Employment in the UK: March 2021

Estimates of employment, unemployment and economic inactivity for the UK.

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Cyswllt:
Email Bob Watson

Dyddiad y datganiad:
23 March 2021

Cyhoeddiad nesaf:
20 April 2021

2. Main points

  • November 2020 to January 2021 estimates show a smaller increase in the unemployment rate than recent increases, while the economic inactivity rate increased, as it did during the first coronavirus restrictions, and the employment rate continued to fall.

  • Although total hours worked continued to increase from the low levels in the previous quarter, the increase slowed in the latest quarter, with evidence suggesting a decrease towards the end of the period because of the impact of coronavirus restrictions.

  • The UK employment rate was estimated at 75.0%, 1.5 percentage points lower than a year earlier and 0.3 percentage points lower than the previous quarter.

  • The UK unemployment rate was estimated at 5.0%, 1.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter.

  • The UK economic inactivity rate was estimated at 21.0%, 0.6 percentage points higher than a year earlier and 0.3 percentage points higher than the previous quarter.

  • The total number of weekly hours worked was 968.0 million, down 83.1 million hours on the same period the previous year but up 8.0 million hours compared with the previous quarter.

  • The redundancy rate for the latest quarter was estimated at 11.0 people per thousand employees, which is down from the recent record high.

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3. Coronavirus and measuring the labour market

Latest Labour Force Survey (LFS) estimates are based on interviews that took place from the start of November 2020 to the end of January 2021. Interviews during November, December and January relate to the period when a number of the government lockdown measures aimed at protecting businesses and jobs during the coronavirus (COVID-19) pandemic were reintroduced.

Because of the coronavirus and the suspension of face-to-face interviewing on 17 March 2020, we had to make operational changes to the LFS, particularly in the way that we contact households for initial interview, which moved to a "by telephone" approach. These changes resulted in a response where certain characteristics have not been as well represented as previously. This is evidenced in a change in the balance of type of household that we are reaching. In particular, the proportion of households where people own their homes in the sample has increased and rented accommodation households has decreased.

To mitigate the impact of this non-response bias, in October 2020, we introduced housing tenure into the LFS weighting methodology for periods from January to March 2020 onwards. While not providing a perfect solution, this redressed some of the issues that had previously been noted in the survey results. More information can be found in Coronavirus and its impact on the Labour Force Survey and in our measuring the labour market during the pandemic blog.

The change in weighting methodology resulted in revisions to all LFS estimates published on 13 October 2020 for the periods January to March 2020 through to May to July 2020 and consequently had an impact on recent movements for a number of the published series. More information about the impact of the change in weighting on main LFS indicators published in October 2020 can be found in Dataset X08.

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LFS responses are weighted to official 2018-based population projections on demographic trends that pre-date the coronavirus pandemic. In our Coronavirus and the impact on payroll employment article we analyse the population totals used in the LFS weighting process and state our intention to make adjustments. Rates published from the LFS remain robust; however, levels and changes in levels should be used with caution. This will particularly affect estimates for country of birth, nationality, ethnicity and disability.

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4. Employment

Employment measures the number of people aged 16 years and over in paid work and those who had a job that they were temporarily away from. The employment rate is the proportion of people aged between 16 and 64 years who are in employment.

The International Labour Organization (ILO) definition of employment includes those who worked in a job for at least one hour and those temporarily absent from a job. Workers furloughed under the Coronavirus Job Retention Scheme or who are self-employed but temporarily not in work have a reasonable expectation of returning to their jobs after a temporary period of absence. Therefore, they are classified as employed under the ILO definition.

The estimated employment rate for people aged between 16 and 64 years had generally been increasing since early 2012, largely driven by an increase in the employment rate for women. However, there has been a decrease since December 2019 to February 2020, coinciding with the start of the coronavirus (COVID-19) pandemic (Figure 1).

For people aged between 16 and 64 years, for November 2020 to January 2021:

  • the estimated employment rate for all people was 75.0%; this is 1.5 percentage points down on the same period the previous year and 0.3 percentage points down compared with the previous quarter (August to October 2020)

  • the estimated employment rate for men was 78.2%; this is 2.3 percentage points down on the same period the previous year and 0.3 percentage points down on the quarter

  • the estimated employment rate for women was 71.8%; this is 0.7 percentage points down on the same period the previous year (the largest annual decrease since October to December 2010) and 0.3 percentage points down on the quarter

The single-month and weekly estimates of the employment rate over the three-month period suggest that the rate was lowest in December and may have increased slightly in January.

The increase in the employment rate for women in recent years is partly a result of changes to the State Pension age for women, resulting in fewer women retiring between the ages of 60 and 65 years. However, since the equalisation of the State Pension age, the employment rate for women had continued to rise, though it has now decreased because of the impact of the coronavirus (COVID-19) pandemic.

Imputation used for the Labour Force Survey (LFS) was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted methodology suggests the use of the existing methodology has little impact on the employment rate (approximately 0.2 percentage points). Further information can be found in Section 10: Measuring the data.

Estimates for November 2020 to January 2021 show 32.37 million people aged 16 years and over in employment, 611,000 fewer than a year earlier and down 147,000 on the quarter. The annual decrease was the largest since May to July 2009 and was mainly driven by men (down 438,000). However, there was also an annual decrease of 173,000 for women - the largest since December 1991 to February 1992.

More about economy, business and jobs

Age group

Looking at employment by age group, people aged 16 to 24 years and 35 to 49 years were the main drivers for the annual decrease in the number of people in employment in November 2020 to January 2021. People aged 35 to 49 years and those aged 65 years and over were the main drivers for the quarterly decrease.

The employment rate for those aged 16 to 24 years decreased by 4.7 percentage points on the year, and 0.5 percentage points on the quarter, to 50.8%. Meanwhile, the rate for those aged 35 to 49 years decreased by 0.7 percentage points on the year, and 0.4 percentage points on the quarter, to 84.9%. The rate for those aged 65 years and over also decreased by 0.7 percentage points on the year, and 0.4 percentage points on the quarter, to 10.5%.

Full-time and part-time employees and self-employed

Looking more closely at the quarterly decrease in employment, this was driven by decreases in the number of full-time self-employed people and part-time employees. The decrease in full-time self-employed people was largely driven by men, while the decrease in part-time employees was largely driven by women. The quarterly decrease was partly offset by an increase in full-time employees to a record high, which was mainly driven by women.

Employment status on the LFS is self-reported, with people classifying themselves as being either an employee or self-employed. Labour market flows estimates show that the recent increases in the number of employees and decreases in the number of self-employed people have been driven in part, by a movement of people from self-employed to employee status. Of those who move from self-employed to employee status, the number who had changed jobs has only increased slightly from normal levels. Consequently, some of the fall in self-employment since January to March 2020 comes from an increase in the number of people who have changed to classifying themselves as an employee, even though they have not changed jobs. However, the number of people in this group has decreased over recent periods and is now closer to more normal levels.

Temporarily away from job

From the way the Labour Force Survey (LFS) data are collected, it is possible to separate out responses relating to individual weeks during the survey period. We have developed a method for weighting the weekly LFS data to produce UK aggregates. The sample for any week is not representative, and the results are more volatile than the quarterly or monthly estimates. As such, their use is to show any large impact of a sudden change in labour market conditions and should not be used as a leading indicator.

The LFS collects information on those temporarily away from paid work that they expect to return to. These experimental weekly Labour Force Survey (LFS) estimates show that before the first lockdown the estimated proportion of people temporarily away from work (that is, the total number of people temporarily away from work divided by the total number of people in employment) was approximately 7.5%. These people could be away for a variety of reasons including sickness, maternity or paternity leave, holidays or economic reasons.

There was a large increase in both March and April 2020 in those stating that they were temporarily away from paid work, with nearly 28% away from work in the final week of April 2020. While the proportion of people temporarily away from work has fallen since its peak in April, it has still not dropped below 10%, and increased in November and again in December and January as a result of further national lockdowns.

In April 2020, several questions were added to the LFS questionnaire to gather additional information on the situation in the labour market during the coronavirus (COVID-19) pandemic. One question asks whether an employee is still being paid while their job is on hold and/or affected by the coronavirus pandemic; everyone answering this question will be defined as in employment.

Experimental weekly Labour Force Survey (LFS) estimates show approximately half a million employees received no pay while their job was on hold and/or affected by the coronavirus pandemic in April and May 2020. This decreased and had remained largely flat at around 200,000 since July 2020; however, it has increased over the last quarter to an average of just over 300,000 in December and January 2021.

Hours worked

Since estimates began in 1971, up until the introduction of the first coronavirus (COVID-19) lockdown measures, total hours worked by women had generally increased, reflecting increases in both the employment rate for women and the UK population. In contrast, total hours worked by men had been relatively stable because of falls in the employment rate for men, and increases in the share of part-time working, roughly offset by population increases.

Workers temporarily absent from a job as a result of the coronavirus pandemic would still be classed as employed, however, they would be employed working no hours. This directly impacted the total actual hours worked in November 2020 to January 2021. Since the average actual weekly hours are the average of all in employment, those temporarily absent from a job also impacted on those estimates. Even though lockdown restrictions were reintroduced during the November 2020 to January 2021 period, the estimates show an increase for hours worked in comparison with the previous quarter, although the increase has slowed with experimental weekly data suggesting a slight decrease in hours worked in January.

Between August to October 2020 and November 2020 to January 2021, total actual weekly hours worked in the UK saw an increase of 8.0 million, or 0.8%, to 968.0 million hours (Figure 2). Total hours worked for men saw an increase of 1.8 million, or 0.3%, to 564.8 million hours, and total hours worked for women saw an increase of 6.2 million, or 1.5%, to 403.2 million hours.

Average actual weekly hours worked saw an increase of 0.4 hours on the quarter to 29.9 hours. The average weekly hours worked by men saw an increase of 0.3 hours to 33.4 hours, while women's hours saw an increase of 0.5 hours to 26.0 hours.

Imputation used for the Labour Force Survey was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted methodology suggests that during the early stages of lockdown we were understating the full extent of the reduction in total hours. However, the latest estimates suggest the use of the existing methodology has little impact on total hours, with the experimental methodology now suggesting the actual number of hours is approximately 0.2% lower than stated.

Experimental weekly Labour Force Survey (LFS) estimates show a decrease in average actual hours for both employees and the self-employed in March 2020, with the largest decrease seen for those identifying as self-employed. Since May 2020, we have seen hours for both groups start to increase slowly; by the end of January 2021 the average actual hours worked by employees were around 30 hours per week, still slightly below the levels seen before the coronavirus pandemic. Self-employed hours have been more volatile than employee hours throughout the lockdown periods and, although they have increased since May, in January 2021 they were still well below the levels seen before the pandemic.

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5. Unemployment

Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed.

Estimated unemployment rates for both men and women aged 16 years and over had generally been falling since late 2013 but have increased over recent periods (Figure 3).

For people aged 16 years and over, for November 2020 to January 2021:

  • the estimated UK unemployment rate for all people was 5.0%; this is 1.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter

  • the estimated UK unemployment rate for men was 5.2%; this is 1.1 percentage points higher than a year earlier and 0.1 percentage points lower than the previous quarter

  • the estimated UK unemployment rate for women was 4.7%; this is 1.1 percentage points higher than a year earlier and 0.2 percentage points higher than the previous quarter

The single-month and weekly estimates of the unemployment rate suggest that the rate decreased slightly in January 2021.

Imputation used for the Labour Force Survey (LFS) was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted methodology suggests the use of the existing methodology has little impact on the unemployment rate (less than 0.2 percentage points). Further information can be found in Section 10: Measuring the data.

For November 2020 to January 2021, an estimated 1.70 million people were unemployed, up 360,000 on the same period the previous year and up 11,000 on the quarter.

There has been a decrease in short-term unemployment (those unemployed for up to six months) on the quarter, with the number in this group down by 83,000 compared with August to October 2020 (Figure 4). However, there has been an annual increase of 306,000 for those unemployed for up to 12 months, with the number of people unemployed for between 6 and 12 months increasing by 91,000 on the quarter. Meanwhile, the number of people in long-term unemployment (those unemployed for over 12 months) has increased by 54,000 on the year, and 3,000 on the quarter, to 360,000.

To estimate duration of unemployment, Labour Force Survey (LFS) respondents are asked how long they have been looking for work. Respondents are unlikely to discount short periods where they were not looking for work from this. Consequently, the increase in those unemployed for over 12 months is driven, in part, by those that briefly stopped looking for work in the earlier stages of the pandemic (and were therefore classified as economically inactive at that time) as they are likely to return to unemployment duration estimates in longer-term categories.

Looking at unemployment rates by industry of last job, between November 2019 to January 2020 and November 2020 to January 2021, there were increases for all industries except public administration and defence, and social security, financial, insurance and real estate activities, and agriculture, forestry, fishing, mining, and energy. The largest increase was for those previously employed in accommodation and food service activities, up 5.5 percentage points on the year to 10.9%, the highest unemployment rate across all industries. The second-largest increase was for those previously employed in administrative and support services, up 2.6 percentage points on the year to 7.1%.

The Claimant Count (Experimental Statistics)

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The Claimant Count is not a measure of unemployment. Changes in the Claimant Count will not be wholly because of changes in the number of people who are unemployed. There is more detail available in the Glossary.

The Claimant Count is an Experimental Statistic that seeks to measure the number of people claiming benefit principally for the reason of being unemployed.

To achieve this, the Claimant Count has generally been a count of the appropriate benefits within the UK's current benefit regime that best meet that criteria. Currently this is a combination of claimants of Jobseeker's Allowance (JSA) and claimants of Universal Credit (UC) who fall within the UC "searching for work" conditionality.

Those claiming unemployment-related benefits (either UC or JSA) may be wholly unemployed and seeking work, or may be employed but with low income and/or low hours, that make them eligible for unemployment-related benefit support.

Under UC a broader span of claimants became eligible for unemployment-related benefit than under the previous benefit regime. During the roll-out of UC since 2013, movements in the Claimant Count have been significantly affected by this expanding eligibility, rather than labour market conditions. This impact has led to the Claimant Count being reclassified to an Experimental Statistic.

As part of the UK government's response to the coronavirus (COVID-19) pandemic, a number of enhancements and easements have been made to UC, which impact the statistics. In addition, claimants are accessing UC as a "top-up" to government support packages (such as the Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme) to legitimately claim unemployment benefits whilst "furloughed". A proportion of those claimants will be employed under the International Labour Organization (ILO) definition - furloughed, or with low earnings or hours of paid work.

Consequently, while some of any movement in the Claimant Count would be because of changes in the number of people who are out of work, a certain amount of the movement will be because of changes in the number of people in work who are eligible for UC as part of the government response. We are not able to identify to what extent these two factors have affected the numbers.

The Claimant Count, as at 11 February 2021, increased to 2.7 million (Figure 5). This represents a monthly increase of 3.3% and an increase of 116.3%, or 1.4 million, since March 2020. The level has been relatively stable since May 2020.

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6. Economic inactivity

Economic inactivity measures people without a job but who are not classed as unemployed because they have not been actively seeking work within the last four weeks and/or they are unable to start work within the next two weeks. Our headline measure of economic inactivity is for those aged between 16 and 64 years.

Since comparable records began in 1971, the economic inactivity rate for all people aged between 16 and 64 years has generally been falling (although it increased during recessions). This is because of a gradual fall in the economic inactivity rate for women. This fall reflects changes to the State Pension age, resulting in fewer women retiring between the ages of 60 and 65 years, as well as more women in younger age groups participating in the labour market. Over recent years, the economic inactivity rate for men had been relatively flat but has increased since the start of the pandemic (Figure 6).

For people aged between 16 and 64 years, for November 2020 to January 2021:

  • the estimated economic inactivity rate for all people was 21.0% (the highest it's been since June to August 2019); this is up by 0.6 percentage points on the same period the previous year (the largest annual increase since February to April 2010) and up by 0.3 percentage points on the quarter

  • the estimated economic inactivity rate for men was 17.4% (the highest it's been since August to October 2011); this is up by 1.4 percentage points on the same period the previous year and up by 0.4 percentage points on the quarter

  • the estimated economic inactivity rate for women was 24.6%; this is down by 0.1 percentage points on the same period the previous year but up by 0.1 percentage points on the quarter

Imputation used for the Labour Force Survey was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted imputation methodology suggests the use of the existing methodology has little impact on the economic inactivity rate (less than 0.1 percentage points). Further information can be found in Section 10: Measuring the data.

The economic inactivity rate for young people (those aged 16 to 24 years) increased 3.6 percentage points on the year, and 0.7 percentage points on the quarter, to a record high of 40.7%. In comparison, over the last quarter, there was a decrease in the employment rate for young people while the unemployment rate for young people was largely flat (Figure 7). This suggests that more young people are staying in education and not looking for work, which is supported by the fact that the proportion of young people in full-time education has reached record highs during the pandemic, at around 46%.

Estimates for November 2020 to January 2021 show 8.71 million people aged between 16 and 64 years not in the labour force (economically inactive). This was 279,000 more than a year earlier, which was the largest annual increase since February to April 2010 and was driven by men (up 296,000), who reached a record high of 3.60 million.

Economic inactivity had been relatively flat for the last two quarters but has increased by 108,000 compared with August to October 2020, coinciding with the introduction of further national lockdown measures. This is similar to the large increases in economic inactivity we saw at the time of the first lockdown.

In terms of reasons for economic inactivity (Figure 8), the annual increase was largely driven by:

  • those who state they are economically inactive because they are students (up 231,000 to a record high of 2.42 million), with this group also largely driving the quarterly increase in economic inactivity as they did during the summer

  • those who are economically inactive because of "other" reasons (up 205,000 on the year to 1.14 million), although the numbers in this group are little changed on the quarter

The annual increase was offset somewhat by the large decrease in people (mainly women) who were economically inactive because of looking after family or home (down 267,000 on the year to a joint record low of 1.60 million).

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7. Redundancies

The redundancy estimates measure the number of people who were made redundant or who took voluntary redundancy in the three months before the Labour Force Survey interviews; it does not take into consideration planned redundancies. So, in this release, the latest estimates may relate to redundancies over the period from the beginning of September 2020 to the end of January 2021.

In November 2020 to January 2021, reports of redundancy in the three months prior to interview increased by 7.2 per thousand on the year, but decreased by 2.3 per thousand on the quarter, to 11.0 per thousand (Figure 9).

Looking at redundancy rates by different characteristics in the three months prior to interview in November 2020 to January 2021:

  • the age group with the highest redundancy rate was those aged 50 years and over, up 8.4 per thousand on the year, but down 0.6 per thousand on the quarter, to 12.8 per thousand

  • the region of residence with the highest redundancy rate was London, up 14.4 per thousand on the year, and up 5.7 per thousand on the quarter, to 17.8 per thousand

The redundancy rate for the administrative and support services industry increased 24.8 per thousand on the year, and 10.0 per thousand on the quarter, to 34.2 per thousand. It is the industry with the highest annual and quarterly increases, and the industry with the highest redundancy rate overall. In the previous quarter (August to October 2020), accommodation and food services and other service industries had the highest redundancy rates, but rates in these industries have now fallen.

Experimental weekly Labour Force Survey (LFS) estimates show that the number of people reporting redundancy in the three months prior to interview had been increasing since June 2020 and peaked in September. The number has gradually decreased since then but in January 2021 was still at a higher level than before the pandemic.

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8. Employment in the UK data

Employment, unemployment and economic inactivity
Dataset A05 SA | Released 23 March 2021
Estimates of UK employment, unemployment and economic inactivity broken down into age bands.

Full-time, part-time and temporary workers
Dataset EMP01 SA | Released 23 March 2021
Estimates of UK employment including a breakdown by sex, type of employment, and full-time and part-time working.

Actual weekly hours worked
Dataset HOUR01 SA | Released 23 March 2021
Estimates for the hours that people in employment work in the UK.

Unemployment by age and duration
Dataset UNEM01 SA | Released 23 March 2021
Estimates of unemployment in the UK including a breakdown by sex, age group and the length of time people are unemployed.

Economic inactivity by reason
Dataset INAC01 SA | Released 23 March 2021
Estimates of those not in the UK labour force measured by the reasons given for economic inactivity.

Labour Force Survey sampling variability
Dataset A11 | Released 23 March 2021
Labour Force Survey (LFS) sampling variability (95% confidence intervals).

Labour Force Survey single month estimates
Dataset X01 | Released 23 March 2021
Labour Force Survey (LFS) single-month estimates of employment, unemployment and economic inactivity have been published by the Office for National Statistics (ONS) since 2004. Not designated as National Statistics.

Labour Force Survey weekly estimates
Dataset X07 | Released 23 March 2021
Labour Force Survey (LFS) weekly estimates of employment, unemployment, economic inactivity and hours in the UK. All estimates are calculated from highly experimental weekly Labour Force Survey datasets.

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9. Glossary

Actual and usual hours worked

Statistics for usual hours worked measure how many hours people usually work per week. Compared with actual hours worked, they are not affected by absences and so can provide a better measure of normal working patterns. For example, a person who usually works 37 hours a week but who was on holiday for a week would be recorded as working zero actual hours for that week, while usual hours would be recorded as 37 hours.

Claimant Count

Enhancements to Universal Credit as part of the UK government's response to the coronavirus mean that an increasing number of people became eligible for unemployment-related benefit support, although still employed.

Consequently, changes in the Claimant Count will not be wholly because of changes in the number of people who are unemployed. We are not able to identify to what extent people who are employed or unemployed have affected the numbers.

Economic inactivity

People not in the labour force (also known as economically inactive) are not in employment but do not meet the internationally accepted definition of unemployment because they have not been seeking work within the last four weeks and/or are unable to start work in the next two weeks. The economic inactivity rate is the proportion of people aged between 16 and 64 years who are not in the labour force.

Employment

Employment measures the number of people in paid work or who had a job that they were temporarily away from (for example, because they were on holiday or off sick). This differs from the number of jobs because some people have more than one job. The employment rate is the proportion of people aged between 16 and 64 years who are in employment. A more detailed explanation is available in our guide to labour market statistics.

Unemployment

Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (that is, those in work plus those seeking and available to work) who are unemployed.

A more detailed glossary is available.

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10. Measuring the data

This bulletin relies on data collected from the Labour Force Survey (LFS), the largest household survey in the UK.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the LFS QMI.

The LFS performance and quality monitoring reports provide data on response rates and other quality-related issues for the LFS.

Coronavirus

For more information on how labour market data sources are affected by the coronavirus (COVID-19) pandemic, see the article published on 6 May 2020, which details some of the challenges that we have faced in producing estimates at this time.

An article published on 11 December 2020 compares our labour market data sources and discusses some of the main differences.

Our latest data and analysis on the impact of the coronavirus on the UK economy and population are available on our dedicated coronavirus web page. This is the hub for all special coronavirus-related publications, drawing on all available data. In response to the developing coronavirus pandemic, we are working to ensure that we continue to publish economic statistics. For more information, please see COVID-19 and the production of statistics.

LFS responses are weighted to official 2018-based population projections on demographic trends that pre-date the coronavirus pandemic. In our Coronavirus and the impact on payroll employment article we analyse the population totals used in the LFS weighting process and state our intention to make adjustments. Rates published from the LFS remain robust; however, levels and changes in levels should be used with caution. This will particularly affect estimates for country of birth, nationality, ethnicity and disability.

Impact of the coronavirus on data collection

The LFS design is based on interviewing households over five consecutive quarters. Generally, the first of these interviews, called Wave 1, takes place face-to-face, with most subsequent interviews, for Waves 2 to 5, conducted by telephone.

During March, we stopped conducting face-to-face interviews, instead switching to using telephone interviewing exclusively for all waves. This initially caused a significant drop in response.

New measures have been introduced to improve this, which have increased sample sizes, although they are still below normal LFS sample sizes

Impact of the coronavirus on survey imputation methodology

The normal imputation for non-response to the LFS relies on rolling forward previous responses. Although this method is adequate under normal circumstances, it is not designed to deal with the changes experienced in the labour market in recent months. A new experimental imputation methodology has been researched to improve the measurement of the labour market at this time.

Because of time and system constraints, it has not been possible to fully integrate this methodology into the results within this release, but early indications suggest that:

  • there is little impact from the use of existing methodology on the headline measures of employment, unemployment and economic inactivity (less than 0.3 percentage points)

  • there is little impact from the use of existing methodology on total hours, with measures relating to total hours in this release understating the actual number of hours worked by approximately 0.2%

We hope to include more information in later releases as this work develops.

Impact of the coronavirus on survey weighting methodology

Because of the impact on data collection, different weeks throughout the quarter have different achieved sample sizes. To mitigate this impact on estimates the weighting methodology was enhanced to include weekly calibration to ensure that samples from each week had roughly equal representation within the overall three-month estimate. This meant that any impacts seen from changes in the labour market in those weeks would be fully represented within the estimates.

Because of the suspension of face-to-face interviewing in March 2020, we had to make operational changes to the LFS, particularly in the way that we contact households for initial interview, which moved to a "by telephone" approach. These changes have resulted in a response where certain characteristics have not been as well represented as previously. This is evidenced in a change in the balance of type of household that we are reaching. In particular, the proportion of households where people own their homes in the sample has increased and rented accommodation households has decreased.

To mitigate the impact of this non-response bias we have introduced housing tenure into the LFS weighting methodology for periods from January to March 2020 onwards. While not providing a perfect solution, this has redressed some of the issues that had previously been noted in the survey results. More information can be found in an article Coronavirus and its impact on the Labour Force Survey.

Impact of government measures to protect businesses on the Labour Force Survey estimates

During late March, the government announced a number of measures to protect UK businesses. This included the Coronavirus Job Retention Scheme (CJRS), also referred to as furloughing, and the Self-Employment Income Support Scheme (SEISS).

The Office for National Statistics (ONS) classifies people within the labour market in line with International Labour Organization (ILO) definitions. Under the ILO definition, employment includes employed persons "at work", that is, those who worked in a job for at least one hour; and employed persons "not in work" because of temporary absence from a job, or a change to working time arrangements.

Under the current schemes it is likely that workers would have an expectation of returning to that job and would consider the absence from work as temporary. Therefore, those people absent from work under the current schemes would generally be classified as employed under ILO definitions.

In many cases, however, they would be employed but not in work. This absence would have an impact on the total hours worked. This would also be reflected in the average actual hours worked, which are based on the average hours per person employed, rather than the average hours per person at work. While actual hours would be significantly affected, there is unlikely to be any impact on usual hours, which would reflect normal working patterns.

End of EU exit transition period

As the UK enters into a new Trade and Cooperation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision makers have the data they need to be informed.

As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, the ONS is making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK's well-established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available early this year.

We will continue to produce our labour market statistics in line with the UK Statistics Authority's Code of Practice for Statistics and in accordance with International Labour Organization (ILO) definitions and agreed international statistical guidance.

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11. Strengths and limitations

Uncertainty in these data

The estimates presented in this bulletin contain uncertainty.

The figures in this bulletin come from the Labour Force Survey (LFS), which gathers information from a sample of households across the UK rather than from the whole population. The sample is designed to be as accurate as possible given practical limitations such as time and cost constraints. Results from sample surveys are always estimates, not precise figures. This can have an impact on how changes in the estimates should be interpreted, especially for short-term comparisons.

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The data in this bulletin come from the Labour Force Survey, a survey of households. It is not practical to survey every household each quarter, so these statistics are estimates based on a large sample.

As the number of people available in the sample gets smaller, the variability of the estimates that we can make from that sample size gets larger. Estimates for small groups (for example, unemployed people aged between 16 and 17 years), which are based on small subsets of the LFS sample, are less reliable and tend to be more volatile than for larger aggregated groups (for example, the total number of unemployed people).

In general, changes in the numbers (and especially the rates) reported in this bulletin between three-month periods are small and are not usually greater than the level that can be explained by sampling variability. Short-term movements in reported rates should be considered alongside longer-term patterns in the series and corresponding movements in other sources to give a fuller picture.

Comparability

The data in this bulletin follow internationally accepted definitions specified by the International Labour Organization (ILO). This ensures that the estimates for the UK are comparable with those for other countries.

The concept of employment (measured by the LFS as the number of people in work) differs from the concept of jobs, since a person can have more than one job and some jobs may be shared by more than one person. The LFS, which collects information mainly from residents of private households, is the preferred source of statistics on employment. The workforce jobs (WFJ) series, which is compiled mainly from surveys of businesses, is the preferred source of statistics on jobs by industry, since it provides a more reliable industry breakdown than the LFS. During the coronavirus (COVID-19) pandemic, the LFS and WFJ series may have additional differences because a person's perception of their attachment to a job may differ from the business's perception of that job. It is also important to note that the LFS is based on interviews throughout the coverage period, whereas the WFJ series relates to a specific date. This difference can be significant in a labour market that is experiencing rapid changes.

LFS responses are weighted to official population projections. As the current projections are 2018-based they are based on demographic trends that pre-date the COVID-19 pandemic. We are analysing the population totals used in the weighting process and intend to make adjustments where appropriate. The annual reconciliation report of job estimates article, which compares the latest WFJ estimates with the equivalent estimates of jobs from the LFS and is usually published every March, has been postponed until further adjustments are implemented.

Further information is available in A guide to labour market statistics.

Notes:

  1. The sampling variability estimates are for 95% confidence intervals and are calculated on data that are not seasonally adjusted.

  2. These data are part of Dataset A11: Labour Force Survey sampling variability, which is part of the Labour market overview, UK release.

  3. Labour Force Survey (LFS) responses are weighted to official population projections. As the current projections are 2018-based they are based on demographic trends that pre-date the COVID-19 pandemic. We are analysing the population totals used in the weighting process and intend to make adjustments where appropriate. Rates published from the LFS remain robust; however, levels and changes in levels should be used with caution. This will particularly affect estimates for country of birth, nationality, ethnicity and disability.

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Bob Watson
labour.market@ons.gov.uk
Ffôn: +44 (0)1633 455070