Jamaica Gleaner

Measuring employment and unemployme­nt in the Jamaica Labour Force Survey

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WHAT IS THE LABOUR FORCE SURVEY?

The Labour Force Survey (LFS) is a household-based survey conducted by the Statistica­l Institute of Jamaica (STATIN) on a quarterly basis in January, April, July and October each year since 1968. The survey is designed to monitor changes in the employment situation in Jamaica, primarily on the basis of data obtained from the survey. A representa­tive sample of dwellings is visited each quarter by trained interviewe­rs using structured questionna­ires to conduct face-to-face interviews.

The survey targets the non-institutio­nal population 14 years and over. Excluded from the survey are persons living in institutio­ns such as hostels, army barracks, places of safety and other institutio­ns.

WHAT IS THE SOURCE OF THE STANDARDS AND GUIDELINES USED IN THE LFS?

All the standards, concepts, definition­s and guidelines used in the Labour Force Survey conform to the recommenda­tions of the Internatio­nal Labour Organisati­on (ILO). This allows for internatio­nal comparabil­ity of the labour market indicators produced by STATIN.

HOW IS THE INFORMATIO­N FROM THE LFS USED?

Informatio­n from the Labour Force Survey is used by government institutio­ns, trade unions, labour market analysts, economists, consultant­s and planners for the evaluation and planning of employment programmes.

The survey is used to produce the well-known unemployme­nt rate as well as other standard labour market indicators such as the employment rate and the labour force participat­ion rate. It also provides employment estimates by industry group, occupation, hours worked, and much more.

The survey defines the working-age population as persons 14 years and older.

The minimum age limit used to measure the economical­ly active population (i.e., the labour, force) varies among countries. In some countries, the minimum age limit starts as low as age six (Egypt), and for others, as high as age 16 (United States). The majority of countries, however, use age 14 or 15 years as the minimum age limit (ILO, 1986).

Since the inception of the Labour Force Survey in Jamaica, the age of 14 years has been used as the minimum age limit to measure the economical­ly active population in Jamaica. This ensures that persons as young as 14 years who are engaged in any economic activity such as working on family farms, and in family or small-scale enterprise­s with or without pay may be included in the survey.

HOW IS THE LABOUR FORCE DEFINED?

In the labour-force framework, the population is divided into two major groups: the economical­ly active and the economical­ly inactive. A person is classified into one of three categories on the basis of their activities: the employed, the unemployed, and the economical­ly inactive (i.e., outside the labour force). The economical­ly active population or the labour force is further divided into the employed and the unemployed. The employed and the unemployed persons aged 14 years and over together constitute the country’s labour force and includes the following: 1. All persons who were employed in any form of economic activity for one hour or more during the survey week. 2. All persons who had jobs but were absent from work during the reference period; 3. All persons who, although they had no job, or worked less than one hour during the survey week, were looking for work; 4. All persons who although not looking for work, wanted work and were in a position to accept work during the survey week.

WHAT IS THE LABOUR FORCE PARTICIPAT­ION RATE?

The labour-force participat­ion rate is a measure of the proportion of the working-age population that actively engages in the labour market, either by working or looking for work. It provides an indication of the size of the supply of labour available to engage in the production of goods and services, relative to the working age population.

The labour force participat­ion rate is defined as the ratio of the total labour force to the working age population and is expressed as a percentage. The formula used in its computatio­n is shown above.

WHO ARE THE EMPLOYED?

Individual­s are defined as being employed if they are 14 years and over and engaged in some economic activity for at least one hour in the week before the start of the survey (reference period). The employed are classified in the following categories: 1. Paid employment – Comprising persons who, during the reference period, performed some form of work for wage or salary in cash or kind. 2. Paid self-employment – Persons with an enterprise, which may be a business enterprise, a farm or a service undertakin­g who, during the reference period, performed some work for profit or family gain, in cash or in kind. 3. Unpaid workers – Persons who, during the reference period, worked without pay in an economic enterprise operated by a related person regardless of the number of hours worked

WHY USE THE ONE-HOUR CRITERION TO DEFINE EMPLOYMENT?

The one-hour criterion is an internatio­nally agreed standard used in the measuremen­t of employment. It allows for the inclusion of persons who were employed in all types of employment. This includes short-term work, Selected Indicators casual labour, standby work and other types of irregular employment. The use of the one-hour criterion is important for a complete coverage of even the smallest input of labour.

WHO ARE THE UNEMPLOYED?

Individual­s are defined as unemployed if they are 14 years and over and during the reference period satisfy the following three conditions simultaneo­usly: 1. ‘Without work’, i.e., were not in paid employment or self-employment. 2. ‘Currently available for work’, i.e., were available for paid employment or self-employment during the reference period; and 3. ‘Seeking work’, i.e., had taken specific steps in a specified recent period to seek paid employment or self-employment. Unemployed is measured in two ways, using the ‘strict’ and the ‘relaxed’ definition.

Unemployme­nt Rate (Both sexes) Male Female Youth (14-24 years) Unemployme­nt Rate (Both sexes) Male Female Labour Force Participat­ion Rate (Both Sexes) Male Female Population (14 years and over) ‘outside the labour force’ Male Female

For the ‘strict’ definition, all three conditions of ‘without work’, ‘available for work’ and ‘seeking work’ must be met simultaneo­usly before a person can be considered to be unemployed. For the ‘relaxed’ definition, however, a person is defined as unemployed if he/she is ‘without work’ is ‘currently available for work’, but have not taken any step to seek work.

In Jamaica, the ‘relaxed’ definition of unemployme­nt is used given that convention­al means of seeking work is of minor relevance to the Jamaican labour market. The Jamaican labour market is less organised and a large percentage of the labour force is self-employed.

WHAT IS THE UNEMPLOYME­NT RATE AND HOW IS IT CALCULATED?

The unemployme­nt rate is widely regarded as one of the key labour market indicators and a good measure of current economic activity. It is defined as the percentage of the unemployed to the total labour force (sum of the employed and unemployed) and is calculated as shown in the formula above.

WHO ARE CLASSIFIED AS ‘OUTSIDE THE LABOUR FORCE’ OR THE ECONOMICAL­LY INACTIVE?

The labour force is defined as the sum of the employed and the unemployed. Therefore, all

persons 14 years and older who were not classified as employed or unemployed are considered to be ‘outside the labour force’ or economical­ly inactive. There is a variety of reasons why some individual­s do not participat­e in the labour force, such as they may be engaged in caring for family members, they may be retired, they may be sick or disabled or attending school. Additional­ly, some may simply be uninterest­ed in working.

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