1. Background
In the Labour Force Survey (LFS) respondents are interviewed for five consecutive quarters over a 12 month period, with 20 per cent of the sample being replaced at each quarter. This allows for a longitudinal dataset to be created over a limited time interval, where respondents’ characteristics can be tracked over their time in the survey.
The ONS publishes population-weighted longitudinal datasets for each calendar quarter. These are available for each quarter since 1997 and can be used to analyse changes in labour market characteristics over two or five quarters. The datasets include "flow" variables, which estimate the size of the movements between the three main labour market statuses of employment, unemployment and economic inactivity.
Monitoring changes in the labour market status of respondents to the LFS aids the understanding of the quarterly changes in the levels of employment, unemployment and economic inactivity. These indicators are published as stocks for a given period, with changes expressed as the difference between successive quarters. These quarterly comparisons represent the net changes between the three labour market statuses. The underlying gross flows are usually considerably larger and may not correspond with those implied by the net changes. Estimates of the gross flows between the statuses can be derived from the LFS Longitudinal Datasets and are summarised in this note.
Back to table of contents2. Method
There are two types of LFS longitudinal datasets: two-quarter and five-quarter. These are weighted using the same population estimates as those used in the main quarterly LFS datasets, although the weighting methodology differs (see technical note). Consequently the estimates are broadly consistent with the published aggregates, but not entirely. Also, the datasets are limited to people aged 16 to 64.
Both types of dataset contain a flow variable with eleven categories, with all combinations of employment, unemployment and economic inactivity accounted for, plus two categories for those entering and leaving the 16 to 64 population over the quarter. For the purpose of this analysis, those entering or leaving this population are excluded from the measured sample. The stock of the employed, unemployed and inactive at each quarter can therefore be estimated by summing the corresponding flow categories.
For this analysis, the two-quarter datasets have been used in order to gain some insight into the quarterly changes in the headline published aggregates.
Back to table of contents3. The charts in this article
Estimates of flows between labour market statuses are available at data table X02 (96.5 Kb Excel sheet).
The charts in this article show the estimated gross flows, that is the total inflow or outflow for 16-64 employment, unemployment and inactivity from one calendar quarter to the next. They are seasonally adjusted. Analysis of the net flows, that is the difference between the total inflow and outflow, are also included and these are compared with the quarterly changes in the published aggregates, partly to give an indication of the robustness of the flows analysis.
Back to table of contents4. Key messages for quarter 2 2015
The decreasing trend in the inflow to unemployment has slowed. The increase in the flow from inactivity is driving this.
The unemployment outflow is the lowest since October to December 2008.
The gross flow into employment is at its lowest for two years.
Seasonally adjusted job to job flows, that is, the number of people who remained in employment over the quarter but have changed job, are published as part of this release for the first time.
5. Quarterly gross flows
The diagram below shows the gross flow between each economic status between January to March 2015 and April to June 2015. The stocks for each status represent the latter period and are the seasonally adjusted aggregates for people aged 16 to 64.
Quarterly population flows - April to June 2015
United Kingdom, seasonally adjusted (thousands)
Source: Labour Force Survey
Download this image Quarterly population flows - April to June 2015
.png (31.9 kB) .xls (98.8 kB)6. Unemployment
The decreasing trend in the gross inflow to unemployment (Figure 1) has slowed. The increase in the flow from inactivity is driving this.
Figure 1: Inflow to unemployment
Seasonally adjusted (16 to 64)
Source: Labour Force Survey
Download this chart Figure 1: Inflow to unemployment
Image .csv .xlsThe gross outflow has continued to decrease (Figure 2) and is the lowest since October to December 2008. The flow from unemployment to inactivity increased slightly while the flow to employment continued to decrease.
Figure 2: Outflow from unemployment
Seasonally adjusted (16 to 64)
Source: Labour Force Survey
Download this chart Figure 2: Outflow from unemployment
Image .csv .xlsFigure 3 shows that the quarterly change in stock is positive for the first time in two years with the net flow increasing by a similar amount over the last two periods.
Figure 3: 16 to 64 Unemployment: Net flow vs change in stock
Seasonally adjusted
Source: Labour Force Survey
Download this chart Figure 3: 16 to 64 Unemployment: Net flow vs change in stock
Image .csv .xls7. Employment
The flows to employment from both inactivity and unemployment (Figure 4) decreased in the latest quarter.
Figure 4: Inflow to employment
Seasonally adjusted (16 to 64)
Source: Labour Force Survey
Download this chart Figure 4: Inflow to employment
Image .csv .xlsThe gross outflow from employment (Figure 5) is increasing slightly.
Figure 5: Outflow from employment
Seasonally adjusted (16 to 64)
Source: Labour Force Survey
Download this chart Figure 5: Outflow from employment
Image .csv .xlsFigure 6 shows that the net flow and change in stock have both decreased.
Figure 6: 16 to 64 Employment: Net flows vs change in stock
Seasonally adjusted
Source: Labour Force Survey
Download this chart Figure 6: 16 to 64 Employment: Net flows vs change in stock
Image .csv .xls8. Job to job
The job to job flow (Figure 7), that is, the number of people who remained in employment over the quarter but have changed job, has been on an upward trend since 2010 but has not returned to the rates seen pre-2008.
Figure 7: Job to job flow rate
Seasonally adjusted (16 to 69)
Source: Labour Force Survey
Download this chart Figure 7: Job to job flow rate
Image .csv .xls9. Inactivity
The flows from both employment and unemployment into inactivity have increased slightly over the last quarter (Figure 8).
Figure 8: Inflow to inactivity
Seasonally adjusted (16 to 64)
Source: Labour Force Survey
Download this chart Figure 8: Inflow to inactivity
Image .csv .xlsThe decrease in the latest quarter in the gross outflow from inactivity (Figure 9) is driven by the fall in the flow to employment.
Figure 9: Outflow from inactivity
Seasonally adjusted (16 to 64)
Source: Labour Force Survey
Download this chart Figure 9: Outflow from inactivity
Image .csv .xlsFigure 10 indicates that the quarterly change in stock and the net flow have both increased.