Labor Statistics Research Paper

1. Topics And Classifications

Article 1 of Labor Statistics Convention Number 160 of the International Labor Office (ILO) established in 1985 a minimum set of topics to be covered in official national labor statistics programs (ILO 2000). The list is as follows.

(a) Economically active population, employment, where relevant unemployment, and, where possible, visible underemployment.

(b) Structure and distribution of the economically active population, for detailed analysis and to serve as benchmark data.

(c) Average earnings and hours of work (hours actually worked or hours paid for) and, where appropriate, time rates of wages and normal hours of work.

(d) Wage structure and distribution.

(e) Labor cost.

(f) Consumer price indices.

(g) Household expenditure or, where appropriate, family expenditure and, where possible, household income or, where appropriate, family income.

(h) Occupational injuries and, as far as possible, occupational diseases.

(i) Industrial disputes.

ILO convention 160 recommends that each member state (almost all countries are members of the ILO) ‘collect, compile, and publish basic labor statistics, which shall be progressively expanded in accordance with its resources to cover [these] subjects.’ The USA and most other developed nations collect and publish data for all subjects listed in Article 1. On the other hand, developing nations often do not yet have the full array of labor statistics. The publication Key Indicators of the Labour Market (Johnson et al. 1999) provides information about the availability of many of the basic labor statistics in almost all countries of the world. Deficiencies in the availability and timeliness of labor statistics are particularly apparent in Africa and parts of Asia.

1.1 National Classifications

The presentation of labor statistics requires many distinctions or categories such as occupations and branch of economic activity. In order to facilitate data collection and analysis, these categories are organized into classifications. These are instruments that group together units of a similar kind, often in hierarchies, thus allowing for different degrees of detail to describe the characteristics in a systematic and simplified way. For example, in the USA, the Standard Occupational Classification and the Standard Industrial Classification have been the structures that define occupations and industries for many years. Such systems need periodic revision to keep up with the changing economy and to accommodate new industries and occupations. Revising the Standard Occupational Classification System (1999) provides an account of the 1998 revision to the US occupational classification as well as a brief history of the industrial classification system.

The North American Industry Classification System (NAICS) represents a complete restructuring of the US industrial classification (1997). This system was prepared jointly because the North American Free Trade Agreement of 1994 increased the need for comparable statistics from the USA, Canada, and Mexico. Each country can individualize the new system to meet its own needs, as long as data can be aggregated to the standard NAICS categories.

1.2 Other International Classifications

International standard classifications serve to enhance cross-national comparisons. The International Standard Industrial Classification of all Economic Activities was established under the auspices of the United Nations, and the latest International Standard Classification of Occupations was established by the ILO’s 14th International Conference of Labor Statisticians in 1987. Summaries of these classifications appear in the appendices to the ILO’s Yearbook of Labour Statistics (1999). Countries often prepare concordances or ‘crosswalks’ that allow their national classifications to mesh with the international classifications.

1.3 International Concepts

The ILO’s periodic Conferences of Labor Statisticians have established guidelines for the measurement of many aspects of labor statistics (ILO 2000). These guidelines serve as a model for countries trying to develop national statistics on the topic concerned and they also provide, to some extent, a benchmark for international comparisons. For example, ILO standards for measuring labor force, employment, and unemployment are followed by many countries. Varying interpretations of these guidelines, however, particularly with regard to different aspects of unemployment, create differences across countries that require adjustments to enhance comparability of unemployment rates (Sorrentino 2000).

2. Institutional Framework

Labor statistics are primarily collected by governments rather than the private sector, although in some countries there has been a movement toward privatizing some data collections. In the USA, which has a decentralized statistical system, over 70 Federal agencies are engaged in the collection of statistics. The Bureau of Labor Statistics (BLS) in the US Department of Labor is the principal data-gathering agency of the US Federal Government in the broad field of labor economics. Most of the Bureau’s data come from voluntary responses to surveys of businesses or households conducted by BLS staff, by the Bureau of the Census (under contract to BLS), or in conjunction with cooperating State and Federal agencies.

Unlike the decentralized system of the USA, other countries tend to have central statistical offices, and the collection of labor statistics is accomplished within these national agencies. However, labor ministries often also play a role in the collection of labor statistics abroad.

Several international organizations work in the realm of labor statistics, obtaining and publishing labor information from countries, providing technical assistance to member countries, and establishing conceptual guidelines. National agencies cooperate with the international organizations by transmitting the data requested on a regular basis and also for ad hoc studies. Major international organizations involved in labor statistics are discussed in Sect. 6.

3. Sources Of Labor Statistics

Labor statistics are generally collected in censuses or sample surveys of households or business establishments, or processed on the basis of data resulting from administrative procedures of public agencies. Many of the major programs of the US BLS are based on sample surveys. For instance, the Current Population Survey (CPS) is a monthly survey based on a sample of about 50,000 households; data are collected by computer-assisted personal and telephone interviews. The survey is conducted by the Bureau of the Census for BLS and is the source of national statistics on the labor force, employment, and unemployment. About 70 countries conduct regular labor force surveys, on an annual, quarterly, or monthly basis.

Another major survey of BLS is the monthly Current Employment Statistics Survey. This survey is a sample of almost 400,000 establishments conducted by State employment security agencies in cooperation with BLS, and it provides employment, hours, and earnings data collected from payroll records of business establishments. Similar surveys are conducted by many other countries.

Labor statistics may also be based on administrative records. Although the primary purpose of administrative records is not the production of statistics, these systems provide a rich information source that has been exploited to varying degrees in different countries. Among the uses in the USA, administrative data from the Unemployment Insurance system are used in combination with CPS data to produce unemployment data for States, labor market areas, counties, and cities. In several European countries, employment office registrations are the primary monthly indicator of the labor market. This is likely to be the case in countries that do not have a monthly household survey as a source for unemployment statistics.

Some labor statistics are constructed by combining data from different sources. For example, industry labor productivity data (output per employee or per hour) require data on both labor input and business output. The labor input measures are generally constructed from a combination of hours data from labor force and establishment surveys, while the output components typically are based on national income and product accounts which are derived from business establishment surveys.

4. Dissemination Of Labor Statistics

Disseminating statistics means presenting and distributing the data to users in various forms and preparing analyses of the data. The BLS makes available the information it produces through a broad publication program that includes news releases, periodicals, reports, and bulletins. Articles in the Monthly Labor Review present analyses of labor data. Some BLS material is available on magnetic tape, computer diskette, CD-ROM, and microfiche. Current BLS data, publications, and articles are also made available through the Internet. Other countries use similar methods of data dissemination.

The publications Major Programs of the Bureau of Labor Statistics (1998) and the Handbook of Methods (1997), as well as the BLS web site noted in the Bibliography:, provide further information on the Bureau’s programs and how to obtain BLS data. Links to the statistical offices of other countries as well as to international organizations are included on the BLS web site.

In 1996, the International Monetary Fund established a Dissemination Standards Bulletin Board on a web site (IMF DSBB) to assist countries in following the best practices of dissemination of economic and financial data to the public. One of the aspects of this, the General Data Dissemination System (GDDS), guides countries in the provision of comprehensive, timely, accessible, and reliable data, and the site provides information on data produced and disseminated by participating member countries. The GDDS system is built around four dimensions—data characteristics, quality, access, and integrity. Information on the formats and titles of national statistical publications is included. The GDDS is a source of metadata (that is, descriptions of current practices on data concepts, sources, and methods) on labor statistics as well as on other types of economic statistics. The detailed metadata provide users with a tool to better assess the usefulness of the data for their own particular purposes.

5. International Comparisons

An international perspective can often enrich analysis of national labor markets, but such comparisons must be made with caution because statistical concepts and methods vary from country to country. Simply comparing national data across countries could lead to erroneous conclusions. The BLS and several international organizations derive meaningful comparisons by selecting a conceptual framework for comparative purposes; analyzing foreign statistical series and selecting those that most nearly match the desired concepts; and adjusting statistical series, where necessary and feasible, for greater inter-country comparability.

The BLS comparisons generally are based on US concepts so that they will be on the conceptual basis most familiar to US data users. Comparisons made by international organizations frequently are based on the international standards recommended by the ILO, discussed in section 2.3. Brief descriptions of the comparative programs of the BLS, three international organizations, and a unique international micro-database follow. Further information is available from their respective web sites, cited in the Bibliography:.

5.1 Bureau Of Labor Statistics

From its inception, BLS has published comparative information on labor conditions and developments abroad. Foreign labor research and statistical analyses have been undertaken because: (a) comparisons between US and foreign labor conditions shed light on US economic performance relative to other nations; (b) comparisons provide information on the competitive position of the USA in foreign trade, which has an important influence on the US economy and employment; (c) information on labor conditions published by a majority of foreign countries is not readily available to US labor representatives, employers, Government officials, and others, and frequently is not available in English; and (d) often, only an expert can judge the quality and comparability of foreign statistical data.

The BLS comparisons program currently covers three key areas: (a) labor force, employment, and unemployment; (b) manufacturing productivity and labor costs; and (c) manufacturing hourly compensation costs. Only major developed countries are covered in the labor force and productivity comparisons, whereas the hourly compensation comparisons cover 28 countries at various stages of development. Outside the USA, national statistical agencies generally do not produce their own international comparisons. They depend on the comparative work of the BLS as well as that of international bodies such as those described below.

5.2 International Labor Office

The ILO in Geneva plays a major role in the arena of international labor statistics. This agency’s role has already been mentioned in terms of promoting the production of labor statistics and setting international standards for statistics. The worldwide scope of the ILO’s membership ensures that this organization provides the most comprehensive geographic coverage among the international organizations involved in labor statistics.

The ILO has several publications or programs that provide varying degrees of comparable labor statistics. The annual Yearbook of Labour Statistics (ILO 1999) is the most comprehensive source for worldwide labor statistics. The Yearbook compiles national labor data according to international classifications of industry and occupation, with annotations concerning deviations from these classifications, coverage, and sources. However, no adjustments are made for conceptual differences in labor force measures. All data are supplied by the national statistical authorities. The Yearbook contains data on labor force, employment, unemployment, hours of work, wages, labor cost, consumer prices, occupational injuries, and strikes and lockouts. Some statistics are presented as time series, others are provided for only the latest year.

The ILO’s program of ILO-Comparable labor force statistics takes the process a step further by making adjustments of the labor force and unemployment data to ILO concepts for over 30 countries. Data from the ILO-Comparable program are available online (Lawrence 1999) and are also used in the publication Key Indicators of the Labour Market (Johnson et al 1999). The latter publication is well annotated concerning comparability issues for all of the 18 indicators provided.

5.3 Organization For Economic Cooperation And Development (OECD)

The Paris-based OECD comprises 29 member countries, most of which are the advanced countries in North America and Western Europe, as well as Australia, New Zealand, and Japan. In addition, some of the transition countries of Eastern and Central Europe, Mexico, and Korea became members of the OECD in the 1990s. Most OECD labor statistics cover the member countries only, but some series are being expanded to cover non-member Asian and Latin American countries.

The main labor-related publications of the OECD are the annual and quarterly editions of Labour Force Statistics (1999). The annual publication compiles two decades of statistics, while the quarterly editions show selected data for the past five years. These publications provide statistics on key elements of the labor force, rather than on the broader range of labor statistics contained in the ILO Yearbook. Through the OECD’s provision of extended time series, it is possible to identify structural changes that have taken place in the labor force of the countries with respect to gender, age, and economic activities. Data on part-time employment and duration of unemployment are included. The detailed statistics on employment are generally in conformity with the International Standard Industrial Classification.

Another program of the OECD, the Standardized Unemployment Rates, provides unemployment rates adjusted to ILO concepts for 24 member countries. The Standardized Rates are published in an annex to the aforementioned quarterly editions and they also are available from the OECD web site.

Additional labor statistics are published in the annual OECD Employment Outlook, expanding the range considerably to include special international analyses of training statistics, indicators of the degree of employment protection and regulation, trends in self employment, income distribution, minimum wages and poverty, the transition from education to the labor market, trends in working hours, and workforce aging, to name some of the special studies. The OECD analyses pay careful attention to comparability and often contain annexes that explain the data comparison issues in detail.

5.4 Statistical Office Of The European Communities (Eurostat)

Eurostat’s main role is to process and publish comparable statistical information for the 15 member countries of the European Union. Eurostat tries to arrive at a common statistical language that embraces concepts, methods, and statistical and technical standards. A significant portion of Eurostat’s statistics relates to labor. The Labor Force Sur ey (1998) is a joint effort by member states to coordinate their national surveys. The result is a detailed set of comparative data on employment, working time, and unemployment. Eurostat also publishes monthly harmonized unemployment rates for all member countries. Comparable data are critically important for the European Union because the Community’s social funds are distributed according to a formula that includes unemployment as a significant component.

Eurostat’s Harmonized Indices of Consumer Prices (HICPs) are designed for international comparisons of consumer price inflation. The HICPs are the result of the collaboration between Eurostat and national statistical offices of member states on harmonizing the different methods used to compile price indices. The harmonization process has resulted in an improved quality of the indices. HICPs are not intended to replace national consumer price indices (CPIs).

Besides the labor force survey and CPI statistics, Eurostat also publishes results from its harmonized labor cost surveys and conducts a European household panel that allows for analysis of income, employment, social exclusion, health, education, and many other topics.

5.5 Luxembourg Income Study (Lis)

The LIS, begun in 1983, is a unique cooperative international research project with a membership that includes 25 countries on four continents. The project is funded mainly by the national science and social science research foundations of its member countries. LIS comprises a collection of household income survey sets of microdata (files of data on individual households) for cross-country research. A companion database established in 1993 is the Luxembourg Employment Study, or LES. The data sets of LIS and LES have been harmonized in order to facilitate comparative studies. LIS and LES have become a rich source for comparative research in the areas of poverty and income distribution as well as labor market behavior. Moreover, these databases foster interdisciplinary research in the fields of economics, sociology, and political science. Researchers in member countries may use the LIS and LES databases at no charge, after signing a confidentiality agreement. Copies of the studies based on these databases are available from the LIS web site.

Disclaimer

All views expressed are those of the author and do not necessarily reflect the views of the Bureau of Labor Statistics.

Bibliography:

1. Eurostat (Statistical Office of the European Communities) web site: http://europa.eu.int/comm/eurostat/
2. 1998 Labour Force Survey. Eurostat, Luxembourg. International
3. Labor Office web site: http://www.ilo.org Johnson L Sorrentino C et al. (eds.) 1999 Key Indicators of the Labour Market. ILO, Geneva, Switzerland. Web site: http://www.ilo.org/public/english/employment/strat/KILM/in dex.htm
4. ILO 1999 Yearbook of Labour Statistics. ILO, Geneva, Switzerland. The statistics of the Yearbook are available online at http: laborsta.ilo.org
5. ILO 2000 Current International Recommendations on Labour Statistics. ILO, Geneva, Switzerland. The ILO’s conventions and recommendations are also available at the following web site: http://www.ilo.org/public/english/bureau/stat/standards/index/htm
6. International Monetary Fund Dissemination Standards Bulletin Board web site: http://dsbb.imf.org/
7. Lawrence S 1999 ILO-comparable annual employment and unemployment estimates. ILO Bulletin of Labour Statistics 3: XI–XLIII. The ILO-comparable data are available at the following website: http://laborsta.ilo.org
8. Luxembourg Income Study (and Employment Study) web site: http://www.lis.ceps.lu/index.htm
9. Office of Management and Budget 1997 North American Industry Classification System. Bernan Press, Lanham, MD
10. Organization for Economic Cooperation and Development web site: http://www.oecd.org. For the Standardized Unemployment Rates: http//www.oecd.org/media/new-numbers
11. 2000 Employment Outlook. OECD, Paris, France
12. 1999 Labour Force Statistics 1978–1998. Also Quarterly Labour Force Statistics. OECD, Paris, France
13. US Department of Labor Bureau of Labor Statistics (BLS) web site: http://stats.bls.gov. For the BLS international comparisons series: http://stats/bls.gov/flshome.htm
14. 1997 BLS Handbook of Methods. BLS Bulletin 2490, BLS, Washington, DC
15. 1998 Major Programs of the Bureau of Labor Statistics. BLS Report 919. BLS, Washington, DC
16. 1999 Revising the Standard Occupational Classification System. BLS Report 929, BLS, Washington, DC. This publication is available at the following web site: http://stats.bls.gov/pdf//socrpt929.pdf
17. Sorrentino C 2000 International unemployment rates: How comparable are they? Monthly Labor Review 6: 3–20. Web site: http://www.stats.bls.gov/opub/MLR/2000/06/contents. htm