Statistical release Quarterly Labour Force Survey Quarter 3, Embargoed until: 28 October 11:30 Enquiries: Forthcoming issue: Expected release date User Information Services Quarter 4 February 2009 Tel : (012) 310 8600 / 4892 / 8390
i Published by Statistics South Africa, Private Bag X44, Pretoria 0001 Statistics South Africa, Users may apply or process this data, provided Statistics South Africa (Stats SA) is acknowledged as the original source of the data; that it is specified that the application and/or analysis is the result of the user s independent processing of the data; and that neither the basic data nor any reprocessed version or application thereof may be sold or offered for sale in any form whatsoever without prior permission from Stats SA. Stats SA Library Cataloguing-in-Publication (CIP) Data Quarterly Labour Force Survey Quarter 3, / Statistics South Africa. Pretoria: Statistics South Africa, Quarterly 1. Labour supply Statistics 2. Labour supply (South Africa) 3. Unemployment (South Africa) 4. Informal sector (Economics) South Africa 5. Formal sector (Economics) South Africa I. Statistics South Africa II. Series (LCSH 16) A complete set of Stats SA publications is available at Stats SA Library and the following libraries: National Library of South Africa, Pretoria Division National Library of South Africa, Cape Town Division Library of Parliament, Cape Town Bloemfontein Public Library Natal Society Library, Pietermaritzburg Johannesburg Public Library Eastern Cape Library Services, King William's Town Central Regional Library, Polokwane Central Reference Library, Nelspruit Central Reference Collection, Kimberley Central Reference Library, Mmabatho This publication is available both in hard copy and on the Stats SA website www.statssa.gov.za. The data and metadata set from the Quarterly Labour Force Survey Quarter 3, will be available on CD-ROM. A charge may be made according to the pricing policy, which can be accessed on the website. Stats SA also provides a subscription service. Enquiries: Printing and distribution User information services tel: (012) 310 8251 (012) 310 8600 fax: (012) 321 7381 (012) 310 8500/ 8495 email: distribution@statssa.gov.za info@statssa.gov.za
ii Table of contents Page List of tables in key findings... iii List of figures in key findings... iii 1. Introduction...v 2. Key changes in reporting...v 3. Highlights of the results... vi 4. Employment in market production activities... vii 4.1. Industry and occupation... vii 4.2. Informal employment... viii 4.3. Comparison of formal sector employment in the QLFS and QES...x 5. Underutilised labour... xi 6. The unemployed population... xii 6.1. Other characteristics of the unemployed... xii 6.2. Long-term unemployment... xiii 7. Characteristics of the not economically active population... xv 8. Non-market production activities (household production for own final use)... xv 9. Link factors...xviii 9.1. Revision of historical data...xviii 10. Technical notes...xviii 10.1. Response details...xviii 10.2. Survey requirements and design...xviii 10.3. Sample rotation... xix 10.4. Weighting... xix 10.5. Non-response adjustment... xix 10.6. Final survey weights... xix 10.7. Estimation... xx 10.8. Reliability of the survey estimates...xx 11. Definitions... xx
iii List of tables in key findings Table A: Key labour market indicators...vi Table B: Key labour market indicators by sex... vii Table C: Employment by industry... vii Table D: Employment by occupation... viii Table E: Informal employment by sex...ix Table F: Formal sector employment according to the QLFS and the QES of April June...x Table G: Underutilised labour in the context of the working-age population...xi Table H: Unemployed by sex...xii Table J: Long-term unemployment... xiv Table K: The not economically active population...xv Table L: Engagement in non-market production activities by type of activity... xvi Table (i): Response rates by province...xviii List of figures in key findings Figure 1: Deriving informal employment in the QLFS...ix Figure 3: Unemployment rate by province... xiv Figure 4: Unemployment rate by population group, Q3:...xv Figure 5: Involvement in at least one non-market activity by province, Q3:... xvi
iv List of tables Table 1: Population of working age (15-64 years)...1 Table 2: Labour force characteristics by sex - All population groups...2 Table 2.1: Labour force characteristics by population group...3 Table 2.2: Labour force characteristics by province...4 Table 2.2: Labour force characteristics by province (concluded)...5 Table 3.1: Employed by industry and sex - South Africa...6 Table 3.2: Employed by industry and province...7 Table 3.2: Employed by industry and province (concluded)...8 Table 3.3: Employed by sector and industry - South Africa...9 Table 3.4: Employed by province and sector...10 Table 3.5: Employed by sex and occupation - South Africa...11 Table 3.6: Formal and informal employment...12 Table 3.6: Formal and informal employment (concluded)...13 Table 3.7: Employed by sex and status in employment - South Africa...14 Table 3.8: Employed by sex and usual hours of work - South Africa...15 Table 3.9: Time-related underemployment - South Africa...16 Table 3.10: Underutilisation of labour...17 Table 4: Characteristics of the unemployed - South Africa...18 Table 5: Characteristics of the not economically active - South Africa...19 Table 6: Socio-demographic characteristics - South Africa...20 Table 7: Involvement in non-market activities and labour market status by province...21 Table 7: Involvement in non-market activities and labour market status by province (concluded).22 Appendix 2: Coefficient of variation for labour force characteristics by sex...23 Appendix 2.1: Coefficient of variation for labour force characteristics by population group...24 Appendix 2.2: Coefficient of variation for labour force characteristics by province...25 Appendix 2.2: Coefficient of variation for labour force characteristics by province (Concluded)...26 Appendix 3.1: Coefficient of variation for the employed by industry and sex...27 Appendix 3.4: Coefficient of variation for the employed by province and sector...28 Appendix 3.5: Coefficient of variation for the employed by sex and occupation...29
v 1. Introduction The Quarterly Labour Force Survey (QLFS) is a household-based sample survey conducted by Statistics South Africa (Stats SA). It collects data on the labour market activities of individuals aged 15 years or older who live in South Africa. Starting in 2005, Stats SA undertook a major revision of the Labour Force Survey (LFS) which had been conducted twice per year since 2000. This revision resulted in changes to the survey methodology, the survey questionnaire, the frequency of data collection and data releases, and the survey data capture and processing systems. The redesigned labour market survey is the QLFS, which is now the principal vehicle for disseminating labour market information on a quarterly basis. This report presents the key findings of the QLFS conducted in July September, (Q3:). This report also discusses the methodology used to derive the link factors which will be available at www.statssa.gov.za/qlfs/index.asp. Revised labour market indicators (March series) are already available 1 and link factors for the September series will be published in March 2009. The questions in the LFS that have not been included in the core QLFS questionnaire are currently under review and may be included as an annual supplement, subject to stakeholder consultations. 2. Key changes in reporting The QLFS cut-off for inclusion in the working age population is now set at 15 64 years to improve international comparability. This revision has little or no impact on the data presented in this report. The QLFS employment indicators include only those engaged in market production activities. The number of persons engaged in non-market production activities 2 such as subsistence farming and collecting wood/dung and fetching water etc., is reported separately for users who require greater detail. Discouraged work-seekers are persons who did not have work, but wanted to work and were available to work but did not seek work or try to start a business in the reference period because: they had lost hope of finding work; or they did not have the requisite skills or qualifications; or they believed that no jobs were available in the area. The informal sector (excluding agriculture) comprises two broad groups 3. The first group consists of employers, own-account workers and persons helping unpaid in their household business, whose business is not registered for either VAT or income tax. The second group are employees working in establishments that employ less than five employees and do not deduct income tax from their salaries/wages. Informal employment indicators relate to persons who work in precarious employment situations, irrespective of whether or not the entity for which they work is in the formal or informal sector. In the South African context, persons in informal employment consist of those in the informal sector, plus employees in the formal sector, and persons working in private households: who do not have a written contract of employment, and whose employers do not contribute to a pension or medical aid plan on their behalf. In effect, persons identified as being in informal employment are not entitled to all of these benefits. Underemployment refers to employed persons who worked less than 35 hours in the reference week but were willing and available to work longer hours. Underutilised labour comprises underemployed persons, plus unemployed persons, plus discouraged work-seekers. Within the unemployed, five categories have been identified as follows: o New entrants into the labour market o Job-losers o Job-leavers o Re-entrants 1 www.statssa.gov.za 2 Non-market production activities are production activities for own final use 3 The definition of the informal sector is subject to review pending the outcome of final consultations with the ILO
vi o Last worked more than five years prior to the interview 3. Highlights of the results Table A: Key labour market indicators Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Key indicators Thousand Thousand Thousand Per cent Population 15 64 yrs 30 705 30 801 96 0,3 Labour force 17 844 17 777-67 -0,4 Employed (Market production activities) 13 729 13 655-74 -0,5 Formal sector (Non-agricultural) 9 415 9 439 24 0,3 Informal sector (Non-agricultural) 2 340 2 175-165 -7,1 Agriculture 790 767-23 -2,9 Private households 1 185 1 274 89 7,5 Unemployed 4 114 4 122 8 0,2 Not economically active 12 861 13 024 163 1,3 Discouraged work-seekers 1 079 1 071-8 -0,7 Other (not economically active) 11 783 11 953 170 1,4 Rates Percent Percentage points Unemployment rate 23,1 23,2 0,1 - Employed / population ratio (Absorption) 44,7 44,3-0,4 - Labour force participation rate 58,1 57,7-0,4 - Note: Employed persons are those engaged in market production activities only. Table A shows that the working age population rose from 30,7 million in the second quarter of (Q2:) to 30,8 million in the third quarter of (Q3:) an increase of 96 thousand persons, and equivalent to a rise of 0,3% over the period. Over the same period, the labour force (i.e. the sum of the employed and the unemployed) decreased by 0,4% to 17,8 million in Q3:. In Q3:, the number of employed persons was 0,5% lower than in Q2: (a decline of 74 thousand). This was largely on account of a fall in informal sector employment (non-agricultural) from 2,3 million in Q2: to 2,2 million in Q3: down 165 thousand (7,1%). Formal sector employment gains of 24 thousand (up 0,3%) in Q3:, were therefore more than offset by the employment contraction in the informal sector. Following the quarterly decline of 77 thousand among persons who were unemployed, in Q2:, the third quarter results indicate that the number of unemployed persons rose by 8 thousand to 4,1 million on account of an increase among men (up 62 thousand) (Table B). The number of not economically active persons rose by 163 thousand from 12,9 million in Q2: to 13,0 million in Q3: a quarterly increase of 1,3%. This increase suggests that some persons who had previously been employed in the second quarter may have become not economically active during the third quarter of the year. The unemployment rate was 23,1% in Q2: and 23,2% in Q3:. However, the stability in the unemployment rate masks a decline among women (down from 26,8% in the second quarter to 26,3%% in the third quarter), and an increase among men (up from 19,9% in the second quarter to 20,6% in the third quarter). Table A also shows that the percentage of persons in the South African working age population with jobs was stable - at 44,7% in Q2: and 44,3% in Q3:. In similar vein, the labour force declined by 67
vii thousand, such that the participation rate was 58,1% in the second quarter and 57,7% in the third quarter. Table B: Key labour market indicators by sex Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Thousand Thousand Thousand Per cent Employed Male 7 696 7 621-75 -1,0 Female 6 033 6 034 1 0,0 Total 13 729 13 655-74 -0,5 Unemployed Male 1 910 1 972 62 3,2 Female 2 204 2 150-54 -2,5 Total 4 114 4 122 8 0,2 Labour force Male 9 606 9 593-13 -0,1 Female 8 237 8 184-53 -0,6 Total 17 844 17 777-67 -0,4 Not economically active Male 5 015 5 081 66 1,3 Female 7 846 7 943 97 1,2 Total 12 861 13 024 163 1,3 Unemployment rate Percent Percentage points Male 19,9 20,6 0,7 - Female 26,8 26,3-0,5 - Average 23,1 23,2 0,1 - Note: Employed persons are those engaged in market production activities only. 4. Employment in market production activities 4.1. Industry and occupation Table C: Employment by industry Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Jul Sep Industry Thousand Thousand Thousand Percent % share Agriculture 790 767-23 -2,9 5,6 Mining 346 314-32 -9,2 2,3 Manufacturing 1 968 1 917-51 -2,6 14,0 Utilities 97 99 2 2,1 0,7 Construction 1 138 1 102-36 -3,2 8,1 Trade 3 105 3 176 71 2,3 23,3 Transport 774 769-5 -0,6 5,6 Finance 1 687 1 632-55 -3,3 12,0 Community and social services 2 635 2 603-32 -1,2 19,1 Private households 1 185 1 274 89 7,5 9,3 Total 13 729 13 655-74 -0,5 100,0 Note: Employed persons are those engaged in market production activities only.
viii Table C shows that in Q3: the trade industry provided the largest number of jobs (3,2 million or 23,3% of total employment) and that private households and the trade industry accounted for the largest quarterly increases in employment. In addition, the third quarter expansion in employment in private households (up 89 thousand) and trade (up 71 thousand), was more than offset by a contraction in all the other sectors (except the utilities), reversing all of the quarterly employment gains that had occurred in the second quarter. Table D: Employment by occupation Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Jul Sep Occupation Thousand Thousand Thousand Percent % share Manager 993 1 054 61 6,1 7,7 Professional 789 727-62 -7,9 5,3 Technician 1 454 1 485 31 2,1 10,9 Clerk 1 450 1 462 12 0,8 10,7 Sales and services 1 749 1 780 31 1,8 13,0 Skilled agriculture 95 99 4 4,2 0,7 Craft 1 946 1 881-65 -3,3 13,8 Plant/machine operator 1 161 1 208 47 4,0 8,8 Elementary 3 137 2 960-177 -5,6 21,7 Domestic worker 953 996 43 4,5 7,3 Other 1-1 0,0 Total 13 729 13 655-74 -0,5 100,0 Note: Employed persons are those engaged in market production activities only. Table D shows that in both quarters, persons engaged in elementary work accounted for the largest share of total employment (21,7% in Q3:) and that the decline in employment in this occupation category by 177 thousand also contributed the most to the quarterly decline in employment in Q3:. The second largest quarterly decline in Q3: occurred among craft workers (down 65 thousand), followed by professionals (down 62 thousand). 4.2. Informal employment The distinction between the formal and informal sector on the one hand and formal and informal employment on the other, has become increasingly important in recent years. It is widely recognised, internationally, that growing numbers of employed persons who work in formal sector establishments do not have access to basic benefits. The focus on informal employment is therefore to identify persons who work in precarious employment situations, irrespective of whether or not the entity for which they work is in the formal or informal sector. Against this background, Figure 1 shows that in the South African context, persons in informal employment consist of those in the informal sector; plus employees in the formal sector and persons working in private households: who do not have a written contract of employment, and whose employers do not contribute to a medical aid plan or a pension on their behalf. In effect, persons identified as being in informal employment are not entitled to all of these benefits.
ix Figure 1: Deriving informal employment in the QLFS Employed: Market production activities (including agriculture) Informal sector Employers, ownaccount, employees Helping unpaid in their household business Formal sector Employees Employed in private households - Entitled to medical aid from employer; or - Contribution to pension plan by employer; or - Written contract of employment No No Informal employment* * Excludes employers and own-account workers who are in the formal sector that do not have either medical aid or pension plans. Table E: Informal employment by sex Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change JulSep Thousand Thousand Thousand Percent % share Both sexes Formal employment 8 157 8 263 106 1,3 60,5 Informal employment 4 915 4 694-221 -4,5 34,4 Other employment* 657 698 41 6,2 5,1 Total 13 729 13 655-74 -0,5 100,0 Men Formal employment 4 805 4 824 19 0,4 63,3 Informal employment 2 432 2 287-145 -6,0 30,0 Other employment* 459 510 51 11,1 6,7 Total 7 696 7 621-75 -1,0 100,0 Women Formal employment 3 352 3 439 87 2,6 57,0 Informal employment 2 484 2 407-77 -3,1 39,9 Other employment* 197 189-8 -4,1 3,1 Total 6 033 6 035 1 0,0 100,0 Note: Other employment refers to employers and own-account workers who are not in the informal sector. For this group, the notion of their employer contributing to medical aid or pension plans or having written contracts of employment is not relevant.
x Table E shows that the working conditions of more than one in every three employed persons (34,4% in Q3:) satisfied the criteria for their inclusion in the measure of informal employment. They were either working in the informal sector, working in private households, or they were employees in formal sector establishments without basic benefits such as medical aid or pension plan arrangements to which their employer contributed. In addition, they also did not have a written contract of employment from their employer. Table E also shows that whereas 39,9% of employed women lacked adequate employment conditions; among men, relatively fewer (30,0%) were in a similar situation. 4.3. Comparison of formal sector employment in the QLFS and QES This section compares the employment estimates of Q2: from the Quarterly Employment Survey with the corresponding estimates from Q2: of the QLFS (See Table F). In all countries that measure employment in these two ways, the estimates of employment derived from household surveys and establishment surveys differ. In the South African context, a survey of registered businesses obviously yields employment estimates only for registered businesses, which in turn means that the QES can provide estimates of employment only for the formal sector. The QLFS, however, being a survey of households, provides estimates of employment in both the formal and informal sectors. The difference in type of respondents in the QES and QLFS means that differences in estimates of formal sector employment between the QES and QLFS are to be expected. The reasons for these differences include: In the QLFS, the determination that someone is employed in the formal sector is based on answers provided by survey respondents. Where proxy respondents are providing the information, they may not be sufficiently informed. The estimates of employment by industry obtained from the QLFS are based on responses to survey questions, and are dependent on the respondents knowledge of the industry of the business in which they are employed. On the other hand, the estimates of employment by industry from the QES (and other establishment surveys) are based on the industry classification of the responding businesses on Stats SA s business register. The industry codes on the business register are based on detailed knowledge of the main activities of the businesses. Both the QLFS and QES are sample surveys and are, therefore, subject to sampling variability. Even in the absence of all other sources of difference, this would result in differences in the two estimates. In the QES, employers working in the enterprise who are not remunerated through the firm s payroll are not included in the count of employment in the firm. The reference periods for the two surveys differ. The QES refers to average employment over a quarter while the QLFS refers to average employment in the middle two weeks of each month in the quarter. During periods of rapid change in employment levels this difference in reference periods will contribute to the difference in employment between the two surveys. Table F: Formal sector employment according to the QLFS and the QES of April June QLFS QES Difference QLFS QES Industry Thousand Thousand Thousand % share % share Mining 341 517 176 3,9 6,1 Manufacturing 1 661 1 317-344 18,9 15,6 Utilities 95 59-36 1,1 0,7 Construction 740 474-266 8,4 5,6 Trade 1 831 1 727-104 20,9 20,4 Transport 495 363-132 5,6 4,3 Finance (including business services) 1 378 1 906 528 15,7 22,5 Community services (excluding domestic workers) 2 235 2 105-130 25,5 24,9 Total 8 776 8 467-309 100,0 100,0 Note: Total excludes: agriculture, private households, other and unspecified
xi 5. Underutilised labour The unemployment rate is widely used to gauge the performance of the labour market and the economy as a whole. However, the ILO suggests that the problem in developing countries is not so much unemployment but rather the lack of decent and productive work, which results in various forms of labour underutilisation 4. In light of this, and to provide a comprehensive picture of the employment constraints in the South African labour market, Stats SA measures underutilised labour as the sum of persons who are underemployed (time-related), plus those who are unemployed, plus those who are discouraged, according to the following definitions: 1. Persons in time-related underemployment are employed persons who were willing and available to work additional hours, whose total number of hours actually worked during the reference period was below 35 hours per week. At this juncture, no attempt is made to measure other forms of underemployment such as occupation or income related underemployment, as a result, this component of underutilised labour is perhaps underestimated. 2. Unemployed persons are persons aged 15 64 years who were not employed during the reference week but were available for work and: had actively looked for work in the past four weeks (ending with the reference week); or had not actively looked for work in the past four weeks but had a job or business to start at a definite date in the future. 3. Discouraged work-seekers are persons who wanted to work but did not seek work or try to start a business during the reference period because: they had lost hope of finding work; or they were unable to find work requiring their skills; or they felt that no jobs were available in the area. Table G: Underutilised labour in the context of the working-age population Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Jul Sep Thousand Thousand Thousand Percent % share a) Time-related underemployment 2 095 2 019-76 -3,6 30,7 b) Unemployed 4 114 4 122 8 0,2 54,1 c) Discouraged work-seekers 1 079 1 071-8 -0,7 15,2 d) Underutilised labour (a+b+c) 7 288 7 212-76 -1,0 100,0 e) Other employed persons 11 634 11 636 2 0,0 - f) Other not economically active 11 783 11 953 170 1,4 - g) Working-age (d+e+f) 30 705 30 801 96 0,3 - Percent Percentage points Underutilised labour as % of the working- age (d / g x 100) 23,7 23,4-0,3 - - Underutilised labour declined for the second consecutive quarter. In Q3: 7,2 million persons in the working age population were underutilised down from 7,3 million in Q2: and as many as 7,7 million in Q1:. This translates into a decline of 278 thousand persons in Q2: and an additional 76 thousand persons in Q3:. In Q3:, the contraction was due solely to a decline of 76 thousand persons in time-related underemployment, since the decline in the number of discouraged work-seekers (down 8 thousand) was matched by an equivalent increase in the number of unemployed persons (up 8 thousand). 4 Key Indicators of the Labour Market www.ilo.org/kilm
xii 6. The unemployed population Unemployed persons are persons aged 15 64 years who were not employed during the reference week but were available for work and: had actively looked for work in the past four weeks (ending with the reference week); or had not actively looked for work in the past four weeks but had a job or business to start at a definite date in the future. Table H: Unemployed by sex Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Unemployed Thousand Thousand Thousand Percent Men 1 910 1 972 62 3,2 Women 2 204 2 150-54 -2,5 Total 4 114 4 122 8 0,2 Table H shows that the number of unemployed persons was virtually unchanged in Q3: compared with Q2:. The quarterly decline in unemployment among women in Q3: (down 54 thousand) was more than offset by an increase of 62 thousand among men. 6.1. Other characteristics of the unemployed A useful dimension to the unemployment picture combines the reasons given by unemployed persons for not working during the reference week with their circumstances prior to becoming unemployed as follows: New entrants into unemployment are persons who were unemployed during the reference period that had never worked before. Job losers are unemployed persons who had been working during the 5 years prior to becoming unemployed and: they had lost their job; or they had been laid off; or the business in which they had previously worked had been sold or had closed down. Unemployed job leavers are those among the unemployed who had been working during the 5 years prior to becoming unemployed and had stopped working at their last job for any of the following reasons: Caring for own children/relatives; Pregnancy; Other family/community responsibilities; Going to school; Changed residence; Retired; or Other reasons Unemployed re-entrants to the labour force are unemployed persons who had worked before, and whose main activity before looking for work was either managing a home or going to school. Last worked more than five years prior to the interview. A recall period of five years was set to ensure greater reliability of the information collected from respondents.
xiii Table I: Characteristics of the unemployed Unemployed Apr-Jun Jul-Sep Q:2 to Q:3 change Q:2 to Q:3 change Jul-Sep Thousand Thousand Thousand Percent % share Job-losers 1 172 1 268 96 8,2 30,8 Job-leavers 402 386-16 -4,0 9,4 New entrants 1 746 1 745-1 -0,1 42,3 Re-entrants 253 185-68 -26,9 4,5 Worked 5yrs or more in the past 541 538-3 -0,6 13,0 Total 4 114 4 122 8 0,2 100,0 Table I shows that new-entrants account for the single largest share of total unemployment (42,3% in Q3:) and the quarterly increase among job-losers (up by 96 thousand) was largely offset by a decrease of 68 thousand among re-entrants and a decrease of 16 thousand among job-leavers. Figure 2: Characteristics of the unemployed by sex, Q3: % Male Female 50,0 40,0 30,0 20,0 10,0 0,0 Re-entrants Job leavers Other Job losers New entrants Male 3,3 8,2 13,0 37,4 38,0 Female 5,5 10,5 13,1 24,7 46,3 Figure 2 highlights the gender differences among unemployed persons as follows: Among unemployed men, 38,0% were new-entrants to the labour force and an additional 37,4% were job-losers. In contrast, among unemployed women 46,3% were new-entrants to the labour force and an additional 24,7% were job-losers. Compared to unemployed men, higher percentages of unemployed women were jobleavers (10,5%) and re-entrants (5,5%) 6.2. Long-term unemployment The length of time that an unemployed person has been looking for work or trying to start a business is an important indicator of labour market performance and that person s prospects. The longer the duration of job-search, the worse the unemployment situation becomes for people who have been seeking work without success particularly in countries where the social grant system is partial or non-existent.
xiv Table J: Long-term unemployment Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Thousand Thousand Thousand Percent Unemployed Long-term unemployment (1 year or longer) 2 405 2 415 10 0,4 Short-term unemployment (less than 1 year) 1 710 1 707-3 -0,2 Total 4 114 4 122 8 0,2 Long-term unemployment Percent Percentage points Proportion of the labour force 5 13,5 13,6 0,1. Proportion of the unemployed 58,5 58,6 0,1. Table J shows that more than half of all unemployed persons (58,6% in Q3:) had been looking for work or trying to start a business for one year or longer. Figure 3: Unemployment rate by province % 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 WC GP KZN NC FS MP RSA NW EC LP Q2:08 19,1 21,8 22,2 24,7 25,9 24,8 23,1 22,9 24,8 30,6 Q3:08 19,7 21,8 22,0 22,7 22,9 23,2 23,2 26,7 27,4 29,5 There was a quarterly decline in the unemployment rate in five of the nine provinces in Q3: (Figure 3). However, the increase in provinces such as North West (up 3,8 percentage points) and Eastern Cape (up 2,6 percentage points) resulted in the national average of 23,2% being virtually unchanged from Q2: (23,1%). The unemployment rate among the African/Black population group was 27,0% in Q2: and 27,4% in Q3: (See Figure 4). Among all the other population groups, the unemployment rate declined in Q3: from 19,5% to 19,1% among coloureds, from 12,7% to 11,7% among Indians; and from 4,6% to 4,1% among whites. 5 Also referred to as the long-term unemployment rate
xv Figure 4: Unemployment rate by population group, Q3: % 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 African Coloured Indian White Average Male 24,3 18,8 9,9 3,6 20,6 Female 30,9 19,5 14,7 4,8 26,3 Both sexes 27,4 19,1 11,7 4,1 23,2 Figure 4 shows that in the third quarter, the unemployment rate among African/Black women (30,9%) was more than seven times that of white men (3,6%). 7. Characteristics of the not economically active population Table K: The not economically active population Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Jul Sep Not economically active Thousand Thousand Thousand Percent % share Student 5 670 5 718 48 0,8 43,9 Home-maker 2 496 2 579 83 3,3 19,8 Illness/disability 1 794 1 822 28 1,6 14,0 Too old/young to work 978 1 014 36 3,7 7,8 Discouraged 1 079 1 071-8 -0,7 8,2 Other 845 820-25 -3,0 6,3 Total 12 861 13 024 163 1,3 100,0 The not economically active population increased from 12,9 million in Q2: to13,0 million in Q3:. This was equivalent to an increase of 163 thousand persons in Q3:. Table K shows that in Q3:, students accounted for the largest number of not economically active persons (5,7 million or 43,9% of the total) followed by home-makers ( 2,6 million or 19,8% of the total). And notably, these two groups contributed the most to the increase of 163 thousand among the not economically active. 8. Non-market production activities (household production for own final use) As noted earlier, persons engaged in non-market production activities (i.e. household production for own final use) are not included as employed in the QLFS employment indicators 6, instead their job search and availability status enables their categorisation into unemployed or not economically active. 6 For more details see Guide to the QLFS at www.statssa.gov.za/qlfs/index.asp
xvi Table L shows that in both Q2: and Q3:, as many as 3,9 million persons were engaged in at least one non-market production activity. Those involved in fetching water and collecting wood/dung for household use accounted for the largest number of persons, followed by subsistence agriculture. Table L: Engagement in non-market production activities by type of activity Apr Jun Jul Sep Q:2 to Q:3 change Q:2 to Q:3 change Non-market production activities Thousand Thousand Thousand Percent Subsistence farming 1 324 1 214-110 -8,3 Fetching water or collecting wood/dung 3 118 3 260 142 4,6 Producing other goods for household use 93 66-27 -29,0 Construction or major repairs to own house etc. 237 222-15 -6,3 Hunting or fishing for household use 19 15-4 -21,1 Involvement in at least one activity* 3 920 3 920 0 0,0 Unemployed 730 692-38 -5,2 Not economically active 3 190 3 228 38 1,2 *Non-market production activities do not add up to a total since persons could have been engaged in more than one activity. Among those engaged in at least one non-market production activity, in both quarters the vast majority were not economically active. Figure 5: Involvement in at least one non-market activity by province, Q3: Thousand Unemployed NEA 1 400 1 200 1 000 800 600 400 200 0 WC FS GP NC NW MP LP EC KZN NEA 5 32 52 59 146 267 771 890 1 007 Unemployed 12 8 59 20 49 65 150 131 200 Figure 5 shows that non-market production activities are predominantly a feature of the situation in KwaZulu-Natal, Eastern Cape and Limpopo, and that persons who engage in such activities are predominantly classified as not economically active.
xvii PJ Lehohla Statistician General: Statistics South Africa
xviii 9. Link factors Revised labour market indicators have already been published to enable historical continuity with the LFS March series. These historical series are based on link factors computed on the basis of the overlap between the LFS conducted in March and the QLFS conducted in Jan March. A similar process will be undertaken to link the QLFS conducted in July September with the LFS conducted in September. 9.1. Revision of historical data The purpose of historical revision is to make the LFS estimates from 2000 to 2007 comparable with the QLFS data starting in. Being comparable means that measures of change that cross the 2007/ threshold are valid. Revising historical LFS data means that the revised LFS data for, say, March 2002 represent Stats SA s best estimate of what the QLFS would have shown had it been conducted in 2002. The historical revision is carried out in two stages. In the first stage a set of high-level variables is chosen. For a number of vectors derived from these variables, ratios of the QLFS estimate to the LFS estimate are calculated. One set of ratios is obtained from the LFS (March ) and the QLFS (Q1: ) and a second set from the LFS (September ) and the QLFS (Q3: ). The two sets of link factors obtained from this process are then used to adjust the corresponding vectors derived from LFS estimates under the constraint that the vectors are consistent with the population estimates. In addition, the vectors must be internally consistent e.g. the total number of employed persons by occupation must be the same as the total number of employed persons by industry. In the second stage, the historical LFS data files are then re-weighted using the above vectors as control totals. Historically revised LFS data are then tabulated from these re-weighted files. 10. Technical notes 10.1. Response details Table (i): Response rates by province Province 10.2. Survey requirements and design Jul Sep Percent Western Cape 86,3 Eastern Cape 97,1 Northern Cape 88,4 Free State 94,2 KwaZulu-Natal 96,3 North West 95,3 Gauteng 89,5 Mpumalanga 96,9 Limpopo 98,0 South Africa 93,4 The Quarterly Labour Force Survey frame has been developed as a general purpose household survey frame that can be used by all other household surveys irrespective of the sample size requirement of the survey. The sample size for the QLFS is roughly 30 000 dwellings per quarter.
xix The sample is based on information collected during the 2001 Population Census conducted by Stats SA. In preparation for the 2001 census, the country was divided into 80 787 enumeration areas (EAs). Stats SA s household-based surveys use a Master Sample of Primary Sampling Units (PSUs) which comprises of EAs that are drawn from across the country. The sample is designed to be representative at the provincial level and within provinces at the metro/nonmetro level. Within the metros, the sample is further distributed by geography type. The four geography types are: urban formal, urban informal, farms and tribal. This implies, for example, that within a metropolitan area the sample is representative at the different geography types that may exist within that metro. The current sample size is 3 080 PSUs. It is divided equally into four sub-groups or panels called rotation groups. The rotation groups are designed in such a way that each of these groups has the same distribution pattern as that which is observed in the whole sample. They are numbered from one to four and these numbers also correspond to the quarters of the year in which the sample will be rotated for the particular group. The sample for the redesigned Labour Force Survey (i.e. the QLFS) is based on a stratified two-stage design with probability proportional to size (PPS) sampling of primary sampling units (PSUs) in the first stage, and sampling of dwelling units (DUs) with systematic sampling in the second stage. 10.3. Sample rotation Each quarter, ¼ of the sampled dwellings rotate out of the sample and are replaced by new dwellings from the same PSU or the next PSU on the list. Thus, sampled dwellings will remain in the sample for four consecutive quarters. It should be noted that the sampling unit is the dwelling, and the unit of observation is the household. Therefore, if a household moves out of a dwelling after being in the sample for, say two quarters and a new household moves in then the new household will be enumerated for the next two quarters. If no household moves into the sampled dwelling, the dwelling will be classified as vacant (unoccupied). 10.4. Weighting The sampling weights for the data collected from the sampled households are constructed so that the responses could be properly expanded to represent the entire civilian population of South Africa. The weights are the result of calculations involving several factors, including original selection probabilities, adjustment for non-response, and benchmarking to known population estimates from the Demographic Division of Stats SA. 10.5. Non-response adjustment In general, imputation is used for item non-response (i.e. blanks within the questionnaire); edit failure (i.e. invalid or inconsistent responses). The eligible households in the sampled dwellings can be divided into two response categories: respondents and non-respondents and weight adjustment is applied to account for the non-respondent households (e.g. refusal, no contact, etc.). 10.6. Final survey weights The final survey weights are constructed using regression estimation to calibrate to the known population counts at the national level population estimates (which are supplied by the Demography Division) crossclassified by 5-year age groups, gender and race, and provincial population estimates by broad age groups. The 5-year age groups are: 0 4, 5 9, 10 14, 55 59, 60 64, and 65 and over. The provincial
xx level age groups are: 0 14, 15 34, 35-64, and 65 years and over. The calibrated weights are constructed such that all persons in a household would have the same final weight. 10.7. Estimation The final survey weights are used to obtain the estimates for various domains of interest, e.g. number of persons employed in agriculture in the province of Western Cape, number of females employed in manufacturing, etc. 10.8. Reliability of the survey estimates Because estimates are based on sample data, they differ from figures that would have been obtained from complete enumeration of the population using the same instrument. Results are subject to both sampling and non-sampling errors. Non-sampling errors include biases from inaccurate reporting, processing, and tabulation etc., as well as errors from non-response and incomplete reporting. These types of errors cannot be measured readily. However, to the extent possible, non-sampling errors can be minimised through the procedures used for data collection, editing, quality control, and non-response adjustment. The variances of the survey estimates are used to measure sampling errors. The variance estimation methodology is discussed below. (i) Variance estimation The most commonly used methods for estimating variances of survey estimates from complex surveys, such as the QLFS, are the Taylor-series Linearization, Jackknife Replication, Balanced Repeated Replication (BRR), and Bootstrap methods (Wolter, 2007) 7. The Fay s BRR method has been used for variance estimation in the QLFS because of its simplicity. (ii) Coefficient of variation It is more useful in many situations to assess the size of the standard error relative to the magnitude of the characteristic being measured (the standard error is defined as the square root of the variance). The coefficient of variation ( cv ) provides such a measure. It is the ratio of the standard error of the survey estimate to the value of the estimate itself expressed as a percentage. It is very useful in comparing the precision of several different survey estimates, where their sizes or scale differ from one another. (iii) P-value If p-value <0.01 then the difference is highly significant; if p-value is between 0.01 and 0.05 then the difference is significant; and if p-value >0.05 then the difference is not significant 11. Definitions Discouraged work-seeker is a person who was not employed during the reference period, wanted to work, was available to work/start a business but did not take active steps to find work during the last four weeks, provided that the main reason given for not seeking work was any of the following: no jobs available in the area; unable to find work requiring his/her skills; lost hope of finding any kind of work. 7 Wolter, K. M. (2007), Introduction to Variance Estimation, 2 nd Edition, Springer-Verlag: New York.
xxi Economic activities are those that contribute to the production of goods and services in the country. There are two types of economic activities, and they are: (1) Market production activities (work done for others and usually associated with pay or profit); and (2) Non-market production activities (work done for the benefit of the household e.g. subsistence farming) Employed persons are those aged 15 64 years who, during the reference week: did any work for at least one hour; or had a job or business but were not at work (temporarily absent). Employment-to-population ratio/(labour absorption rate) is the proportion of the working age population that is employed. Informal employment identifies persons who are in precarious employment situations irrespective of whether or not the entity for which they work is in the formal or informal sector. Persons in informal employment therefore consist of all persons in the informal sector; employees in the formal sector; and persons working in private households who are not entitled to basic benefits such as pension or medical aid contributions from their employer, and who do not have a written contract of employment. Informal sector: (This definition is subject to review pending final consultations with the ILO). The informal sector has the following two components: i) Employees working in establishments that employ less than five employees, who do not deduct income tax from their salaries/wages; ii) Employers, own account workers and persons helping unpaid in their household business who are not registered for either income tax or value-added tax. The labour force comprises all persons who are employed plus all persons who are unemployed. Labour force participation rate is the proportion of the working age population that is either employed or unemployed. Long-term unemployment: Persons in long-term unemployment are those individuals among the unemployed who were without work and trying to find a job or start a business for one year or more. Not economically active: Persons aged 15 64 years who are neither employed nor unemployed in the reference week. Persons in underemployment (time-related) are employed persons who were willing and available to work additional hours, whose total number of hours actually worked during the reference period was below 35 hours per week. Underutilised labour comprises three groups as follows: persons who are underemployed, persons who are unemployed, and persons who are discouraged. Unemployed persons are those (aged 15 64 years) who: a) Were not employed in the reference week. b) Actively looked for work or tried to start a business in the four weeks preceding the survey interview. c) Were available for work i.e. would have been able to start work or a business in the reference week. Unemployment rate is the proportion of the labour force that is unemployed. The working-age population comprises all persons aged 15 64 years.
1 Table 1: Population of working age (15-64 years) Qrt to Qrt Qrt to Qrt change change Thousand Thousand Thousand Percent Both sexes 30 705 30 801 96 0,3 Women 16 084 16 127 43 0,3 Men 14 621 14 674 53 0,4 All population groups 30 705 30 801 96 0,3 Black/African 23 784 23 872 88 0,4 Coloured 2 934 2 945 11 0,4 Indian/Asian 874 878 4 0,5 White 3 113 3 106-7 -0,2 South Africa 30 705 30 801 96 0,3 Western Cape 3 450 3 462 12 0,3 Eastern Cape 3 949 3 961 12 0,3 Northern Cape 703 704 1 0,1 Free State 1 854 1 857 3 0,2 KwaZulu Natal 6 273 6 295 22 0,4 North West 2 167 2 171 4 0,2 Gauteng 7 076 7 095 19 0,3 Mpumalanga 2 180 2 188 8 0,4 Limpopo 3 053 3 068 15 0,5 Due to rounding, numbers do not necessarily add up to totals.
2 Table 2: Labour force characteristics by sex - All population groups Qrt to Qrt Qrt to Qrt change change Thousand Thousand Thousand Percent Both sexes. Population 15-64 yrs 30 705 30 801 96 0,3 Labour Force 17 844 17 777-67 -0,4 Employed 13 729 13 655-74 -0,5 Formal sector (Non-agricultural) 9 415 9 439 24 0,3 Informal sector (Non-agricultural) 2 340 2 175-165 -7,1 Agriculture 790 767-23 -2,9 Private households 1 185 1 274 89 7,5 Unemployed 4 114 4 122 8 0,2 Not economically active 12 861 13 024 163 1,3 Discouraged work-seekers 1 079 1 071-8 -0,7 Other(not economically active) 11 783 11 953 170 1,4 Unemployment rate 23,1 23,2 0,1 Employed / population ratio (Absorption) 44,7 44,3-0,4 Labour force participation rate 58,1 57,7-0,4 Women Population 15-64 yrs 16 084 16 127 43 0,3 Labour Force 8 237 8 184-53 -0,6 Employed 6 033 6 034 1 0,0 Formal sector (Non-agricultural) 3 767 3 777 10 0,3 Informal sector (Non-agricultural) 1 084 994-90 -8,3 Agriculture 253 257 4 1,6 Private households 928 1 006 78 8,4 Unemployed 2 204 2 150-54 -2,5 Not economically active 7 846 7 943 97 1,2 Discouraged work-seekers 663 652-11 -1,7 Other(not economically active) 7 183 7 291 108 1,5 Unemployment rate 26,8 26,3-0,5 Employed / population ratio (Absorption) 37,5 37,4-0,1 Labour force participation rate 51,2 50,7-0,5 Men Population 15-64 yrs 14 621 14 674 53 0,4 Labour Force 9 606 9 593-13 -0,1 Employed 7 696 7 621-75 -1,0 Formal sector (Non-agricultural) 5 648 5 662 14 0,2 Informal sector (Non-agricultural) 1 256 1 181-75 -6,0 Agriculture 537 510-27 -5,0 Private households 256 267 11 4,3 Unemployed 1 910 1 972 62 3,2 Not economically active 5 015 5 081 66 1,3 Discouraged work-seekers 416 420 4 1,0 Other(not economically active) 4 599 4 662 63 1,4 Unemployment rate 19,9 20,6 0,7 Employed / population ratio (Absorption) 52,6 51,9-0,7 Labour force participation rate 65,7 65,4-0,3 Due to rounding, numbers do not necessarily add up to totals. Note: Employment refers to market production activities
3 Table 2.1: Labour force characteristics by population group Qrt to Qrt Qrt to Qrt change change Thousand Thousand Thousand Percent South Africa. Population 15-64 yrs 30 705 30 801 96 0,3 Labour Force 17 844 17 777-67 -0,4 Employed 13 729 13 655-74 -0,5 Unemployed 4 114 4 122 8 0,2 Not economically active 12 861 13 024 163 1,3 Unemployment rate 23,1 23,2 0,1 Employed / population ratio (Absorption) 44,7 44,3-0,4 Labour force participation rate 58,1 57,7-0,4 Black/African Population 15-64 yrs 23 784 23 872 88 0,4 Labour Force 13 238 13 172-66 -0,5 Employed 9 662 9 567-95 -1,0 Unemployed 3 576 3 604 28 0,8 Not economically active 10 546 10 700 154 1,5 Unemployment rate 27,0 27,4 0,4 Employed / population ratio (Absorption) 40,6 40,1-0,5 Labour force participation rate 55,7 55,2-0,5 Coloured Population 15-64 yrs 2 934 2 945 11 0,4 Labour Force 1 909 1 906-3 -0,2 Employed 1 538 1 541 3 0,2 Unemployed 372 365-7 -1,9 Not economically active 1 025 1 039 14 1,4 Unemployment rate 19,5 19,2-0,3 Employed / population ratio (Absorption) 52,4 52,3-0,1 Labour force participation rate 65,1 64,7-0,4 Indian/Asian Population 15-64 yrs 874 878 4 0,5 Labour Force 534 547 13 2,4 Employed 466 483 17 3,6 Unemployed 68 64-4 -5,9 Not economically active 340 331-9 -2,6 Unemployment rate 12,7 11,7-1,0 Employed / population ratio (Absorption) 53,3 55,0 1,7 Labour force participation rate 61,1 62,3 1,2 White Population 15-64 yrs 3 113 3 106-7 -0,2 Labour Force 2 163 2 152-11 -0,5 Employed 2 064 2 063-1 0,0 Unemployed 99 89-10 -10,1 Not economically active 951 954 3 0,3 Unemployment rate 4,6 4,1-0,5 Employed / population ratio (Absorption) 66,3 66,4 0,1 Labour force participation rate 69,5 69,3-0,2 Due to rounding, numbers do not necessarily add up to totals. Note: Employment refers to market production activities