What change is the Central Statistics Office introducing to the Monthly Unemployment Estimates release from reference month October 2019 onwards?

In an effort to reduce the frequency and scale of revisions to the Monthly Unemployment Estimates (MUE) series, from reference month October 2019 and on a quarterly basis thereafter (January, April, July and October), the Central Statistics Office (CSO) will use the latest available quarterly Labour Force Survey (LFS) benchmarks when compiling the MUE release, ahead of the LFS publication date.

For example, the October 2019 MUE release is being published today, November 5^th, 2019. Previously, the Quarter 2 (Q2) 2019 LFS benchmarks would have been used for this release. However, under the new methodology, LFS benchmarks for Q3 2019 have been used instead. This eliminates the need to revise the MUE series when the Q3 2019 LFS release is published on November 19^th, 2019.

Why is the CSO making this change?

There have been significant revisions to the MUE series for some quarters in the last couple of years when the latest LFS benchmarks were added into the compilation of the MUE series. The CSO are making this change to reduce the frequency and the scale of such revisions to the MUE series. It should be noted, however, that this change will not eliminate revisions to the MUE series in the future when new quarterly LFS benchmarks are added.

What effect will this change have for users of the MUE series?

This change will reduce the frequency of revisions to the MUE series. From now on there will only be 12 versions of the MUE series released by the CSO each year instead of 16 as is currently the case (12 MUE releases and four MUE revisions published as part of the LFS release each quarter).

The CSO also expects that this change will, in some cases, reduce the scale of revisions to the MUE series by reducing the maximum number of months of the MUE series which are being forecasted. Under the new methodology, estimates of monthly unemployment will now only be forecasted for a maximum of three months instead of up to four months. Prior to this change, the latest quarterly LFS benchmarks available for use for the October 2019 MUE release would have been from Q2 2019 (April, May, June). This meant that the results for July, August, September and October (four months) would have been forecasted for the October 2019 MUE release. The change in methodology means that the Q3 2019 LFS benchmarks have been used for the October 2019 MUE release. Thus, LFS results are available for July, August and September, i.e. the three months of Q3, and there is only a need to forecast forward for October 2019.

What are the quarterly benchmarks from the LFS?

The quarterly LFS benchmarks are the number of persons in employment and number of persons unemployed by age (aged under 25 years/aged 25 years and over) and sex (male/female) which are required to construct the MUE series. The benchmark categories are as follows:

• Employed males aged under 25 years
• Employed males aged 25 years and over
• Unemployed males aged under 25 years
• Unemployed males aged 25 years and over
• Employed females aged under 25 years
• Employed females aged 25 years and over
• Unemployed females aged under 25 years
• Unemployed females aged 25 years and over

What is the publication schedule for the MUE release?

The MUE release is usually scheduled for publication on the Tuesday following the last Thursday of the reference month (or the Wednesday if the week contains a Bank Holiday Monday). The exception to this is the December release which sometimes may be rescheduled to avoid New Year’s Eve/Day. 

Previously, when the quarterly LFS series was being published, the new quarterly LFS benchmarks were used to revise the MUE series. Updated tables for the revised MUE series were then published as an Annexe to the LFS release. Under the new methodology, the LFS benchmarks will already have been used for the MUE release prior to the LFS being published. As a result, there will no longer be a need to publish the MUE tables as an Annexe to the LFS release.

Is there anything else that the CSO could do to reduce the scale of revisions to the MUE?

The CSO are committed to working towards further reducing the scale of revisions to the MUE series. The methodology used by the CSO to compile the MUE series is one of a few methods approved by Eurostat. Statisticians from the Methodology and Labour Market sections of the CSO are working with experts from other National Statistical Institutes and Eurostat to review other approved methods for compiling the MUE series. Once these have been fully evaluated and tested, the CSO will determine whether any of these methods are more robust than what is currently used for Ireland. If a more robust method is found, the CSO will plan towards its implementation and inform users of any further changes.

How are the MUE currently compiled by the Central Statistics Office?

To calculate the monthly unemployment rate, an estimate of both the number of persons employed and the number of persons unemployed for each month up to and including the reference month are required. The CSO forecasts figures for the number of unemployed persons, using the ratio between the latest quarterly LFS benchmarks and Live Register (LR) figures. While the LR is not a measure of unemployment (as it includes people working 3 days or less) it follows a similar trend to the number of persons who are unemployed from the LFS (see figure 1 below). Thus, the trend of the total number of persons on the LR can be used to forecast forward the total number of persons unemployed. For the number of persons employed, LFS benchmarks are forecasted for the reference month.