Statistics for economic analysis and policy making in Europe Part 4 CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE EUROPEAN COMMISSION

Business cycle analysis – Overview Statistics on international trade in goods and services Labour market statistics

Statistics on international trade in goods and services Statistics on international trade in goods and services are not primarily collected for the purpose of business cycle analysis. The Statistics on international trade in goods comprise two quite different systems of data collection aiming at describing all flows of goods between Member States (intra-EU trade - Intrastat) and between Member States and the Rest of the world (extra-EU trade - Extrastat).

Statistics on international trade in goods and services Common conceptual characteristics of the two statistics are the monthly frequency and the commodity classification. Both statistics aim in principle at covering all transactions in international trade of goods, both are product-oriented. In contrast to the usual way of delineation in business statistics the scope is not defined with reference to the economic agents via activity criteria.

Statistics on international trade in goods and services In the case of Extrastat the movement of a good between a Member State and the rest of the world is the general criterion. Intrastat is applied for the provision of the statistical information on dispatches and arrivals of Community goods which are not the subject of a single administrative document. The company in the definition of the VAT system can be considered as the statistical unit, because natural or legal person registered for VAT have to provide data.

Statistics on international trade in goods and services Because both systems provide monthly information in a very detailed breakdown by goods and by Member States (Intrastat) and by partner countries (Extrastat) in value terms and in quantities, the results play an outstanding role in business cycle analysis. The price information collected in STS can be used to reach estimates in volume terms. Statistics in international trade in goods provide the information for compiling weighting schemes for calculating these price indices.

Statistics on international trade in goods and services The infra-annual estimates of international trade in goods in volume terms are of decisive importance for compiling infra-annual GDP in volume terms. Infra-annual GDP in volume terms serves as the reference series in business cycle analysis.

Statistics on international trade in goods and services Statistics on international trade in services are part of Balance of Payment Statistics. The data on international trade in services are as far not as detailed as data on international trade in goods. The specific classification system of services EBOPS is not fully compatible with other product classifications used in the EU such as the CPA.

Statistics in international trade in services Basic characteristics Statistical unit: Enterprise Scope: All sectors of the economy Reference period: Month, quarter, calendar year *) Periodicity: Monthly, quarterly, annually *) Breakdown: EBOPS, geographical breakdown *) Reference period and periodicity differ according to the detail that has to be made available

Labour market statistics Labour market statistics cover both economic and social aspects. The respondents addressed are both businesses and individuals. Labour market statistics cover short-term and structural aspects of the labour market, both for the supply and the demand side, in monetary and non-monetary terms.

Labour market statistics The Structure of earnings survey (SES) offers detailed data on earnings, gross and net and information , gender pay gap and minimum wages. The SES is only carried out in intervals of four years. The Labour cost survey (LCS) is also a survey conducted every four years measuring the level and structure of labour costs, or total expenditure borne by employers for the purpose of employing staff. SES and LCS play no role for business cycle analysis.

Labour market statistics The Labour force survey (LFS) offers information on employment, unemployment and the economically inactive residents. In the context of economic analysis the results are relevant for addressing structural questions (such as trends in labour market participation) and for business cycle analyses. Job vacancies statistics and labour cost indices are both addressing short-term aspects.

Labour market statistics Labour Force Survey – Basic characteristics The LFS is a large continuous household sample survey providing quarterly and annual results on labour market participation of people aged 15 and over as well as on persons outside the labour force. The main objective is to divide the resident population of working age (15 years and above) into three mutually exclusive and exhaustive groups - persons employed, unemployed and economically inactive persons.

Labour market statistics Labour force survey – Basic characteristics Respondents are assigned to one of these groups according to ILO standards on the basis of the information obtained through the survey questionnaire, which principally relates to their actual activity within a particular reference week. The LFS also provides data on the demographic background and inter alia various information on the labour status, employment characteristics, hours worked, search for employment, main labour status and income, etc.

Labour market statistics Labour force survey – Basic characteristics Active population: also called labour force, is the population employed or unemployed. Economically inactive persons: those who are neither employed nor unemployed.

Labour market statistics Labour force survey – Basic definitions Employed persons comprise persons aged 15 years and more who were in one of the following categories: (a) persons who during the reference week worked for at least one hour for pay or profit or family gain. (b) persons who were not at work during the reference week but had a job or business from which they were temporarily absent. This definition refers to employees as well as to self-employed persons and family workers. ‘Payment in kind‘ is also regarded as ‘pay’.

Labour market statistics Labour force survey – Core definitions In accordance with the ILO guidelines, the concept of unemployment comprises all persons above a specified age who during the reference period were: (a) 'without work', i.e. not in paid employment or self-employment; (b) 'currently available for work', i.e. were available for paid employment or self-employment during the reference period; and (c) 'seeking work', i.e. had taken specific steps in a specified recent period to seek paid employment or self-employment.

Labour market statistics Labour force survey - Core definitions The specific steps of ‘seeking work’ may include: registration at a public or private employment exchange; application to employers; checking at worksites, farms, factory gates, markets or other assembly places; placing or answering newspaper advertisements; seeking assistance of friends or relatives; looking for land, building, machinery or equipment to establish own enterprise; applying for permits and licences or financial resources, etc.

Labour market statistics Labour force survey – Core definitions Other important indicators to assess the situation on the labour market: Underemployed part-time workers: persons aged 15-74 working part-time who wish to work additional hours and are available to do so. Persons available to work but not seeking: persons aged 15-74 neither employed nor unemployed who want to work, are available for work in the next 2 weeks but are not seeking emloyment.

Labour market statistics Labour force survey – Basic definitions Persons seeking work but not immediately available; persons aged 15-74 neither employed nor unemployed who are actively seeking work during the last 4 weeks but not available for work in the next 2 weeks; found a job to start in less than 3 months and are not available for work in the next 2 weeks; found a job to start in 3 months or more; are passively seeking work during the last 4 weeks and are available for work in the next 2 weeks.

Labour market statistics Labour force survey Monthly data on unemployment; The quarterly results of the LFS are interpolated/extrapolated to monthly data using national survey data and/or national monthly series on registered unemployment. The quarterly LFS results are always used as a benchmark to ensure international comparability.

Labour market statistics Labour force survey Unemployment rates relate the number of unemployed persons to the number of persons in the labour force.  The unemployment rate is a key indicator for business cycle analysis. In business cycle theory the unemployment rate is considered to be a lagging indicator. Male, youth and long-term unemployment are considered to be more subject to cyclical fluctuations than the overall unemployment rate.

Labour market statistics Labour force survey The feature, that makes unemployment rates based on LFS results so important, is international comparability. The unemployment rates based on administrative data are dependent on social security regulations (in particular unemployment insurance) which differ considerably between Member States. The unemployment rates based on administrative data also differ in the analytical orientation. Their focus is on the utilisation of the social security system.

Labour market statistics Labour force survey Detailed quarterly data on employment is inter alia available for: Employment Self-employed Employees Temporary employment Full-time, part-time employment, underemployment Population in employment having a second job Working time

Labour market statistics Labour force survey Detailed data on the NUTS 2 level is inter alia available for: Employment rates Employment rates by gender Employment rates by age groups Unemployment rates Unemployment rates by gender Unemployment rates by age groups

Labour market statistics Labour force survey – Policy targets Examples for using LFS results as basis for monitoring progress towards targets: Europe 2020 headline targets 75 % target for employment rate 20-64; share of early school leavers under 10 %; at least 40 % of 30-34 years to have completed tertiary education Employment and social policy indicators Principal European Economic Indicators, Macroeconomic Imbalance Procedure (MIP) Sustainable development indicators.

Labour market statistics The LFS predominantly belongs to the domain of social statistics. Nevertheless, the LFS provides important information on employment, complement to the one available from business statistics. The data on unemployment and the derived unemployment rates are among the key variables required for business cycle analyses.

Labour market statistics Employment figures derived from business statistics in general and on STS in particular always refer to a strict domestic concept. They include persons engaged in the working force of a resident producers which are not residents in the same country. The results based on LFS always refer to residents in the reporting country in the definition of national accounts.

Labour market statistics This difference has become more relevant in the EU with free movement of labour across national borders. Increased employment in domestic industries in an upswing period in the business cycle is not reflected in LFS data in the case when the additional employment refers to persons not belonging to the resident population.

Labour cost index Labour cost indices are required for the analysis of the dynamics of the labour market, as indicators for assessing the competitive position of a country and for understanding the inflationary process. The Labour cost indices are computed as Laspeyres indices of labour costs per hour worked, chain linked annually and based upon a fixed structure of economic activity at NACE Rev. 2 Section level.

Labour cost index The quarterly index series are to be delivered in the following forms: (a) non-adjusted (b) working-day-adjusted (c) seasonally- and working-day adjusted

Labour cost index Basic characteristics Statistical unit: enterprise or local unit Scope: NACE Rev. 2 B to S Reference period: quarter Periodicity: quarterly Breakdown: section level of NACE Rev. 2

Job vacancy statistics Quarterly data on job vacancies (also in relation to the number of occupied jobs) are required as indicators to monitor short-term changes on the labour market. The data shall be produced on the basis of business surveys (sample survey). Job vacancy statistics provide data complementary to the data on unemployment coming from the LFS and to employment information coming from STS.

Job vacancy statistics Basic characteristics Statistical unit: “Business unit” Scope: All economic activities for business units with one employee or more except for the activities of households as employers and the activities of extra-territorial organisations and bodies. Reference period: Quarter Periodicity: Quarterly Breakdown: Section level of NACE Rev. 2

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