Vol. 458 No. 5
19 Mrs. O'Rourke asked the Minister for Enterprise and Employment if he has satisfied himself with the current unemployment data in view of the growing discrepancy between the labour force survey and the live register given his responsibility for employment policy; and if he will urge the Government to introduce quarterly labour force surveys. [17331/95]
24 Mr. B. Ahern asked the Minister for Enterprise and Employment the reason for the rise in the number of unemployed since April as measured by the live register. [16788/95]
38 Mr. Clohessy asked the Minister for Enterprise and Employment the measure of unemployment his Department uses in formulating policy for industrial development and employment creation; and if he will make a statement on the matter. [17249/95]
59 Mr. B. Smith asked the Minister for Enterprise and Employment if he will make a statement on the recent labour force survey. [17259/95]
I propose to take Questions Nos. 19, 24, 38 and 59 together. I welcome the excellent employment figures revealed in the preliminary labour force survey estimates for the 12 months to April 1995. These figures show that growth in employment of 49,000 was accompanied by a significant reduction of 26,000 in unemployment despite the substantial increase of 23,000 in the labour force. The Government consider it likely that this rapid rate of employment growth has been maintained since April.
There has been considerable debate about the most appropriate measure of unemployment. The labour force survey is the internationally agreed standard statistical method of establishing numbers at work and not at work. The estimate published in the recent April 1995 labour force survey is based upon a person's own description of his or her situation by his or her principal economic status, such as at work, unemployed, student or on home duties and because of its comprehensiveness and coherence it is the key measure of employment and unemployment that informs policy making in my Department.
The live register is a count of the numbers of people who sign on for payments or credits within the scope of certain schemes administered by the Department of Social Welfare and, as such cannot be considered as a robust measure of unemployment. It is the only indicator of change in the level of employment between labour force surveys and as such has some use as a short-term indicator of trend.
Changes in the administrative rules and practices governing schemes administered by the Department of Social Welfare also have an impact on the live register. Such changes may involve improved access to schemes for social policy reasons. Increased access such as improved support for those in part-time employment should not be considered as an increase in unemployment. If public policy was driven by such a measure it could lead to peverse policy responses.
Deputy Ahern asked about the reasons for the increase in the live register since April. There has been a fall in the number of persons signing on between April and October but on a seasonally adjusted basis this translates into a rise of 7,100 during this period. It is difficult to be definitive about the precise reasons for changes in the register over short-time intervals. The impact of migratory flows and increases in the size of and flows to and from the labour force can influence the flows on and off the register. Apart from these factors significant numbers of part-time workers are currently included in the live register count. I have been informed by the Department of Social Welfare that there has been an increase of the order of 6,000 in the numbers of such workers, that is, people employed on a part-time basis signing on in the period since April 1995.
I am convinced that the labour force survey provides the best information on which to base public policy. As the live register is an indicator of one aspect of the labour market—unemployment—it is an inadequate base on which to assess, formulate and carry out labour market policy. The fact that it does not cover employment information is a major constraint on its potential use as even the most rudimentary indicator of labour market trends.
As Deputies know, the live register total has always exceeded the labour force survey estimates of unemployment. The difference was relatively small until the mid-1980s but has grown considerably since then. The many factors which are likely to have contributed to this divergence include equality legislation, eligibility relating to part-time workers and other changes in eligibility already outlined to the House on 8 November 1995.
An interdepartmental group has been established by the Government to oversee the preparation and implementation of a comprehensive strategy on unemployment. As part of its remit the group will examine the divergence between the live register claimant count and the labour force survey estimate of unemployment. It is vital that employment, unemployment and labour market policies in general are informed by a consistent and coherent information base as is produced by the labour force survey. It is, therefore, desirable to seek to secure regular and timely labour force statistics. I am considering, with my Government colleagues, the question of increasing the frequency and timing of labour force survey estimates, a move which I support. Clearly the most recent results from the labour force survey covering both employment and unemployment truly demonstrate the success of Government policy in turning economic growth into employment and jobs growth into reduced unemployment. This information can encourage us to further expand and develop proven policies. It can also identify labour market problems requiring further attention.
The Minister said the Government is examining more accurate ways of measuring unemployment. Will he consider having the labour force survey on a quarterly basis? The Taoiseach stated that the cost of quarterly surveys would be £1.9 million. Is that the correct figure? Can the Minister explain the discrepancy of 84,000 in the numbers on the live register and those in the labour force survey?
I support the idea of quarterly labour force surveys. That issue is currently being examined by different Departments. Cost is one factor which must be taken into account and while I do not have the figures to hand I have seen figures of the nature referred to by the Deputy. There is a cost factor in surveying 47,000 houses quarterly rather than annually.
The discrepancy in the number of people arises from changes in eligibility criteria for social welfare. One of the primary changes is the introduction of more liberal eligibility criteria for part-time workers to claim unemployment on the days they do not work. The number of such claimants is 29,000. There have been changes in equality legislation which give greater entitlement to women to sign on for unemployment assistance and also for splitting entitlements between spouses. We do not have accurate estimates of the scale of that change. Other changes are in the rules relating to unemployment assistance where the eligibility of those living at home with their parents has changed to make it more accessible. That resulted in an increase in the number of claimants as measured by the live register figure. The group which has been established will investigate this in greater detail.
The equality legislation widened the eligibility criteria and more women were entitled to sign on and seek employment. Those on the live register are eligible for employment and therefore it is a more accurate figure. The outcome of that legislation means that more women sign on as they are entitled to do and to seek employment. Does the Minister agree that there is a need for a more precise delineation of those who are unemployed visà-vis sex, previous employment, length of unemployment, chosen profession and category of work? I sent a request to the UK, which has a more precise delineation of the statistics or the facts behind statistics on live registers and labour force surveys, for information.
It would be useful to have more data. The labour force survey provides certain data which is useful from the point of view of looking at unemployment, for example, information in relation to education and other matters. I always regretted the changes in 1987 or 1988 when much of this information was dropped. We have data from FÁS which covers similar territory but which is not similar to that available in relation to the live register.
I accept that certain persons signing on are eligible to do so and are, therefore, declaring themselves available for work. However, from a policy perspective, we need a measure which does not change for reasons other than changes in the labour market. The difficulty with the live register measure is that it changes for administrative reasons — changes in eligibility affect it whereas the labour force survey is internationally recognised and gives a clear trend on a consistent measurement as to the impact of policy measures on employment and unemployment. It is, therefore, regarded internationally as the best measure and one to which we have always subscribed.
