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Glossary of Labour Market terms

Actual hours worked
Statistics for actual weekly hours worked measure how many hours were actually worked. These statistics are affected directly by changes in the number of people in employment and in the number of hours that individuals work. The figures are seasonally adjusted to take account of calendar-related absences from work during the reference period. Examples of such absences are public holidays and time off work for family or school holidays. The figures are also affected by other absences from work such as those due to sickness.

An allowance is an entitlement granted by the employer to an employee and intended to cover a specific expense, not work-related, incurred by the employee. It is often stipulated in workplace agreements and is normally paid at the time of entitlement.

Annual Population Survey (APS)
The Annual Population Survey is similar to the Labour Force Survey (LFS). It started in January 2004 and is compiled by taking data from the four calendar quarters of the LFS and combining them with additional samples of interviews.

Annual Survey of Hours and Earnings (ASHE)
The Annual Survey of Hours and Earnings is a survey conducted by the Office for National Statistics (ONS) that provides information about the levels, distribution and make-up of earnings and paid hours for employees in all industries and occupations.

Average Weekly Earnings (AWE)
Average Weekly Earnings is the lead monthly measure of average weekly earnings per employee. It is calculated using information based on the Monthly Wages and Salaries Survey (MWSS), which samples 8,500 firms in Great Britain. It is produced by the Office for National Statistics (ONS) and provides a key measure of wage inflation. It replaced the Average Earnings Index as the ONS’s headline measure of short-term earnings growth in January 2010.

Benefits in Kind
These are benefits, excluding salaries, given to employees which include cars and car fuel, medical insurance and gifts, and which are taxed as employment income.

A bonus is a form of reward or recognition granted by an employer. When an employee receives a bonus payment, there is no expectation or assumption that the bonus will be used to cover any specific expense. The value and timing of a bonus payment can be at the discretion of the employer or stipulated in workplace agreements.

Capital services
Sometimes referred to as VICS (volume indices of capital services), these are measures of capital inputs which reflect the flow of productive capital into production (rather than the value of capital employed). Capital services are used in the construction of estimates of multi-factor productivity.

Claimant count
The number of people claiming unemployment-related benefits. Since October 1996 this has been the number of people claiming Jobseeker's Allowance. The seasonally adjusted claimant count series, which goes back to 1971 for the UK, is estimated on a basis consistent with the current benefits regime, that is, it has been adjusted for discontinuities in coverage.

Claimant Count rate
The number of claimants resident in an area as a percentage of the sum of claimants and workforce jobs in the country or region.

Compensation of employees
Defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for employers' social contributions, mainly consisting of employers' actual social contributions (excluding apprentices), employers' imputed social contributions (excluding apprentices) and employers' social contributions for apprentices.

Discouraged worker
A sub group of the economically inactive population who said their main reason for not seeking work was because they believed there were no jobs available.

Duration of Employment (Job Tenure)
Duration of employment, often referred to as job tenure, can be viewed in two ways. Firstly, it can refer to the length of time an individual spends in continuous employment, regardless of whether they are with the same employer. Alternatively, it can refer to the length of time the individual remains with the same employer, either in the same job or in different positions within the organisation. The Labour Force Survey (LFS) asks a number of questions in order to collect the time periods for which respondents have been with their current and/or previous employer.

A measure of the money people receive in return for work done, gross of tax. It includes salaries and, unless otherwise stated, bonuses but not unearned income, benefits in kind or arrears of pay.

Economically active
People aged 16 and over who are either in employment or unemployed.

Economically inactive
See Inactivity.

The number of people in employment is measured by the Labour Force Survey (LFS) and consists of people aged 16 and over who did paid work (as an employee or self-employed), those who had a job that they were temporarily away from, those placed with employers on government-supported training and employment programmes, and those doing unpaid family work.

Employment and jobs
The number of people with jobs is not the same as the number of jobs. This is because a person can have more than one job. The number of people with jobs is measured by the Labour Force Survey (LFS). The number of jobs is measured by Workforce Jobs (WFJ) and is the sum of employee jobs from employer surveys, self-employment jobs from the LFS, those in HM Forces and Government-Supported Trainees. The LFS also provides an estimate of the number of jobs, by adding main and second jobs, but the industry breakdown is less reliable. The LFS and WFJ measures are reconciled each quarter in an article published on the website. Jobs vacancies are measured separately by the Vacancy Survey.

Employment rate
The headline employment rate is calculated by dividing the employment level for those aged from 16 to 64 by the population for that age group.

The enterprise is the smallest combination of legal units that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit.

Full-time and part-time
In the Labour Force Survey (LFS), respondents are asked to self-classify their main job as either full-time or part-time.

Gross Value Added (GVA)
The additional value generated by any unit engaged in production, over and above the value of the inputs to that production. It can also be defined as the difference between total output and intermediate consumption for any given sector or industry. It is measured at basic prices, excluding taxes less subsidies on products.

Hours Worked
See Actual Hours Worked and Usual Hours Worked.

Economically inactive people are those without a job who have not actively sought work in the last four weeks, and/or are not available to start work in the next two weeks.

Inactivity rate
The headline inactivity rate is calculated by dividing the inactivity level for those aged from 16 to 64 divided by the population for that age group.

Index Number
A measure of the average level of prices, quantities or other quantifiable characteristics relative to their level for a defined reference period or location. It is usually expressed as relative to 100 (for example, 105 would be an increase of 5 per cent) where 100 is the value for the reference period or location.

Index of Labour Costs per Hour (ILCH)
The Index of Labour Costs per Hour is an experimental quarterly measure to estimate the changes in the cost incurred for an hourly unit of labour provided by an employee to an employer. It is calculated using information based on the Monthly Wages and Salaries Survey (MWSS), which samples 8,500 firms in Great Britain. It is produced by the Office for National Statistics (ONS) and provides a key measure of inflation.

Industrial classification/breakdown
This is the internationally standardised method for classifying the extensive range of industrial sectors in an economy. At the highest level, the economy can be divided into the private sector and the public sector. It can also be broken down by industrial sector. ONS uses the Standard Industrial Classification 2007 (SIC 2007) for industrial breakdowns of labour market statistics.

Inflows and Outflows
The claimant count records are analysed to provide information about inflows into the count and outflows from the count on a monthly basis. To make comparisons over time consistent, these figures are standardised to a four and three quarter week month before seasonal adjustment. These figures for people starting to or ceasing to claim Jobseekers Allowance can be helpful towards intepreting changes in the claimant count.

Inter-Departmental Business Register (IDBR)
The UK register for business surveys. The register is used to select businesses to be included in the surveys, mail forms, enable estimates to be made for businesses that do not respond, or who were not asked to participate in any particular survey, and to produce analyses.

JobCentre Plus
Jobcentre Plus is a government agency supporting people of working age from welfare into work, and helping employers to fill their vacancies. It is part of the Department for Work and Pensions (DWP) and it administers Jobseeker’s Allowance benefit and a number of other benefits.

Job related training
Job related training is a combination of work and preparing for work. It includes on the job training, training away from the job and pre-employment training.

A job is an activity performed for an employer or customer by a worker in exchange for payment, usually in cash, in kind, or both. Agreement is reached through the provision and negotiation of a contract, stipulating what an employer or customer demands and what is to be supplied by the worker. Estimates of jobs are published in the workforce jobs series which is mainly sourced from employer surveys.

Jobseeker's Allowance (JSA)
Jobseeker’s Allowance is the main benefit for people of working age who are out of work or work less than 16 hours a week on average. If you're eligible, it is paid while you're looking for work. To get Jobseeker's Allowance you must be (i) available for, capable and actively seeking work, (ii) aged 18 or over but below State Pension age, (iii) working less than 16 hours per week on average. Jobseeker's Allowance is not normally paid to 16 or 17 year olds, except in special cases.

Job Tenure
See Duration of Employment.

Key out of work benefits
The Department for Work & Pensions consider the key out of work benefits to be those that are paid to client groups subject to labour market activation policies. This includes recipients of Jobseeker's Allowance, Incapacity Benefit, Employment & Support Allowance, Severe Disablement Allowance, Lone Parents Income Support and other income related benefits. However it excludes recipients of Carers Allowance, Bereavement or Widow's Benefit and Disability Living Allowance, unless the claimant is also in receipt of one of the key out of work benefits.

Labour costs
In the employed sector, this is largely made up of wages and salaries, but there are some other components that are added to wages and salaries to make up ‘Compensation of Employees’. These other components include other forms of remuneration such as national insurance or pension contributions. For the self-employed sector, it is not possible to attribute income specifically to labour or to capital, so the returns to labour and capital are grouped into one term called ‘Mixed Income’. However, for some productivity measures, notably unit wage costs, it is necessary to derive an estimate for the returns to self-employed labour. This is done by assuming that the proportions of either hours worked or returns to labour are the same in the self-employed sector as they are in the employed sector.

Labour disputes
Disputes connected with terms and conditions of employment. These statistics relate to persons both directly and indirectly involved at the establishments where the disputes occurred.

Labour Force Survey
The Labour Force Survey (LFS) is the largest regular household survey in the UK. The survey covers people resident in private households, National Health Service (NHS) accommodation and student halls of residence. It does not cover any other communal establishments. LFS interviews are conducted continuously throughout the year. In any three-month period, a nationally representative sample of approximately 100,000 people aged 16 and over in around 45,000 households is interviewed. Each household is interviewed five times, at three monthly intervals. The initial interview is conducted face-to-face by an interviewer visiting the address, except for residences north of the Caledonian Canal in Scotland (where face-to-face-interviews would be prohibitively expensive). The other interviews are conducted by telephone wherever possible. The survey asks a series of questions about respondents’ personal circumstances and their labour market activity. The survey is conducted in five ‘waves’ so that in any one quarter, one wave will be receiving their first interview, one wave their second, and so on, with one wave receiving their fifth and final interview. Therefore, there is an 80 per cent overlap in the samples for each successive quarter.

Labour input
In terms of input to productivity measures, this is the flow of productive labour.

Labour Market Statistics (LMS)
A measure of many different aspects of the labour market that provide an insight into the economy. They are also very much about people, including: their participation in the labour force; the types of work they do; earnings and benefits they receive; their educational qualifications; and their working patterns.

Local Unit (LU) employees
The industrial classification of the local unit of an enterprise is used to classify employee jobs, rather than the ‘reporting unit’ industrial classification. This is particularly relevant when an enterprise has numerous local units in more than one industrial function and in more than one geographical region. For example, a supermarket may provide pharmaceutical services, insurance and various other services besides selling supermarket-related goods and services, predominantly food and other domestic or household goods.

Monthly Wages and Salaries Survey (MWSS)
A survey conducted by the Office for National Statistics (ONS) which collects information on wages and salaries. The survey is distributed monthly to over 8,800 businesses covering some 12.8 million employees.

Multifactor productivity (MFP)
Also sometimes referred to as ‘total factor productivity’, ‘disembodied technical change’ or the ‘Solow residual’. This is an alternative, more complex, method of estimating productivity growth. ONS estimates of MFP can be thought of as that part of a recorded change in economic output that cannot be accounted for by changes in inputs of labour (measured by QALI) and capital services. For example, improved management techniques which lead to more output from given inputs of labour and capital will lead to an increase in MFP.

Official website for local area labour market statistics, run by the University of Durham on behalf of the Office for National Statistics. This website is available at

See full-time and part-time.

Quality adjusted labour input (QALI)
Measures of labour input which take account of changes in the composition of labour differentiated by educational qualification, industry of employment, age and gender. For example, a shift in the composition of the employed labour force towards higher levels of educational qualification will lead to QALI growing faster than the rate of growth of hours worked. QALI estimates are used in the construction of estimates of multi-factor productivity.

Generally, the preferred measure of Labour market statistics as they allow changes in the labour market to be interpreted in a wider context by allowing for changes in the overall population.

The number of people, whether working or not working, who had been made redundant or had taken voluntary redundancy in the month of the Labour Force Survey reference week or in the previous two calendar months.

Sampling Variability
Survey estimates are prone to sampling variability. The easiest way to explain this is by example. In the April to June 2008 period, there were estimated to be 29,558,000 people aged 16 and over in employment in the UK, according to the LFS (seasonally adjusted). These figures were published in August 2008. If we drew another sample for the same period we could get a different result, which could be higher or lower. In theory, we could draw many samples, and each would give a different result. The spread of these results leads to sampling variability. Once we know the sampling variability we can calculate a range of values about the sample estimate that represents the expected variation with a given level of assurance. This is called a confidence interval. For a 95 per cent confidence interval we expect that, in 95 per cent of the samples, the confidence interval will contain the true value of employment that would have been obtained by surveying the entire population. For example, for April to June 2008, we can be 95 per cent confident that the true level of employment was within 140,000 of the estimate of 29,558,000 (that is, within the range 29,418,000 to 29,698,000). Sampling variability also affects changes over time. Changes in employment between three-month periods are rarely greater than the level that is explainable by sampling variability. It is estimated that the number of people aged 16 and over in employment in the UK increased by 20,000 between January to March 2008 and April to June 2008 (seasonally adjusted). We can be 95 per cent confident that the true change lies in the range between a decrease of 81,000 and an increase of 121,000. It is more likely that employment increased, rather than decreased. In general, the larger the number of people in the sample, the smaller the variation between estimates. Estimates based on the LFS for the whole of the UK are therefore more accurate than those for smaller geographical areas. Indications of sampling variability for national and regional LFS data are given in the Labour Market Release.

Seasonal adjustment
Seasonal movements can occur in labour market data for a number of reasons including holidays and recruitment patterns. For example, a large number of people leave full-time education and enter the labour market in the summer. To make it easier to identify the underlying movements in the labour market, changes due solely to seasonal influences are removed from many series. This process is known as seasonal adjustment. LFS estimates are seasonally adjusted using the X-12 ARIMA package developed by Statistics Canada. The seasonal adjustment of LFS data is usually reviewed annually.

The statistics cover stoppages of work in progress in the UK during a year caused by labour disputes between employers and workers, or between workers and other workers, connected with the terms and conditions of employment. These include ‘lock-outs’ by employers and ‘unlawful’ or ‘unofficial’ strikes. The statistics exclude disputes that do not result in a stoppage of work, for example, work-to-rules and go-slows.

The number of unemployed people in the UK is measured through the Labour Force Survey (LFS) following the internationally agreed definition recommended by the International Labour Organisation (ILO) – an agency of the United Nations. Unemployed people are without a job, have actively sought work in the last four weeks and are available to start work in the next two weeks or out of work, have found a job and are waiting to start it in the next two weeks.

Unemployment rate
The headline unemployment rate is calculated by dividing the unemployment level for those aged 16 and over by the total number of economically active people aged 16 and over. Economically active is defined as those in employment plus those who are unemployed.

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.

Vacancies are defined as positions for which employers are actively seeking recruits from outside their business or organisation. The estimates are based on the Vacancy Survey, a survey of businesses designed to provide estimates of the stock of vacancies across the economy, excluding Agriculture, forestry and fishing (a small sector for which the collection of estimates would not be practical).

Workers Involved
The figures for workers involved in labour disputes are for workers both directly and indirectly involved at the establishment where the dispute occurred. Workers indirectly involved are those who are not themselves parties to the dispute but are laid off because of the dispute. Workers involved in more than one stoppage during the year are counted in the statistics for each stoppage in which they take part. Part-time workers are counted as whole units.

Workforce jobs
See Employment and Jobs.

Working Days Lost
Working days lost are defined as the number of days not worked by people involved in a dispute at their place of work. In measuring the number of working days lost, account is taken only of the time lost in the basic working week. Overtime work is excluded, as is weekend working where it is not regular practice.


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