Background Notes

Purpose of Survey

The Labour Force Survey (LFS) replaced the Quarterly National Household Survey (QNHS) at the beginning of Q3 2017.  The purpose of the survey is the production of quarterly labour force estimates and occasional reports on special social topics. The survey meets the requirements of Council Regulation (EC) No. 577/98, adopted in March 1998, which requires the introduction of quarterly labour force surveys in EU member states.

Reference Period

Information is collected continuously throughout the year from households surveyed each week in each quarter. Up to and including the fourth quarter of 2008 the QNHS operated on a seasonal quarter basis since its establishment in Q4 1997. The LFS is undertaken on a calendar quarter basis which was first adopted in the QNHS in the first quarter of 2009.

The reference quarters for survey results are:

Q1 - January to March, Q2 - April to June, Q3 - July to September and Q4 - October to December

Data Collection

The LFS is conducted using mixed mode data collection with the introduction of Computer Assisted Telephone Interviewing (CATI). As with the QNHS, information is collected from each sample household over 5 successive quarters or Waves. However, in the LFS, the first interview is conducted by a team of face-to-face interviewers using Computer Assisted Personal Interviewing (CAPI). The four follow-up interviews are conducted using CATI from a dedicated call centre, where householders have agreed to conduct a telephone interview, and are conducted using face-to-face interviews where householders have not agreed to conduct a telephone interview.

Sample Design

A new sample based on the 2011 Census of Population was selected for the LFS and this was introduced incrementally from Q1 2016. The sample is stratified using administrative county and the Pobal HP (Haase and Pratschke) Deprivation Index. A two-stage sample design is used. In the first stage 1,300 blocks are selected using Probability Proportional to Size (PPS) sampling. In the second stage households are selected using Simple Random Sampling (SRS). This ensures each household in the sample frame has an equal probability of selection.

To account for the additional attrition as a result of the introduction of mixed mode data collection, the LFS sample is being increased incrementally from Q3 2017. An additional 1,300 households are being included in Wave 1 for each quarter and this results in a total sample of 31,200 households in Q2 2018. As the sample is being increased by 1,300 households per Wave, the final design sample will increase to 32,500 households by Q3 2018.  The actual achieved sample varies over time depending on the level of response.

The number of valid responding households for the LFS in Q2 2018 was 14,071.

Households are asked to take part in the survey for five consecutive quarters and are then replaced by other households in the same block. Thus, one fifth of the households in the survey are replaced each quarter and the QNHS/LFS sample involves an overlap of 80% between consecutive quarters and 20% between the same quarter in consecutive years. It is important to note that there is no overlap in sample between the QNHS and the LFS.

The survey results are weighted to agree with population estimates broken down by age, sex and region (the regions have changed from Q1 2018 – see below) and are also calibrated to nationality control totals. The LFS results also contain a non-response adjustment to make the results from the achieved sample representative of the target sample and the population. The population estimates for April of each year are published in a separate release.

New samples, both based on the 2011 Census of Population, were introduced incrementally for the QNHS in Q4 2012 and in Q3 2016. The former was stratified using administrative county and population density while the latter was stratified using administrative county and the Pobal HP (Haase and Pratschke) Deprivation Index. The quarterly sample in each case was 26,000 households. The actual achieved sample varied over time depending on the level of response.

Households with all persons aged 75 and over and classified as inactive

Households which contain only respondents who are aged 75 or over who are each classified as Inactive (Not in the Labour Force) are not re-interviewed. This is to reduce unnecessary burden and instead answers are copied forward from the last available interview.

Statistical significance

All estimates based on sample surveys are subject to error, some of which is measurable. Where an estimate is statistically significantly different from another estimate it means that we can be 95% confident that differences between those two estimates are not due to sampling error.

Usual residence and de facto population concepts

Up to and including Q1 2006 the annual population estimates were calculated using the defacto definition of population (i.e. all persons present in the state). Since Q2 2006 a new concept of usual residence has been used, i.e. all persons usually resident and present in the state plus absent persons who are usually resident in Ireland but are temporarily away from home and outside the state.

ILO Labour Force Classification

The primary classification used for the LFS results is the ILO (International Labour Office) labour force classification. Labour Force Survey data on this basis have been published since 1988. The ILO classification distinguishes the following main subgroups of the population aged 15 or over:

In Employment: Persons who worked in the week before the survey for one hour or more for payment or profit, including work on the family farm or business and all persons who had a job but were not at work because of illness, holidays etc. in the week.

Unemployed: Persons who, in the week before the survey, were without work and available for work within the next two weeks, and had taken specific steps, in the preceding four weeks, to find work. It should be noted that as per Eurostat’s operational implementation, the upper age limit for classifying a person as unemployed is 74 years.

Inactive Population (not in labour force): All other persons.

The labour force comprises persons employed plus unemployed.

Participation, Employment and Unemployment Rates

The rates given in this release are based on the ILO classification. The Participation Rate is the number of persons in the labour force expressed as a percentage of the total population aged 15 or over. The Employment Rate is the number of employed aged 15 to 64 expressed as a percentage of the total population aged 15 to 64.

To ensure coherence with Unemployment Rates produced by Eurostat, the CSO changed the method of calculation of the Unemployment Rate as of Q2 2015. Prior to this, the Unemployment Rate was calculated as the number of unemployed expressed as a percentage of the total labour force aged 15 and over. The change introduced limits the labour force to persons aged 15-74 and this excludes a small number of persons aged 75 and over in employment from the total labour force used in the calculation. The overall impact of this change was minimal.

Duration of Unemployment

The duration of unemployment is the length of time since a person last had a job or began looking for work, whichever is more recent. The long-term unemployment rate is the number of persons unemployed for one year or more expressed as a percentage of the total labour force aged 15 to 74 years.

Part-time Underemployment

The calculation of part-time underemployment is based on ILO and Eurostat recommendations and uses the following criteria to derive underemployment:

1. Working part-time
2. Willing to work additional hours
3. Available to work additional hours

This indicator is only available from quarter 3 2008 onwards as estimates prior to that quarter were based on one single question which included the need for the person to be looking for additional work. From quarter 3 2008 the indicator is derived from a series of separate questions which allow this requirement to be excluded.       

Potential Additional Labour Force

The Potential Additional Labour Force (PALF) is the sum of the two groups ‘persons seeking work but not immediately available’ and ‘persons available for work but not seeking’. Persons in the PALF are not part of the standard labour force, which encompasses only employed and unemployed people but however they have a stronger attachment to the labour market than other persons not in the labour force. The new indicators have been defined by the European statistical office (Eurostat) following extensive international discussion regarding appropriate indicators to supplement the unemployment rate.

Further background information regarding the methodology and approach adopted by Eurostat in building these new indicators can be found at the link below. European wide and individual country results are also available here:

Principal Economic Status Classification

Results are also available using the Principal Economic Status (PES) classification which is also used in the Labour Force Survey and the Census of Population. The PES classification is based on a single question in which respondents are asked what is their usual situation with regard to employment and given the following response categories:

• At work
• Unemployed
• Student
• Engaged on home duties
• Retired
• Other

NACE Industrial Classification

The LFS sectoral employment figures are based on the EU NACE Rev. 2 (Nomenclature généraledes activités économiques dans les Communauté européenne) classification as defined in Council Regulation (EC) no 1893/2006. Fourteen NACE sub-categories are distinguished in Table 2 of this release. From Q1 2009 NACE Rev. 2 has been adopted as the primary classification of industrial sectors for use in QNHS/LFS outputs. The NACE Rev. 1.1 classification had been in use from Q4 1997 to Q4 2008.

To facilitate analysis and the running of seasonal adjustment on the time series, NACE Rev. 2 estimates have been produced from Q1 1998 onwards. As of Q2 2009 only NACE Rev. 2 estimates have been published.

Occupation Classification

As a result of changes to the European regulations governing the Quarterly Labour Force Survey (implemented in Ireland using the LFS (formerly the QNHS) the CSO has been obliged to report occupational coding data to Eurostat based on the new Europe wide classification ISCO-08 from Q1 2011 onwards. To allow this requirement to be met the CSO changed to using UK SOC2010 as the primary classification used in collecting the data. ISCO-08 is then derived from UK SOC2010.

The previously used classification for publication purposes in Ireland was UK SOC1990 and this cannot be directly compared to the new UK SOC2010 classification as all occupations have been reclassified accordingly. One particular example which highlighted this change was the reclassifying of farmers from the major occupation grouping of ‘Managers and administrators’ in SOC1990 to the major occupation grouping of ‘Skilled trades’ in SOC2010.

Results for occupations coded to the new SOC2010 classification have now been recoded for historical quarters back to Q1 2007 to provide a longer and consistent time series for users.

Further information regarding SOC 2010 is available here.

NUTS2 and NUTS3 Regions

The regional classifications in this release is based on the NUTS (Nomenclature of Territorial Units) classification used by Eurostat. Until Q4 2017, the NUTS3 regions corresponded to the eight Regional Authorities established under the Local Government Act, 1991 (Regional Authorities) (Establishment) Order, 1993, which came into operation on 1 January 1994 while the NUTS2 regions, which were proposed by Government and agreed by Eurostat in 1999, were groupings of those historic NUTS3 regions.

However, the NUTS3 boundaries were amended on 21^st of November 2016 under Regulation (EC) No. 2066/2016 and have come into force from Q1 2018. These new groupings are reflected in the LFS results from Q1 2018 onwards. The changes resulting from the amendment are that County Louth has moved from the Border to the Mid-East and what was formerly South Tipperary has moved from the South-East to the Mid-West, resulting in the new NUTS2 and NUTS3 regions:

Seasonal Adjustment Methodology

To correct for typical seasonal patterns, the series presented in Table 3 have been seasonally adjusted. The seasonal adjustment of data from the QNHS between Q2 2011 and Q2 2017 was completed by applying the X-12-ARIMA model, developed by the U.S. Census Bureau. This seasonal adjustment methodology has been reviewed following the introduction of the new LFS in Q3 2017. As a result of this review, from Q3 2017 onwards, the seasonal adjustment of the LFS is conducted using the X-13ARIMA-SEATS software also developed by the U.S. Census Bureau. The adjustments are carried out by applying the X-13-ARIMA model to the unadjusted data. This methodology estimates seasonal factors while also taking into consideration factors that impact on the quality of the seasonal adjustment, such as:

• Calendar effects e.g. the timing of Easter
• Outliers, temporary changes, and level shifts in the series

For additional information on the use of X-13ARIMA-SEATS see:

http://www.census.gov/srd/www/x13as/

Seasonal adjustment is conducted using the direct approach, where each individual series is independently adjusted. As a result of this direct seasonal adjustment approach it should be noted that the sum of any component series may not be equal to seasonally adjusted series to which these components belong, e.g. the seasonally adjusted number of males in employment and the seasonally adjusted number of females in employment will not necessarily add up to the total employment on a seasonally adjusted basis.

The X-13-ARIMA method has the X-11 moving averages process at its core, but builds on this by providing options for pre-treating the series using a regARIMA approach for prior adjustment and series extension. In essence this methodology will estimate seasonal factors while taking account of calendar effects (e.g. timing of Easter), outliers, temporary changes and level shifts.

The seasonal adjustment is designed and implemented in full accordance with the ESS Guidelines (2015).

Non-response adjustment

Non-response occurs when households that are sampled, and that are eligible for the survey, do not provide the requested information. This can lead to biased survey estimates if specific groups within the population are over- or under-represented and if these groups behave differently with respect to the survey variables (i.e. labour market outcomes). To correct for this, the CSO has introduced a non-response adjustment into the weighting procedure for the LFS.

The adjustment involves estimating response rates or propensities to respond as functions of characteristics available for responding and non-responding households, as well as characteristics of the areas where the households are located. Basically, the design weights have to be inflated by the inverse of the response propensities in order to compensate for the loss of units in the sample.

Linking the LFS sample with the Census of Population at household level provides a set of auxiliary variables which are available for both responding and non-responding LFS households. These include a mix of personal characteristics as well as characteristics of the dwelling and location (e.g. gender, age, marital status, education, personal employment status, dwelling type, area etc.). This allows the CSO to compare responding and non-responding households with respect to the characteristics available from the Census. This auxiliary information allows the use of “response propensities” to model non-response and adjust the grossing factors to compensate for non-response.

The response propensities are calculated using a logistic regression model where the dependent variable (Y) is an indicator variables corresponding to response (if the household responded then Y=1 and if the household did not respond then Y=0) and the independent variables are the set of auxiliary variables available from the Census. The estimated response propensities are then used to form adjustment cells or strata which are made up of respondents and non-respondents with similar estimated response propensities. Respondents within each cell/stratum are then weighted by the inverse of the observed response rate in that cell. This non-response adjusted weight is then used to inflate the original survey design weight to account for non-response. This approach is referred to as response propensity classification.

Back-casting methodology

The introduction of the LFS in Q3 2017 constituted a break in series for the labour market estimates published by the CSO. In an effort to mitigate the effect of the introduction of the LFS on the coherence of the historic data series, a back-casting exercise was carried out to link the QNHS and the LFS. The result of this is that the published QNHS series from Q1 1998 to Q2 2017 has been revised.

As part of the roll-out of the LFS, a parallel run of the two surveys was carried out. This allowed the estimation of the effect of the introduction of the new survey on the various labour market estimates. Quarter 1 of 2017 was used as the reference period to calculate scaling factors which were used to link the results from the two surveys. Labour market estimates were calculated from both surveys for a range of cohorts (age, sex, ILO status etc.) and the ratio of the two estimates provided a scaling factor which was applied to the historic QNHS series to create a back-cast series. 

In Q3 2017, separate scaling factors were calculated for ILO status by age and sex together with the fifteen economic sector categories (table 2 of this release) by sex:

• ILO status (Employed, Unemployed, Inactive) by sex (Male and Female) and by age (15-24 years and 25+ years)

• NACE Rev. 2 groups (table 2 of this release) by sex (Male and Female)

In Q1 2018, additional scaling factors were calculated for the eight NUTS3 regions by Labour Force ILO status, occupation categories (table 4 of this release) and highest level of education completed (supplementary table 8 of this release) by sex:

• NUTS3 Regions (pre-Q1 2018 groupings) by Labour Force ILO status (Employed and Unemployed)

• Occupation groups (table 4 of this release)

• Highest level of education completed (supplementary table 8 of this release) by sex (Male and Female)

Therefore, adjustments have been made to this historic data to enable comparability with the new LFS for these indicators. However, as a result of changes to the questionnaire, the interview mode, the introduction of a new sample, data processing changes and other methodological enhancements there are changes in the levels of some series from Q3 2017 onwards. As a consequence, the series before and after the introduction of the new survey may not be directly comparable and users should therefore note this when examining annual and quarterly changes.         

 Please refer to the following information notes for further details:

http://www.cso.ie/en/releasesandpublications/in/lfs/informationnotice-labourforcesurveyquarter32017/

http://www.cso.ie/en/releasesandpublications/in/lfs/informationnotice-labourforcesurveyquarter12018/

Monthly Unemployment

Monthly unemployment estimates were first introduced by the CSO in June 2015 for reference month May. The most recently published estimates were for May 2018 and these have now been revised along with those for January to April 2018 following the availability of new LFS benchmark estimates for this quarter. These estimates are included in Tables A3, A4 and A5 of this release.

In line with Eurostat practice, the seasonally adjusted quarterly unemployment volumes and rates included in Table 3 of this release are calculated as the average of the relevant 3 months of the quarter from the new monthly unemployment series. This approach ensures consistency between these new seasonally adjusted monthly series and the seasonally adjusted quarterly series.

Reliability of Estimates Presented

Estimates for number of persons where there are less than 30 persons in a cell are too small to be considered reliable. These estimates are presented with an asterisk (*) in the relevant tables.

Where there are 30-49 persons in a cell, estimates are considered to have a wider margin of error and should be treated with caution. These cells are presented with parentheses [ ].

In the case of rates, these limits apply to the denominator used in generating the rate. In the case of annual changes, both the current year and the preceding year are taken into account when deciding whether the estimate should be suppressed or flagged as having a wider margin of error.

Calculation of Rates and Estimates of Change

Rates and estimates of change presented in this release are calculated from whole unrounded  numbers. Due to rounding, these may differ from the rates and estimates of change calculated from the rounded volumes presented in the tables.

Interpretation of volume and rate changes

The overall change in the number of people employed, unemployed, in the labour force and not in the labour force is a function both of changes in the population as well as changes in the proportion of people with that status. Therefore, in interpreting changes in the volume of persons who are employed, unemployed etc, both changes in population and changes in the relevant rates should be considered.

In recent years there has been a natural decline in the number of people in younger age groups arising from the falling number of births through the 1980’s until 1994 when a low of 48,255 births was recorded (compared with 74,278 in 2009). For example there were 326,030 people born in Ireland between 1982 and 1986 and, all other things being equal, these people would have been in the 20-24 age group in 2006. However between 1986 and 1990 there were nearly 50,000 fewer births which would create a natural decrease in the 20-24 age group of close to 50,000 between 2006 and 2010.

In addition to natural changes in population, net migration has been a significant feature of population change in Ireland in recent years and net migration has also been most heavily concentrated in younger age groups. Evidence shows that migration is also most heavily concentrated in the 20-24 and 25-34 age groups. As a result of both natural decrease and net outward migration, the population of persons in the younger age groups has fallen and this should be borne in mind when considering the changes in the number of people in these age groups who are employed, unemployed and in the labour force.

Additional Data Series

Additional data series previously included in the QNHS release can still be accessed through the CSO website and are available here.

Labour market data can also be accessed from Statbank, the CSO’s main data dissemination service which can be accessed through the CSO website and are available here.

Implications of Census 2016 Final Results

The LFS results are weighted using population estimates which are updated every quarter. Every 5 years the Census of Population results are used to revise these population estimates, and QNHS/LFS results are revised as a consequence.

The population concept of usual residence is used for the LFS, i.e. all persons usually resident and present in the State plus absent persons who are usually resident in Ireland but are temporarily away from home and outside the State.

The final Census count was published on April 6 2017. The total for this usually resident population concept which was enumerated on Census Night, April 24 2016, was 4,739,597 persons, while the existing estimate for the usually resident population for April 2016 is 4,673,700 as detailed in the 2016 Population and Migration Estimates release. There is a difference, therefore, of just over 65,900 or 1.4% between the two figures.

The CSO has revised the population estimates for 2011 to 2016 based on this final Census count. Estimates of persons employed and unemployed have been revised in line with the higher population totals.

Changes to CSO Labour Market Statistics

Effective from Q3 2017, the QNHS has been replaced by a new Labour Force Survey (LFS).This is part of a major Household Survey Development (HSD) project that the CSO has been engaged in over the past number of years with the aim of expanding the range of social statistics to meet new needs for information on households and persons. This new survey includes the introduction of Computer Assisted Telephone Interviewing (CATI), a redesigned questionnaire and enhancements to the survey methodology.

The introduction of such large scale changes has inevitably led to discontinuity in some series and this is in line with international experience of introducing such large scale changes. Adjustments have been made to historic QNHS data to enable comparability with the new LFS for headline indicators. However as a result of changes to the questionnaire, the interview mode, the introduction of a new sample, data processing changes and other methodological enhancements there are changes in the levels of some series from Q3 2017 onwards. As a consequence, the series before and after the introduction of the new survey may not be directly comparable and users should therefore note this when examining annual and quarterly changes.

The first results from this new LFS were for Q3 2017. They incorporated the revision of population estimates arising from the 2016 Census of Population along with a back-cast series of the existing data for the QNHS to create a coherent time series – additional series were added to the back-casting to further enable comparability between the new and old series.

Participating Households

The Central Statistics Office wishes to thank the participating households for their co-operation in agreeing to take part in the survey and for facilitating the collection of the relevant data.

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