Press Statement

Preasráiteas

04 November 2020

Go to release: Monthly Unemployment October 2020

The Central Statistics Office (CSO) has today (04 November 2020) issued Monthly Unemployment Estimates results in respect of October 2020.

Catalina Gonzalez, CSO Statistician, explains the approach taken today regarding the publication of the Monthly Unemployment and the COVID-19 Adjusted Unemployment Estimates:

‘The CSO first published the COVID-19 Adjusted Measure of Unemployment in April 2020 as part of the March 2020 Monthly Unemployment Estimates. 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 Temporary Wage Subsidy Scheme (TWSS) and later the Employment Wage Subsidy Scheme (EWSS), having an attachment 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 Pandemic Unemployment Payment (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 been accurate in March 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 is unlikely to hold now given that the scheme has been extended and some recipients would now be in receipt of it for more than seven months.

While it is not possible to ascertain how those in receipt of the PUP in October would be classified in terms of official labour market status, any changes to the methodology for the COVID-19 Adjusted Measure of Unemployment would result in a lower rate. Information is not currently available to establish the status of those who are currently in receipt of the PUP based on the International Labour Organisation (ILO) definitions for employment and unemployment. 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 rate 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 Information Note on Implications of COVID-19 on the Monthly Unemployment Estimates - August 2020 for more details)

Commenting on today’s publication, Catalina Gonzalez continued:

 ‘The COVID-19 crisis has continued to have a significant impact on the labour market in Ireland in October 2020. While the standard measure of Monthly Unemployment is 7.3% in October 2020, the COVID-19 Adjusted Measure of Unemployment indicates a rate as high as 20.2% if all claimants of the PUP were classified as unemployed.

The Monthly Unemployment Rate for October 2020 using standard methodology is 7.3%, unchanged from September 2020. In October 2020, the Monthly Unemployment Rate for males is 6.9% and 7.7% for females. Breaking the results down by broad age group, the Monthly Unemployment Rate for those aged 15 to 24 years is 19.0% while it is 5.6% for those aged 25 to 74 years. It should be noted that the figures released today, include the Labour Force Survey benchmarks for Quarter 3 2020.

As well as the standard Monthly Unemployment Estimates for October 2020, the CSO have also published an alternative COVID-19 Adjusted Measure of Unemployment which estimates the share of the labour force in October 2020 that were 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 18.9% for males and 21.7% for females. Breaking the results down by broad age group, the new COVID-19 Adjusted Measure of Unemployment indicates a rate of 45.3% for those aged 15 to 24 years and 16.7% for those aged 25 to 74 years.’

Commenting further on the COVID-19 Adjusted Measures of Unemployment, Catalina Gonzalez continued:

‘The CSO has been working with the Department of Social Protection (DSP) to obtain additional data which captures the impact of COVID-19 on the labour market. Using the online mywelfare.ie service, information has been captured on whether recipients of the PUP were a full-time student either at second-level or third-level for the current academic year. As most recipients have used this online service to either apply for a PUP or to self-certify their details to continue receiving the payment, analysis of the online information provided shows that at least 8.1% of PUP recipients have self-certified themselves as being registered as a full-time student. For those aged 25 years and over this could be as low as 2.2% and over while it is at least 25.4% 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.’

Finally, commenting on recent proposed changes to the COVID-19 income supports such as the PUP and the TWSS, Catalina Gonzalez added:

’The COVID-19 income supports were originally set up as short-term emergency income supports but they have been extended several times and there have been changes made in terms of the eligibility criteria and how they are being administered. While the PUP and the TWSS were both expected to cease in August, the PUP is now scheduled to continue into 2021 while the TWSS has been replaced by the EWSS from 01 September 2020. The CSO will continue to evaluate the current income support schemes and any new 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.’

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