage ~18000 or are self employed and earning ~18000 or less.
So, your question is quite relevant. Better employment numbers are very welcome, but the nature of the employment seems to be such as to provide little tax return to the exchequer, aside from a reduced welfare bill.
That income tax issue is odd, but I’m thinking that there must be some kind of data lag, because AFAIK, private sector wage levels had increased over the past few years.
Perhaps slightly related, I’m curious about this big bump in the Ag/Forestry numbers. Do you know much more about that category? Are they farm labouring jobs (and therefore low wage?) Or food companies expanding? (which would make sense, the Glanbias are doing well aren’t they?)
It was the redoubtable Mr Ryan who noticed the possible income tax disparity, I was just wondering if we were swapping high wage jobs from emigrants for low wage jobs for people joining the labour force and thought the change in median wage might show it – a bit crude. I think you can still get a rising mean wage and have a falling tax take if total income is rising in the lower (though not necessarily lowest?) income tax bands faster than it is falling in the higher income tax bands.
I presume someone has the income deciles and the expertise here, right?
I did not mean to suggest that, I just wanted to note that the unemployment figures (though not the employment figures) would look a good deal worse without emigration. As you said it is a real loss.
Thanks for the link to the detailed labour force survey, I somehow failed to find it on the summary page.
@ Sarah Carey
While employment grew in 2013, it was not by 61,000 after a flat 2012.
The conditions did not dramatically change and besides farming did not add 37,000 jobs since 2011.
Almost half the additional number in the tourist sector are foreign workers, and while they may not be paying a lot of income tax, to add all these jobs suggests a big improvement in overall conditions.
Lots of farm jobs but a fall in ICT jobs?
Did Ireland add 61,000 jobs in 2013?
Thanks Michael. I think I’ll have to read your post several times to absorb it. Are you saying the farming numbers were “corrected” in some way? Give me 24 hours to work out the number tweaking and I’ll come back…
@ Sarah Carey
What is clear is that there was no economic reason for farmer/worker numbers to fall significantly from a level maintained in the period 2000-2007.
The demand for the output of North Dublin horticulture didn’t plunge and as I said in the piece the typical farmer did OK in terms of prices during the crisis.
So the adjustment in 2013 by the CSO returned the level to normal.
I’m only speculating about full-time construction workers who were part-time farmers on how they were treated when losing the full-time job, as they could still be considered as employed.
The CSO usuallly reverts on queries preety fast but maybe this time the Labour folk are busy on other things.
I have adjusted the piece to include some information from the CSO.
In 2012 48,000 were added to employment arising from the Census 2011 finding that the number of foreign nationals was underestimated by 103,000.
An interesting fact is that employee numbers are up 28,000 on 2012 and 22,000 on 2012 while self employment is back to the 2007 level – we don’t know how many of them are calling themselves ‘consultants’ as they try to find jobs.
One simple way of looking at jobs in the big sectors in 2013: IDA/
Enterprise Ireland say client companies added 12,000 net jobs, 17,000 were added in tourism activities; the public sector lost 5,000. Farming: likely insignificant.
The CSO published data on foreign workers yesterday.
The activity rate is low which may suggest some are in the black economy rather than on welfare.
The number on the Live Register is 69,000 or 17%.