Labour Market Info and AnalysisLabour Market Info and ...

Labour Market Info and AnalysisLabour Market Info and Analysis Systems

Port of SpainNovember 2011

Employment TrendsI t ti l L b O i ti

Employment Trends www.ilo.org/trends

International Labour Organization Geneva, Switzerland

Overview

• Labour Market Information and Analysis (LMIA) systems:

– Definition & purpose– Components and levels – Sources of labour statistics – International examples and experience – Key Indicators of the Labour Market

• LMIA system development: key steps


LMIA systems Definition and purpose IDefinition and purpose I

Definition

A network of institutions (persons) with agreed roles to produce andwith agreed roles to produce and disseminate labour market information and analysisy


LMIA systems Definition and purpose IIDefinition and purpose II

(F1) Responsible for labour market analysis(F1) Responsible for labour market analysis • The Dutch Research Centre for Education and the

Labour Market (ROA) is a research institute of the M i h U i i S h l f B i dMaastricht University School of Business and Economics.

• Through its research the institute aims to improveThrough its research, the institute aims to improve the understanding of the relationship between education and the labour market; see: http://www roa unimaas nl/http://www.roa.unimaas.nl/


LMIA systems Definition and purpose IIIDefinition and purpose III

(F2) Responsible for monitoring and(F2) Responsible for monitoring and reporting on employment and labour policies

• Skills Development Planning Unit (SDPU) in South Africa’s Department of Labour; see: http://www.labour.gov.za/documents/useful-documents/skills-development/useful-documents/skills development/usefuldocuments

• Detecting skill needs and geographical (mismatches (e.g. LMIA at the provincial or

municipal level: Differences between Trinidad and Tobago)


g )

LMIA systems Definition and purpose IVDefinition and purpose IV

(F3) Mechanism to exchange information or(F3) Mechanism to exchange information or coordinate different actors and institutions that produce and utilise labour market information and analysis

• Advisory Panel for Pakistan’s LMIA system, see http://www lmis gov pk/Publications htmlsee http://www.lmis.gov.pk/Publications.html

• For instance: Assessing labour market impact of national disasters (floods in Pakistan, ( ,Thailand)


LMIA systems Components and levels IComponents and levels I

(C1) Collection and compilation of data and i f tiinformation– Database with standard set of indicators such as the

ILO’s Key Indicators of the Labour Market or theILO s Key Indicators of the Labour Market or the MDG employment indicators


LMIA systems Components and levels IIComponents and levels II

(C2) Analytical capacity and tools at three levels:- Monitoring labour markets (SDPU South Africa)Monitoring labour markets (SDPU, South Africa)- Analyzing relationships between variables/indicators (LMIA unit, Pakistan)

Econometric models (ROA Netherlands)- Econometric models (ROA, Netherlands)


LMIA systems Components and levels IIIComponents and levels III

(C3) Institutional arrangements and networks– Memorandum of understanding with statisticalMemorandum of understanding with statistical

agency– Agreed role of LMIA system in monitoring national

development plans– LMIA Advisory Panel


LMIA systems and statistics

statistics labour statistics

labour market information and analysisanalysis


Active and inactive population

Total populationTotal population

P l i P l ti tPopulation of working age

Population notof working age

Economically active Economically inactive population population

Employed Unemployed


Employed Unemployed

LMIA systemsSources of labour statisticsSources of labour statistics

• Surveys of households (‘persons’)Labour force survey– Labour force survey

– Population census– Income and expenditure survey

• Surveys of establishments (‘companies’)– Establishment survey of production– Employment and earnings survey– Occupational employment and vacancy survey

• Administrative data (‘records’)– Educational enrolment data– Migration records


– Employment services records

LMIA systemsSources of labour statisticsSources of labour statistics

Strengths Limitations

Sampling prevents reliable estimates for small

Household surveys

Comprehensive coverage of populationDetailed questioning permits precise measurement of statistical concepts for short reference periods

Sampling prevents reliable estimates for small groupsLower quality of data on income, “sensitive” and employer-related topicsCannot provide estimates of vacancies, t i i d ttraining needs, etc

Comprehensive coverage of larger businesses

Typically poor coverage of very small and unregistered businesses Requires constant updating of registers (births

Establishmentsurveys

businessesPayroll records provide consistent and reliable data for income and employment by industryOnly source for data on vacancies, t i i d t

and deaths)Difficult identification of small or informal unitsHigh non-response ratesSampling prevents reliable estimates for small groupstraining needs, etc groupsData items are limited by the information in establishment’s registers

Administrative Total count allows maximum detailOften poor coverageOften not up to date


records Inexpensive to compile statistics Often not up to dateData quality may be questionable

Strengths/limitations: implications for an LMIA systemfor an LMIA system

No single data source can meet all needs• No single data source can meet all needs

• Use all available sources as components of LMIAUse all available sources as components of LMIA system

• Know the sources of statistics & be aware of strengths and limitations


LMIA systemsWhat is not covered IWhat is not covered I

• No information on labour market regulation and ginstitutions:– Minimum wages

Unionization rates– Unionization rates– Employment protection legislation

• No information on labour market policies– Unemployment benefits

Activation policies (training job centers)– Activation policies (training, job centers)– In-work benefits


LMIA systemsWhat is not covered IIWhat is not covered II

• No information on the macro-economic environment– GDP (and its components)– Exchange and interest rates

Financial market conditions– Financial market conditions

• No information subjective indicatorsj– Social well-being– Main needs

Perception of government activities (red tape trust)– Perception of government activities (red tape, trust)


LMIA systemsWhat is not covered IIIWhat is not covered III

• Additional information is often essential to:– Analyse what factors drive employment and unemployment

rates– How policy makers can influence labour market dynamicsHow policy makers can influence labour market dynamics– What obstacles exist for employment creation– Which areas to target for policy interventions

• A need for wider data collection effort and collaboration– Involve research centers and other ministriesInvolve research centers and other ministries– Use of additional data sources (e.g. Decent Work Indicators)– Benefit from expertise of international agencies for cross-

country comparisons


country comparisons

Target groups & policy development

Function 1

Labour market

Function 2

Monitoring & reporting

Function 3

Information exchange and

Component 1 Component 2 Component 3

analysis on policies coordination

Component 1

Collection & compilation of

data and information

Component 2

Analytical capacity and

tools

Component 3

Institutional arrangements and networks

Third level LMIA system – econometric models

Second level LMIA system – analyzing relationships

First level LMIA system – tracking indicators

Employment Trends www.ilo.org/trendsSource 1 – household surveys Source 2 – establishment surveys Source 3 – admin records

First level LMIA system tracking indicators

LMIA Considerations: maximizing demand from end usersdemand from end users

• Relevance– Degree to which statistics and analysis meet

users’ needs• Timeliness

– Time elapsed between release of data and related reports

• Punctuality– Degree to which pre-announced releases

dates are met


LMIA Considerations: presentation & documentationpresentation & documentation

• Accessibilityy– Ease with which statistical data and analysis

can be obtained by users• Clarity

– Degree to which statistics and analysis are understandable for non-expert users

• Metadata & methodological documentation– Availability of information describing sources,

definitions and methods


Key steps in developing an LMIA systemsystem

• Establish appropriate institutional arrangements among labour market stakeholders on the scopeamong labour market stakeholders on the scope and modalities of the system

• Build consensus on data and information for a set of selected key labour market indicators

• Develop a labour market monitoring strategy, including specific analytical outputs (reports, etc)

• Develop technical capacity and infrastructure to collect analyze and disseminate appropriate datacollect, analyze and disseminate appropriate data and information

• Produce and disseminate data and analysis


yaccording to plan

LMIA systemsExperience and examples IExperience and examples I

• LMIA systems become more effective if data availability and quality improves across all three sources (S1 S2 and S3) and analytical capacity insources (S1, S2 and S3), and analytical capacity in the system advances, often in accordance with the level of development of a country and the resources th t d il bl t th LMIA tthat are made available to the LMIA system.

• See Decent Work Country Profiles Tanzania Brazil• See Decent Work Country Profiles Tanzania, Brazil, Ukraine, Austria, at: https://www.ilo.org/integration/lang--en/index.htm


LMIA systemsExperience and examples II

• Comprehensive systems with both analytical and policy f ti b d ti i d t t k t

Experience and examples II

functions based on time-series data take many years to develop

• Start with ambitious but feasible system (e.g. first level y ( gsystem, ‘tracking indicators’, with some additional analysis) N t i i P ki t (fi t l l t )• Note experience in Pakistan (first level system), see Pakistan Ministry of Labour and Manpower 2007-2010, Pakistan Employment Trends series (Islamabad), available at: http://www.lmis.gov.pk/Publications.html


LMIA systemsExperience and examples IIIExperience and examples III

• Note experience in Viet Nam (first level +Note experience in Viet Nam (first level employment projections), see Viet Nam Ministry of Labour, Invalids and Social Affairs, 2011, Viet Nam Employment Trends 2010, National Centre for Labour Market Forecast and Information B rea of Emplo mentand Information, Bureau of Employment (Hanoi), available at: http://www un org vn/en/component/docman/http://www.un.org.vn/en/component/docman/cat_view/126-un-publications-by-agency/93-ilo-


publications.html?orderby=dmdate_published

LMIA systemsExperience and examples IV• Many countries are using the MDG employment

indicators as a framework for LMIA often with a strong

Experience and examples IV

indicators as a framework for LMIA, often with a strong role of the statistical office

• Note experience Uganda, see http://www.ubos.org/index.php

• Policy function is desirable, and should be linked institutionally with government monitoring system (noteinstitutionally with government monitoring system (note experience in Burkina Faso - observatory and Tanzania –national monitoring system and development plans)


LMIA systemsKey development steps IKey development steps I

• Ensure agreement among stakeholders on:Functions (analytical policy)– Functions (analytical, policy)

– Level (monitoring indicators, advanced functions)– Resources (funding and staff)Resources (funding and staff)

• Plan institutional arrangements with labour market stakeholders of the system, a et sta e o de s o t e syste ,particularly statistical offices and departmentsof labour/education


LMIA systemsKey development steps IIKey development steps II

• Plan labour market monitoring (production)Plan labour market monitoring (production) strategy, including:• Data plan (sources)• Products (reports, websites, dissemination strategy)

• Plan and develop technical capacity and infrastructureinfrastructure


LMIA systemsTechnical considerations

• Data availability from sources of labour statistics?

Technical considerations

• Indicators in current economic and social plans such as national development plans?as national development plans?

• Selection of indicators?

• Preparation of data plan in terms of household and establishment surveys


LMIA systemsProcess considerations

• Establishment of a task group on LMIA system,

Process considerations

g p ycharged with leading the consultative process and ensuring stakeholder agreement involvement.

• Taskforce will produce:• Taskforce will produce:(a) Proposal outlining the functions, target group, planned analytical methods, sources of data and outputs of the LMIA t ll th i tit ti l t f thLMIA system, as well as the institutional set-up of the system, taking existing agreements into account.(b) Proposal for capacity building of the LMIA Unit.(c) Financial proposal.


An example of an LMIA: Using the KILM

• 7th Edition Key Indicators of the Labour

Using the KILM

7 Edition Key Indicators of the Labour Market (KILM) launched in October 2011

• 18 indicators of the labour market– Concepts, definitions, limitations, trends analysis

• Downloadable annual data from 1980-MRY– Spreadsheet, mapping, graphics

• Thematic analytical chapters


An example of an LMIA: Using the KILMUsing the KILM

Two versions of KILMTwo versions of KILM–Stand-alone software package, to

be downloaded from: http://www.ilo.org/kilmp g

I t t d t b (“KILMN t”)–Internet database (“KILMNet”)


LMIA systemsAvailability of Key IndicatorsAvailability of Key Indicators


Key Indicators of the Labour Market (KILM)

1. Labour force participation rate

2. Employment-to-population rate

(KILM)

3. Employment by status

4. Employment by sector

5 Employment by occupation10. Youth unemployment

11 L t l t5. Employment by occupation

6. Part-time workers

7. Hours of work

11. Long-term unemployment

12. Time-related underemployment

13. Inactivity8. Employment in the informal economy

9. Unemployment

13. Inactivity

14. Educational attainment and illiteracy

15. Average wages

16. Hourly compensation costs

17. Labour productivity

18 P t i di t ib ti d th


18. Poverty, income distribution and the working poor

KILM and downstream products

• ILO Trends Econometric Models– Global and regional estimates of key labour market– Global and regional estimates of key labour market

indicators including labour force participation, employment, unemployment, employment by sector and status labour productivity and working povertystatus, labour productivity and working poverty

• ILO Global Employment Trends series– Annual report launched in January– Special issues on women, youth, crisis impacts

• MDG Employment Indicator-related publicationsA l t l h d i J l b UNSD– Annual report launched in July by UNSD

• Country-level and cross-country studies (workingpapers and journal articles)


papers and journal articles)

An example of an LMIA system: Using the KILMUsing the KILM


An example of an LMIA system: Using the KILM: Thematic sectionsUsing the KILM: Thematic sections

A W ki t i th ld I t d i• A. Working poverty in the world. Introducing new estimates using household survey data

• B. Gender equality, employment and part-time work in developed economies

• C. A labour market analysis of Brazil using KILM and national datanational data


An example of an LMIA system: Using the KILM: Thematic section AUsing the KILM: Thematic section A

Working poverty in the world. Introducing new estimates using household survey data

P i l b l d i l i f h ki b d• Previous global and regional estimates of the working poor were based on a macroeconomic model utilizing a ‘top down’ approach

Key Indicators of the Labour Market 7th edition includes new• Key Indicators of the Labour Market, 7th edition, includes new household-survey based estimates of the working poor for 54 countries

• The dataset is used to produce revised global and regional estimates• The dataset is used to produce revised global and regional estimates on working poverty based on a new methodology


Regional coverage of national working poverty estimatesworking poverty estimates


Working poverty: Global and regional estimates IGlobal and regional estimates I

Model characteristics Previous model Current modelStep 1: Ratio of the working poverty rate (aged 15

d b ) t th t t l t t ( d 0Dependent variable

years and above) to the total poverty rate (aged 0 years and above)

Poverty rate for population aged 0 years and above

Step 2: Share of working poor aged 15 and above in total working-age (15+) populationS 1 E l l i i i f h

Independent variables

Step 1: Employment-to-population ratio; ratio of the working-age (15+) population to the total population; log of labour productivity, measured as output per worker

Independent variablesLog of per-capita GDP; country dummy variables

Step 2: Share of employment in agriculture; share of the population aged 25-54 years; log of labour productivity interacted with regional dummy variables; country dummy variables

Regression specification

Linear regression conducted separately for each region

Pooled linear regression (including all countries) with regional interaction variables

Methodology for generating working

Multiply estimated poverty rate by labour force (lower-

Estimated on the basis of above regression equations


generating working poverty estimate

bound) or working-age population (upper-bound)

Working poverty: Global and regional estimates IIGlobal and regional estimates II


An example of an LMIA system: Using the KILM: Thematic section BUsing the KILM: Thematic section B

Gender equality, employment and part-time work in developed economies

P i k (M/F) h b i i d l d i• Part-time work (M/F) has been growing in many developed economies; it is increasingly relevant in some developing economies as well

Growth in part time work has led to a more female employment but the• Growth in part-time work has led to a more female employment, but the relationship with gender equality is more ambiguous, as female part-time employment creates additional inequality in terms of average hours of work (and may crowd out full time employment)( y p y )

• Part-time work can contribute to both employment creation and gender equality if certain conditions are met (including those set out in


Convention 175)

An example of an LMIA system: Using the KILM: Thematic section CUsing the KILM: Thematic section C

A labour market analysis of Brazil using KILM and national data

R i f ll K I di f h L b M k i B il• Review of all Key Indicators of the Labour Market in Brazil

• Paper addresses questions such as to extent to which economic growth has been reflected in improved labour market outcomes ingrowth has been reflected in improved labour market outcomes in terms of employment, unemployment, informal employment, etc.

• Brazil is interesting because disaggregations are made for ethnic• Brazil is interesting because disaggregations are made for ethnic groups and rural/urban areas; such breakdowns are normally not available in the KILM


An example of an LMIA system: Using the KILM: IndicatorsUsing the KILM: Indicators


An example of an LMIA system: Using the KILM: Indicator 2Using the KILM: Indicator 2

KILM 2: Employment-to-population ratio

• Two series:– Nationally-reported estimates– Harmonized series of ILO estimates (using benchmark UN

pop lation estimates in combination ith indicators from nationalpopulation estimates in combination with indicators from national sources)

• Manuscript in KILM contains the following standardized sections• Manuscript in KILM contains the following standardized sections– Introduction (e.g. number of countries covered)– Use of the indicator (analytical purpose, interpretation)

Definition and sources (including reference to international– Definition and sources (including reference to international statistical standards)

– Limitations to comparability (e.g. in terms of age groups)– Trends


Trends


KILM 4: Employment by sector

• Four series:– Employment by aggregate sector (agriculture, industry, services; by

sex)Emplo ment b 1 digit sector (ISIC Re 4 2008 b se )– Employment by 1-digit sector (ISIC Rev. 4, 2008; by sex)

– Employment by 1-digit sector (ISIC Rev. 3, 1990; by sex)– Employment by 1-digit sector (ISIC Rev. 2, 1968; by sex)

• Manuscript in KILM contains the following standardized sections– Introduction (e.g. number of countries covered)

U f th i di t ( l ti l i t t ti )– Use of the indicator (analytical purpose, interpretation)– Definition and sources (including reference to international

statistical standards)Limitations to comparability (e g in terms of age groups)


– Limitations to comparability (e.g. in terms of age groups)– Trends


KILM 4: Figure 4c. Average sectoral growth rates, 1998-2008



KILM 5: Employment by occupation

• Two series:• Two series:– Employment by occupation (ISCO 88; by sex)– Employment by occupation (ISCO 68; by sex)

• Manuscript in KILM includes references to ISCO 08, but the KILM does not yet contain data based on the new classification

Some changes in ISCO 08 in comparison with ISCO 88 (box 5b):

• Occupations associated with information and communication technology have been updated and expanded, allowing for the identification of professional and associate professional occupations in this field as sub-major groups.

• Occupations concerned with the provision of health services have been expanded in order to provide sufficient detail to allow ISCO 08 to be used as


expanded, in order to provide sufficient detail to allow ISCO-08 to be used as the basis for the international reporting of data on the health workforce.


KILM 14: Educational attainment and illiteracy

• Four series:• Four series:

– Table 14a shows the distribution of the educational attainment of the labour force broken down by sex and by the following age cohorts whereverforce broken down by sex and by the following age cohorts wherever possible: total (15 years and over), youth (15 to 24 years), young adult (25 to 29 years) and adult (30 years and over)

– Table 14b shows the percentage distribution of a country’s total unemployed according to five levels of schooling - less than one year, preprimary level, primary level, secondary level, and tertiary level

– Table 14c provides information on the unemployment rate, that is, the share of the nemplo ed in the labo r force according to three gro pings ofof the unemployed in the labour force, according to three groupings of educational attainment: primary or less, secondary and tertiary

– Table 14d presents information on illiteracy rates – the percentage of illiterate persons in the population – for the total, youth and adult


illiterate persons in the population for the total, youth and adult populations


KILM 14: Educational attainment and illiteracy, Table 14a, distribution of the educational attainment of the labour force (figure 14a)


Relevant ILO publications• Global Employment Trends reports

http://www.ilo.org/trends

• ILO MDG Employment Indicators Guidehttp://www.ilo.org/empelm/what/lang--eng/WCMS_114244/index.htm

• ILO Decent Work Indicators (Measuring Decent Workinitiative)http://www.ilo.org/integration/themes/mdw/lang--en/index htmen/index.htm

• ILO Labour and Social Trends series (ILO Asia-Pacificregional office)


regional office)

Exercises

• What are the requirements for an LMIA? How qcould they be met in Trinidad?

• What LMIA elements are available in Trinidad? Wh t th l t i ht b f l t d t dWhat other elements might be useful to understand current labour market challenges? Which agency would be responsible for collecting and ou d be espo s b e o co ec g a ddisseminating them?

• How could collaborate with other research institutions foster data collection and dissemination?


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