23 June 2021
Go to release: Monthly Unemployment May 2021
The Central Statistics Office (CSO) has today (23 June 2021) issued Monthly Unemployment Estimates results in respect of May 2021.
Commenting on today’s publication, Edel Flannery, Senior Statistician said:
“The COVID-19 crisis has continued to have a significant impact on the labour market in Ireland in May 2021. While the standard measure of Monthly Unemployment was 7.8% in May 2021, the COVID-19 Adjusted Measure of Unemployment indicates a rate as high as 21.9% if all claimants of the PUP were classified as unemployed. This alternative measure is down from a revised rate of 24.8% in April 2021 and from 29.8% in May 2020. When comparing the COVID-19 Adjusted Measure of Unemployment in different months, users should consider the impact of Government restrictions on the number of people in receipt of the PUP.
The Monthly Unemployment Rate for May 2021 using standard methodology was 7.8%, down from the revised rate of 7.9% in April 2021 and up from 5.1% in May 2020. In May 2021, the Monthly Unemployment Rate was 7.9% for males and 7.8% for females. Breaking the results down by broad age group, the Monthly Unemployment Rate for those aged 15 to 24 years was 18.1% while it was 6.8% for those aged 25 to 74 years.
As well as the standard Monthly Unemployment Estimates for May 2021, the CSO have also published an alternative COVID-19 Adjusted Measure of Unemployment which estimates the share of the labour force in May 2021 not working due to unemployment or who were out of work due to COVID-19 and receiving the PUP.
If all claimants of the PUP were classified as unemployed, this COVID-19 Adjusted Measure of Unemployment indicates a rate of 21.9% for all persons, with a rate of 21.6% for males and 22.3% for females. Breaking the results down by broad age group, the COVID-19 Adjusted Measure of Unemployment indicates a rate of 58.8% for those aged 15 to 24 years and 18.1% for those aged 25 to 74 years.”
Commenting further on the COVID-19 Adjusted Measures of Unemployment, Edel Flannery continued:
“The Department of Social Protection (DSP) have supplied supplementary information on whether PUP recipients were in full-time education when asked to certify their status online on the MyWelfare.ie service. While it should be noted that this information is not complete, it is estimated that at least 8.1% of all recipients of the PUP were attending full-time education at the time of certification. For those aged 25 years and over this could be as low as 1.3% while it is at least 33.7% for those aged under 25 years.
This analysis indicates that caution needs to be exercised when interpreting the COVID-19 Adjusted Measure of Unemployment particularly for those aged under 25 years. If the PUP scheme did not exist, those persons, being in full-time education, would not be eligible to receive Unemployment Assistance or Unemployment Benefit and so would not be included in the methodology to estimate the traditional measure of monthly unemployment.”
Commenting on the delay in the publication of the Monthly Unemployment release for May 2021, Edel Flannery added:
“A new framework regulation governing the production of European Statistics on persons and households (Integration European Social Statistics framework regulation – IESS FR) came into force on 01 January 2021. The IESS FR covers various domains of social statistics including labour market statistics. It aims to ensure that social statistics based on sample surveys, e.g. the Labour Force Survey (LFS), are produced in a more harmonised and coordinated manner across Europe.
The IESS FR and associated Delegated and Implementation Acts govern the production of the LFS and Monthly Unemployment Estimates (MUE) by the CSO. The CSO had to introduce changes to the LFS questionnaire in Ireland from Quarter 1 (Q1) 2021 because of the IESS FR. These include changes to LFS variables collected by the LFS questionnaire with some new questions added, while some questions have been removed, and others have changed in terms of response options or frequency. There have also been some changes to the order of the questions as the flow of the LFS questionnaire across Europe is now more prescribed and harmonised under the IESS FR. The LFS questionnaire for Ireland for Q1 2021 is available here: Labour Force Survey.
While no significant breaks in series for the LFS were expected due to the IESS FR, the LFS results for Q1 2021, which would normally have been published before the end of May 2021, were postponed and have been published today, 23 June 2021. The additional time was used to allow the CSO to analyse the results of the pilot survey and to fully evaluate the impacts of the IESS FR on the LFS. The Labour Market Analysis team in the CSO worked with their colleagues from the Social Data Collection division and the Methodology division in the CSO and with Eurostat to finalise the LFS estimates for Q1 2021 and ensure that a consistent and coherent historic LFS series is available for users.
The MUE results for April 2021 would normally have been compiled using the LFS benchmarks from Q1 2021. Because the introduction of the IESS FR for the LFS in 2021 has caused a delay to the compilation and publication of LFS results for Q1 2021, it has also caused a delay in the availability of the LFS benchmarks for Q1 2021 required for the MUE process. Thus, the MUE for April 2021 only incorporated LFS benchmarks up to Q4 2020 for the monthly estimates up to December 2020 while the estimates for January 2021 through to April 2021 were forecasted. The CSO decided to postpone the publication of the MUE results for May 2021 and publish them alongside the LFS results for Q1 2021 today. Please see the Implications of the Implementation of the Integration of European Social Statistics (IESS) Framework Regulation on Labour Market Statistics in Ireland in 2021 for more information.
The CSO will publish the MUE for June 2021 on Wednesday 30 June 2021.”
The PUP is administered by the Department of Social Protection (DSP). The Temporary Wage Subsidy Scheme (TWSS) was replaced by the Employment Wage Subsidy Scheme (EWSS) from 01 September 2020. There are some EWSS claims for July and August 2020 in respect of newly hired or seasonally hired employees who were ineligible for the TWSS. Both the TWSS and the EWSS schemes have been administered by the Revenue Commissioners who have provided TWSS and EWSS data to the CSO for statistical purposes and dissemination to users.
The CSO will continue to evaluate the income support schemes to determine whether any changes are required to the methodology for the traditional or COVID-19 adjusted estimates of unemployment. Any changes the CSO may make to the methodology in the future will be clearly outlined to users in the statistical release and accompanying material.
It should be noted that the DSP has been paying arrears to recipients of the PUP, to take into account the movement of people in and out of employment. The first arrears payment occurred on 01 December 2020. All PUP arrears paid to date are included in the week of the entitlement period, rather than the week of payment. The COVID-19 adjusted estimates of unemployment published today have been calculated using the latest information available.
The CSO first published the COVID-19 Adjusted Measure of Unemployment in April 2020 as part of the March 2020 Monthly Unemployment Estimates release. At the time, the COVID-19 income supports were set up as temporary measures to protect those who lost income from employment due to COVID-19.
Those benefitting from the TWSS and later the EWSS, having a connection to their employer, would continue to be classified as Employed using the internationally agreed criteria for reporting on official labour market status. It was not possible to ascertain how those in receipt of the PUP would be classified using the labour market status criteria. Because of this, the CSO established the COVID-19 Adjusted Measure of Unemployment as an upper bound measure for the true unemployment rate.
This measure assumes that all those who are in receipt of the PUP would be classified as Employed for the standard measure on Monthly Unemployment and considers them as Unemployed for the COVID-19 Adjusted Measure of Unemployment. This assumption would have held in March 2020 when those who started benefitting from the PUP scheme were required to have lost income from employment to be eligible to receive the payment. The assumption would still hold for new applicants for the PUP but is unlikely to hold now for all recipients given that the scheme has been extended and some recipients would now be in receipt of the PUP for more than 12 months.
While it is not possible to ascertain how those in receipt of the PUP would be classified in terms of official labour market status based on the International Labour Organisation (ILO) definitions for employment and unemployment, any changes to the methodology for the COVID-19 Adjusted Measure of Unemployment would result in a lower rate. Thus, the CSO have decided to continue with the previous methodology for the COVID-19 Adjusted Measure of Unemployment. It is important for users to note that it is a short-term measure and designed to be an upper bound and that is still the case now.
This approach preserves the methodology of the standard Monthly Unemployment Estimates series while at the same time providing transparency around the impact of COVID-19 on the labour market. (see Information Note on Implications of COVID-19 on the Live Register and the Monthly Unemployment Estimates - March 2020 and the updated Technical Note for Monthly Unemployment and COVID-19 Adjusted Estimates August 2020 for more details).
Enquiries:
Edel Flannery, Labour Market Analysis - (+353) 87 913 5708
Email: labour@cso.ie
For more information:
Edel Flannery (+353) 21 453 5093 or Martina O'Callaghan (+353) 21 453 5491
or email labour@cso.ie
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