Labour Market in the CR

EXPLANATORY NOTES ON METHODOLOGY

Contents

Links to international standard

The contents of main concepts used in the release are in full harmony with the definitions of indicators listed in the "Resolution concerning statistics of the economically active population, employment, unemployment and underemployment", adopted by the 13th Interna­tional Conference of Labour Statisticians, October 1982. The resolution contains comprehen­sive definitions and recommendations of ILO to monitor labour market characteristics. Also other obligatory international standards, in particular more specifically focussed ILO resolutions and international classifications and nomenclatures related to labour market issues, have been taken into account in the survey.

Methodology of LFSS indicators

Based on the above-mentioned resolution of the ILO of October 1982, the population can be split, according to the relation to labour market, into basic categories. These are shown in the table below, which also indicates relative representation of individual groups in the Czech Republic (the 4th quarter of 2006).

The basic and key criterion for placing a respondent in a particular group is always the respondent’s actual activity in the labour market in a reference week and not the respondent’s usual status.

Definitions of individual LFSS indicators are only focussed on basic indicators which are connected with population aged over 15 (younger persons are always taken for economically not active). Important features quantified in relevant blocks of tables are monitored in each of the population groups mentioned above. The meaning of these specific indicators is not described for their extensiveness. It is either evident (the indicator is self-explanatory) or can be obtained from the CSO, if need be.

Activity status

The activity status refers to the basic division of population aged 15 and more by classification in labour market. The population is broken down into economically active population (i.e., employed and unemployed) and economically not active population.

Employment

The 15th International Conference of Labour Statisticians, 1993 adopted the revised International Classifi­cation of Status in Employment (ISCE-93). This classification created the fundamental terminology for particular groups of the employed. The ISCE-93 groups of employers and own-account workers roughly correspond to the LFSS groups of the self-employed with employees and the self-employed without employees, respectively.

As employed are considered all persons aged 15 or more who belonged to paid employed persons or were in own business during the reference week. It does not matter whether their working activity was of a permanent, temporary, seasonal or occasional character or if they held only first or second jobs. For the purposes of the Survey, the concept of work is used for work taking at least one hour in the reference week. Also apprentices who receive wage, salary or remuneration like other persons are considered as employed. The same holds good for students, housepersons and other persons engaged above all in other than economic activities and were employed in the reference period. On the other hand, persons on additional child-care leave, whose status is of a different character according to the ILO methodology, are not automatically included in the group of employed. According to the group of included persons the employed in national economy and employed in civil sector are distinguished. The latter does not include regular and temporary members of the armed forces. Crucial for the affiliation to industries is the economic activity of the workplace.

Employees are all persons with formal relationship to job regardless the fact if they really worked or not in the reference week. By the formal relationship to job primarily the employment is seen (in current legislative arrangement the employment contract, nomination or election), further the other contracts out of the regular employment, e.g. on limited number of hours and possibly the other contracts out of labour law are considered. According to ILO also armed forces (professionals and till the year 2004 conscripts on military service) are included among employees, this group is included to the total employment in national economy.

Members of producers´ cooperatives are considered as the separate category. For the needs of the international comparison they are united with the group of employees as recommended by ILO.

Employed in own business are employers (self-employed with employees) and own-account workers (self-employed without employees). As employed in own business also the contributing family members are considered regardless the number of hours worked during the reference week.

Unemployment

The unemployed - comprise all persons aged 15+ who satisfied all of the following three conditions during the reference period:

• were without work - i.e., were in neither employ­ment nor self-employ­ment,
• were actively seeking work. The active form of seeking work includes registration with a labour office or private employ­ment exchange, checking at work sites, farms, market or other assembly places, placing or answering newspaper advertise­ments, taking steps to establish own business, applying for permits and licenses, or looking for a job in a different manner,
• were currently available for work - i.e., were avail­able during the reference period for paid employment or self-employment immediately or within 14 days.

If the persons fail to meet even one of the conditions above, they are classified as employed or economically not active. The only exception are persons who do not seek work, because they have found it already, but their commencement of work is fixed for 14 days at the latest. These persons are also classified to the unemployed by Eurostat definition.

It is necessary to distinguish unemployed as defined above from the job seekers registered by Labour Offices. This discrepancy between number of LFS unemployed and number of job applicants kept by the Ministry of Labour and Social Affairs has been appearing for a long time. Beside the different methodological definition of indicators, this fact is a consequence of other factors:

• The CZSO included the question on so called main status (means usual economic status) already in 1993. This question preceded the questions relating to reference week and thus influenced the answers of respondents on their real economic activity in reference period to some extent. Eurostat inserted the question on main status into its standard in 1998 as coming after the questions relating to the reference week. From 1 January 2002 the LFS questionnaire was fully harmonised with Eurostat´s standard including the order of asking the questions to the respondents. Now the priority is the question on economic activity of respondent in the reference week. If the respondent stated that worked at least 1 hour in the reference week, s/he is strictly classified as person in employment according to the ILO methodology. Unlike the structure of questionnaire valid until 2001, the current arrangement authorizes to the assumption that positive answer on employment in the reference week influences following answers on the questions on main status and especially the registration in Labour Offices to some extent.

  Regarding the need of keeping the anonymous data and optionality of participation in the LFSS, the CZSO has no possibility to compare the surveyed data with other sources, e.g. with the evidence of Labour Offices. From the trend of difference between the number of persons registered by Labour Offices and the number of this persons measured by LFSS is possible to judge that influence of change in questionnaire content proved in reduction of the unemployed persons in LFSS in range form 30 to 50 thousand.

• From 2000 the number of households that were not surveyed grew up and the situation got more difficult especially after Population Census 2001. Relatively higher rate of nonresponse is caused by high share of empty flats in sample and mainly categorical refusals of cooperation. It is possible to assume that social structure of households, which refused the cooperation can partly differ from the structure of interviewed households and the group of unemployed who refuse to communicate can be over-represented among them. Since 2004, thanks to more intensive process of contact with households of respondents used by field-workers of Statistical Office the non-response decreased.

However, in the last years there is a trend of convergence between general unemployment rate by ILO and the registered unemployment rate by the Ministry of Labour and Social Affaires of the CR. The difference in data on unemployment between both sources is usual also in Member States and other Candidate Countries of EU. At the same time it is necessary to remark that some Member States of EU do not disseminate both unemployment rate officially.

Relative indicators

Methodological changes in the contents of activity status categories influence the value of relative indicators. With this in mind, one should view trends in individual relative indicators governed by comparable methodology. In the publication of time series the methodological differences were erased.

Unemployment rates are calculated as the ratio of the unemployed (numerator) to total labour force (denominator).

General unemployment rate (ILO) is an indicator derived from LFSS results in compliance with international definitions and recommen­dations. Both the numerator and the denominator use surveyed persons according to their place of stay.

Specific unemployment rates are indicators which describe unemploy­ment in a certain social, age or other group of population.

Participation rate is calculated as the ratio of the employed and unemployed (labour force) to total population aged 15+.

Other special indicators

Labour force: all persons aged 15+ who satisfy the require­ments for inclusion among the employed or the unemployed.

Population economically not active (persons not included in the labour force): all persons who were not employed during the reference period and who do not fulfill three basic conditions of unemployment defined by ILO. Economically not active population includes e.g. children in pre-school age, persons attending various educational institutes, normally retired persons, long-term disabled or invalid persons etc. It includes also applicants for employment registered in labour office but not able to start a job in 14 days. Further this group includes persons on parental leave, unless they meet conditions for being classified as employed or unemployed..