Today we are reintroducing Labour Force Survey data and providing information to users ahead of its inclusion in next week’s monthly Labour Market Statistics publication. In line with other countries, the ONS has been facing the challenge of falling response rates for many of our household surveys in recent years. Here Liz McKeown explains how since suspending our Labour Force Survey estimates, in line with our improvement plan, we’ve improved these data by using more up to date information about the UK population and summarises the picture that they now paint when viewed alongside our other measures of the UK’s jobs market.
Since suspending the LFS in the autumn we have now restarted face-to-face interviews, put on hold during the pandemic, increased the incentives for people who take part in the survey and, from January’s data collection, boosted the sample size. We have also improved the adjustments made for those who don’t respond, and updated these estimates to be based on the latest ONS population levels and structure.
Today’s publication outlines how these population figures have affected our LFS estimates. Using the new population estimates has increased the total number of people in the estimates so we have seen increases in all of the headline labour market measures. However, there have also been changes in the structure of the population. We now have a greater proportion of women and as their employment rate is lower than that for men, we see a reduction in the overall employment rate. We also see a greater proportion of 16 to 24 year-olds, which leads to higher unemployment and economic inactivity rates.
It is also worth noting that because of the reduced response rates, we would expect (and are still seeing) more sampling variability than was historically the case between each quarter’s figures. As the number of responses grows with the increased sample size feeding through into published figures over the next few months, we expect these quarterly movements to become less volatile.
In the short term we recommend caution when interpreting quarterly changes. However, our new LFS estimates suggest the number of people in work has stayed broadly stable over the last five months, with a slight rise in the number of people neither in work nor available to start work, and a slight fall in those not in work but who are seeking employment. However, some uncertainty remains in these estimates.
We would recommend using the LFS data alongside our other measures of the labour market, particularly Workforce Jobs (which asks employers about the number of people working), claimant count (which shows the number of jobseekers) and the RTI data from HMRC we publish (which shows the number of employees on payroll) to create a holistic picture of the UK labour market.
It is important for us to publish the results of the Labour Force Survey when possible – despite the challenges with response rates – as there is strong user need for these data. In particular for information that only the LFS can provide such as on the self-employed and those who are ‘economically inactive’, including those who are long-term sick.
While we are working hard to improve our LFS-derived data, it remains our plan to make the transformed Labour Force Survey (TLFS) our main measure for the UK labour market. The TLFS is an online-first survey that asks many more people about their employment status. While early returns from this survey look positive, we need a longer consistent time series to aid interpretation before we share these data with users.
We therefore plan on publishing indicative TLFS data in July, which will allow users to compare it with LFS responses over a six-month period, with the TLFS becoming our main source of information on the UK labour market from September.
Collecting and publishing robust data using household surveys is clearly more challenging than it once was, but at the ONS we remain focused on producing the high-quality information on the labour market and other aspects of our changing society and increasingly digital economy that our users need.
Liz McKeown is Director of Economic Statistics at the Office for National Statistics.