Information Note - Implications of COVID-19 on the Labour Force Survey - Quarter 2 2020 Update

Introduction

The COVID-19 pandemic in Ireland has affected the Labour Force Survey (LFS) in several ways. The Labour Market Analysis area of the Central Statistics Office (CSO) published an information note in May alongside the LFS release for Quarter 1 (Q1) 2020 to outline to users of the LFS what impacts they can expect to see in the LFS release for the duration of the COVID-19 crisis. For further information see Information note. This document is an update to that information note to ensure that it is relevant and up to date for consideration alongside the LFS results for Q2 2020. This information note will be updated if and when required in the future to safeguard its relevance.

The collection of data for the LFS continues to be affected by COVID-19 and full details regarding the change in data collection mode, and how the CSO are dealing with it, are presented below.

A range of measures were introduced by the Government to provide income support for those whose employment has been affected due to the COVID-19 pandemic in Ireland. The available schemes are being administered by the Department of Employment Affairs and Social Protection (DEASP) and the Revenue Commissioners, and a significant number of persons are now in receipt of some form of Government income support. Details regarding the available schemes are presented later in this note.

There are internationally agreed ways of treating persons in receipt of these different types of Government income support schemes for the purposes of compiling official statistics on the labour market. The approach which follows Eurostat and International Labour Organisation (ILO) guidelines is outlined in this information note.

Supplementary COVID-19 Adjusted Measures of Employment and Unemployment are also described below which provide an indication of the impact of COVID-19 on the labour market within Ireland whilst preserving the methodology of the LFS.

Effect of COVID-19 on data collection for the Labour Force Survey (LFS)

Households are randomly selected for inclusion in the LFS sample and are included in the sample for five consecutive quarters. As a household rotates out of the sample it is replaced by a household from the same, or a similar, area in the subsequent quarter and one fifth of the sample is participating in its first interview each quarter. The remaining sample households are distributed evenly across their second to fifth interviews each quarter.

The LFS usually consists of a household being interviewed face-to-face initially while the majority of follow up interviews are conducted over the telephone. As referenced in our Press Statement of 20 March 2020, (see Press Statement) the CSO had to suspend direct face-to-face interviews for the LFS (and other household surveys) due to the social distancing measures introduced in Ireland because of COVID-19. At the time of writing this updated information note face-to-face interviews for the LFS are still suspended. The CSO interviewer now sends an introductory letter to the household before the first interview, to explain the purpose of the survey and to arrange a suitable time for a phone call to conduct the initial LFS interview.

While most of the data collection for Q1 2020 was conducted in the usual way using a combination of face-to-face and telephone interviews, the last few weeks of the quarter consisted of telephone interviews only. This means that the collection of data for the LFS in Q1 2020 was only minimally affected due to COVID-19. This contrasts with Q2 2020 when all interviews were completed via telephone.

Response rates for the LFS are being impacted by the enforced change of mode to 100% telephone interviews. The Social Data Collection team in the CSO are actively engaging in mitigating against the impact of COVID-19 on LFS response rates and the CSO’s Methodology Division are providing guidance in relation to the weighting, calibration, non-response adjustment and other relevant methodology required for the LFS due to COVID-19.

COVID-19 Income Supports

There were two main schemes available in Q2 2020 to support those whose income from employment has been affected due to COVID-19. The majority of those whose income from employment had been affected due to COVID-19 in the first week of Q2 2020 (week ending 05 April 2020) were being facilitated through the Pandemic Unemployment Payment (507,255) which is administered by the Department of Employment and Social Protection (DEASP), while a smaller cohort were being facilitated through the Revenue Temporary Wage Subsidy Scheme (293,526). By the end of Q2 2020 (week ending 28 June 2020) the numbers benefitting from the Pandemic Unemployment Payment had dropped to 438,933 while the numbers benefitting from the Temporary Wage Subsidy Scheme are estimated to have increased to 399,388.

The COVID-19 income supports were originally set up as short-term emergency income supports but they have been extended several times and there have been changes made in terms of the eligibility criteria and how they are being administered. While the Pandemic Unemployment Payment and the Temporary Wage Subsidy Scheme were both expected, until recently, to cease in August, the latest announcements have indicated that the Pandemic Unemployment Payment is expected to continue into 2021 while the Temporary Wage Subsidy Scheme will be replaced by the Employment Wage Subsidy Scheme from 01 September 2020.

The CSO will continue to evaluate the current income support schemes and any new schemes to determine whether any changes are required to the methodology or communication for the LFS or any other outputs. Updates in relation to the effect of the income supports on the LFS will be clearly outlined to users in subsequent updates to this information note as well as in the statistical release and other accompanying material.

The CSO have worked with DEASP and Revenue to make weekly breakdowns of the numbers benefitting from the COVID-19 income supports available. These tables are available here: Detailed Covid-19 Income Support and Live Register Tables

Official Source of Labour Market Statistics - Labour Force Survey

The Labour Force Survey (LFS) is the official source of labour market statistics for Ireland, including the official measures of employment and unemployment. These official measures are based on the International Labour Organisation (ILO) concepts and definitions. The ILO measures are the international standard and all EU Member States are legally obliged to compile and provide this data to Eurostat on a quarterly basis.

The LFS definitions of labour market status that currently apply to EU member states and which are based on the ILO concepts and definitions are available at the following link: Eurostat Labour Force Methodology.

The following definitions for the official measures of labour market statistics that the CSO are obliged to report from the LFS are taken from the link above:

Employment (persons in employment):

Employed persons comprise persons aged 15 years and over who were in one of the following categories:

• Persons who worked for at least one hour for pay or profit or family gain during the reference week.

• Persons who were not at work during the reference week but had a job or business from which they were temporarily absent.

This definition is applicable to employees, self-employed persons and family workers. Pay includes cash payments or 'payment in kind' (payment in goods or services rather than money), whether payment was received in the week the work was done or not.

Unemployment:

Unemployed persons comprise persons aged 15 to 74 years who were:

• Not employed according to the definition of employment above;

• Currently available for work, i.e. were available for paid employment or self-employment before the end of the two weeks following the reference week;

• Actively seeking work, i.e. had taken specific steps in the four-week period ending with the reference week to seek paid employment or self-employment or who found a job to start later, i.e. within a period of at most three months from the end of the reference week. The specific steps that could have been taken to actively look for work involves having completed at least one active search methods from a list of nine such as applying directly to employers for work, studying job advertisements, etc.

Education and training are considered ways of improving employability but not as methods of seeking work. Persons without work and in education or training will only be classified as unemployed if they are ‘currently available for work’ and ‘seeking work’, as defined in the bullet points above.

Active population:

The active population, also called the labour force, is the population who are employed or unemployed.

Economically inactive persons:

Economically inactive persons are those who are neither employed nor unemployed.

Temporary lay-off:

A person on lay-off is one whose written or unwritten contract of employment, or activity, has been suspended by the employer for a specified or unspecified period at the end of which the person concerned has a recognised right or recognised expectation to resume employment with that employer.

Lay–offs are classified as employed if they have an assurance of return to work within a period of 3 months or receive at least 50% of their wage or salary from their employer.

Lay–offs are classified as unemployed if they receive less than 50% of their wage or salary from their employer, don’t have assurance of return to work or have an agreed date but this date falls after a period of 3 months and if they are “available to start work in 2 weeks” and have “actively searched for a job in the last 4 weeks”.

Otherwise they are considered as inactive.

Labour Force Survey (LFS) and COVID-19 Adjusted Measures

It is important to point out that the labour market status that is assigned to an individual in the LFS is based on a series of questions that objectively assign the status based on the ILO concepts and definitions outlined above. This means that the labour market status assigned to an individual from the LFS in this way may not agree with the labour market status that would be assigned in a subjective manner. For example, a person laid off with no assurance of return to work may be perceived by many as unemployed. However, under objective ILO guidelines, unless this person is actively seeking work and available to take up employment (s)he is deemed “Inactive” and outside the Labour Force.

As the CSO is obliged to follow standard definitions and methodology when calculating the official estimates from the LFS, when publishing the Q1 2020 LFS estimates, it was decided to compile the LFS Estimates in the usual way and provide separate COVID-19 Adjusted Estimates. This approach preserves the methodology of the LFS while, at the same time, providing transparency around the current impact of COVID-19 on the Labour Market within Ireland. The CSO has decided to continue with this approach for Q2 2020.

Since March 2020, the CSO has produced a supplementary measure of Monthly Unemployment in parallel with the standard and official estimates from the Monthly Unemployment Estimates (MUE) release. Those in receipt of the Pandemic Unemployment Payment are incorporated with the numbers who are estimated to have been unemployed to produce a COVID-19 Adjusted Measure of Monthly Unemployment. This new measure will continue to be made available for as long as deemed necessary by the CSO. Please see the original version of the technical note which was published alongside the March 2020 MUE release and the updated version which was published alongside the July 2020 MUE release (technical note). The latest versions of those COVID-19 Adjusted Measures of Monthly Unemployment were published in the July 2020 MUE release and are also being presented as the COVID-19 Adjusted Measure of Unemployment for the LFS for Q2 2020.

As part of the process to generate estimates for the LFS for Q1 2020, the CSO also made available a COVID-19 Adjusted Measure of Employment. This estimate was created by subtracting those who were in receipt of the Pandemic Unemployment Payment at the end of March 2020 from the numbers in employment during Q1 2020. A corresponding estimate was also produced for the end of April 2020. This methodology will be reproduced for the Q2 2020 LFS release tomorrow to create estimates of COVID-19 Adjusted Measures of Employment for June 2020 and July 2020.

In the same way that the COVID-19 Adjusted Measure of Unemployment can be considered an upper bound for unemployment the COVID-19 Adjusted Measure of Employment can be considered as the lower bound for employment. The reality is that there is not enough information currently available for those in receipt of the Pandemic Unemployment Payment at an individual level to know what the labour market status of those individuals are.

The COVID-19 Adjusted Measures of Employment and Unemployment are subject to change when more information becomes available that allows a better estimate of the impact of COVID-19 on the labour market in Ireland to be constructed. The CSO have access to data for those in receipt of the COVID-19 income supports and are continuing to investigate more targeted COVID-19 Adjusted Measures by matching these and other data sources to the LFS. 

Changes to the Labour Force Survey (LFS) questionnaire due to COVID-19

The CSO worked quickly to amend the LFS questionnaire for Q2 2020 to remove as many questions as possible from the initial questionnaire that would traditionally be completed face-to-face to make the interviews in Q2 shorter and easier to complete over the phone.

The CSO also worked to add a small subset of questions relating to COVID-19 to the LFS for Q2 2020. As outlined above, the ILO measures are unlikely to capture the impact of COVID-19 on the labour market in Ireland as a lot of people may still be classified employed (away from a job but expect to return to work within 3 months for those availing of the emergency income supports from the Government) and some people who are out of work are likely not to be considered unemployed in the future (if due to childcare responsibilities from schools and creches closing, they are unavailable to take up work in the next 2 weeks or if they have not taken active steps in the previous four weeks to find work).

High level questions were added to the LFS in Q2 2020 to try and ascertain the numbers who have had work hours change (mostly decrease, except health workers and other frontline staff), lost work, been laid off temporarily or had to take paid/unpaid leave, etc. The CSO has previously published some results outlining the effect of COVID-19 based on data collected in the first few weeks of Q2 2020. The published release is available here: Employment and Life Effects of Covid-19 April 2020.

The LFS questionnaire covering Q3 2020 has been live since 6 July 2020 and is available at LFS Survey Forms     

Alongside the LFS results for Q2 2020 tomorrow, the Labour Market analysis area of the CSO will also publish the first bulletin style release from a Labour Market Insight Series designed to provide additional insight into the effect of COVID-19 on the labour market in Ireland by providing high-level supplementary analysis to users alongside the current outputs and metrics. The data is sourced from the LFS and administrative datasets. The insight bulletin being published tomorrow is specifically designed to give some context to the standard LFS results for Q2 2020. Further iterations of this new output are likely to focus on specific aspects of the labour market.

The LFS release for Q3 2020 is currently scheduled to be published on 17 November 2020 and, as usual, any amendments to the schedule will be signalled in advance through the CSO release calendar.

Please Note: The CSO Labour Market Analysis area is compiling a list of users who have registered to be kept informed in relation to relevant announcements from the Labour Market area of the CSO. If you haven't already done so you can register your email address by sending an email to labour@cso.ie asking to be included on this user list

The CSO will continue to engage with users around all releases and users can contact labour@cso.ie for further information or clarification in relation to the Labour Force Survey.

For further information contact:

Jim Dalton, Labour Market Analysis - (+353) 86 6780316