Appendix A - Labor market indicators

Most charts in section 2 depict aspects of the labor force. Charts 2.1 - 2.3, 2.5, 2.6, and 2.9 - 2.11 contain BLS comparative data on labor force, employment, and unemployment and are supplemented by data from OECD and ILO. This is the first set of charts discussed in this section. Charts 2.4, 2.7, 2.12, and 2.13 also show data on labor force, employment, and unemployment but are derived solely from OECD data. These are discussed as a separate group. Chart 2.8, annual hours worked per employed person, and chart 2.14, educational attainment of the adult population, are discussed individually at the end of this section.

Labor force, employment, and unemployment
(charts 2.1 - 2.3, 2.5, 2.6, 2.9 - 2.11)

BLS comparative measures of the labor force, employment, unemployment, and related indicators are used for the United States, Canada, Australia, Japan, France, Germany, Italy, the Netherlands, Sweden, and the United Kingdom. Other organizations provided the data for Mexico, Korea, New Zealand, Singapore, the EU-15, Austria, Denmark, Ireland, Norway, Portugal, and Spain.

In the BLS comparisons program, adjustments are made in each country's published data, if necessary, to provide measures approximately consistent with U.S. definitions. The data are adjusted to the U.S. concepts used in the Current Population Survey (CPS), the official source of U.S. labor force data. To adjust the data, BLS employs data from several sources, including data obtained by special request from the central statistical offices of the foreign countries. Further information on the nature of the adjustments for each country can be found in the BLS source document cited at the end of this section.

The labor force is the sum of the employed plus the unemployed; the unemployment rate is the ratio of the unemployed to the labor force. In the United States, the unemployed are those not working but available for work in the reference week, and actively seeking work in the past 4 weeks. Those persons waiting to be recalled from layoff need not be seeking work to be classified as unemployed. The employed are those persons who during the reference week did work for at least 1 hour as paid employees, worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a family member. Those temporarily absent from work but who had jobs or businesses to return to are also counted as employed. The labor force participation rate is the ratio of the labor force to the population of working age (ages 16 and over in the United States and ages 15 or 16 and over in the other countries); the employment-to-population ratio is the ratio of the employed to the population of working age. The BLS data are supplemented in charts 2.1 - 2.3, 2.5, 2.6, and 2.9 - 2.11 with data mainly from OECD; data for Singapore are from ILO. The OECD and ILO data are generally from labor force surveys that are based on the ILO guidelines for measurement of the labor force, employment, and unemployment. These guidelines are available on the Internet at http://www.ilo.org/public/english/120stat/res/ecacpop.htm.

The ILO guidelines have become standards for many countries; consequently, definitions used in labor force surveys are now broadly similar in outline and spirit if not in all of their details. The ILO guidelines facilitate cross-country comparisons because they serve to draw countries toward a common conceptual framework. The charted OECD and ILO data are reasonably comparable to the corresponding BLS data, although some adjustments for comparability that are made by BLS are not made by OECD and ILO.

OECD produces a series of "standardized unemployment rates" (SURs) that are adjusted to ILO concepts. In recent years, the OECD series yielded unemployment rates virtually identical to the BLS comparative series of unemployment rates for the countries in common to both programs, except for Canada. ILO produces a series of "ILO-comparable" measures of unemployment rates that are adapted to ILO concepts. This series is closely comparable with the results from the BLS and OECD comparisons programs.

The OECD unemployment series are used to broaden the coverage of the unemployment data on chart 2.9. The unemployment rates for the following countries are obtained from the OECD SURs: Korea, New Zealand, the EU-15, Austria, Denmark, Ireland, Norway, Portugal, and Spain. The ILO-comparable series is the source for the unemployment rate for Singapore. The unemployment rate for Mexico is not from the OECD SURs or ILO-comparable series; it is the figure from Mexico’s labor force survey as published by the OECD. It is not comparable and is somewhat understated in relation to U.S. concepts according to special BLS studies.

The OECD labor force and employment data also are used to broaden the country coverage of charts 2.1 - 2.3, 2.5, 2.6, 2.10, and 2.11. These data are not adjusted by OECD for comparability to the extent that the unemployment rates (SURs) are adjusted; OECD does not publish standardized labor force and employment figures. Data for Singapore on these charts are from the ILO-comparable series.

For a full discussion of comparability issues regarding the BLS, OECD, and ILO series, see Constance Sorrentino, "International unemployment rates: how comparable are they?" Monthly Labor Review, June 2000, pp. 3-20. This article is available on the Internet at http://www.bls.gov/opub/mlr/2000/06/art1full.pdf.

Source: BLS, "Comparative Civilian Labor Force Statistics, Ten Countries, 1960-2004," May 13, 2005, http://www.bls.gov/fls/>; BLS, LABSTAT Database, http:/www.bls.gov/data/home.htm; OECD, Labor Force Statistics 1994-2004, 2005 Ed., Paris, August 2005, parts I and II; OECD, Labor Market Statistics Database, http://www.oecd.org/; and ILO, LABORSTA ILO-Comparable Estimates Database, http://laborsta.ilo.org.

Labor force, employment, and unemployment
(charts 2.4, 2.7, 2.12, 2.13)

The charts discussed below are derived solely from OECD data sources. Data from OECD are used because the BLS labor force comparisons program does not provide indicators for participation rates by age (chart 2.4); full-time and part-time employment (chart 2.7); duration of unemployment (chart 2.12), and unemployment by educational attainment (chart 2.13).

Labor force participation rates by age (chart 2.4). The participation rate for a given age group is defined as the ratio between the total (or civilian) labor force for the age group divided by the total (or civilian) population for the age group. Two age groups are charted: youth (ages 15 or 16 to 24) and older workers (ages 55 to 64). The data are generally derived from labor force surveys. OECD has made no attempt to standardize these data to international definitions. According to OECD, international comparisons of these data must be made with caution. In countries where young people are conscripted into the armed forces, their measured participation rates will differ considerably according to whether the figures include or exclude the armed forces. Differences in the lower age limit also affect the comparability of the data.

Source: OECD, Employment Outlook, 2005 Ed., Paris, July 2005, table C.

Rates of growth in full-time and part-time employment (chart 2.7). OECD has adjusted full-time and part-time employment to a common conceptual basis, insofar as possible. Full-time employment is defined as persons usually working over 30 hours per week in their main job. Part-time employment is defined as persons usually working 30 or fewer hours per week in their main job. Data are limited to persons declaring usual hours worked.

Except for the United States, the data relate to total employment. For the United States, the data cover wage and salary employment only. This difference should not materially affect the comparisons because paid workers account for more than 90 percent of total U.S. employment. The data are obtained from labor force surveys and refer to persons ages 15 or 16 and over, except for Norway and Sweden, where the data refer to persons ages 16 to 74 and 16 to 64, respectively.

Data for Japan are not comparable to those of the other countries for two reasons: (1) the Japanese data are based on "actual hours worked" rather than "usual hours worked," and (2) part-time employment in Japan is defined as working fewer than 35 hours per week. Thus, the Japanese data should not be used for comparisons of the level of full-time and part-time work. They are used on chart 2.7 to track the broad trends in full-time and part-time work. For Korea, data also are based on “actual hours worked” rather than “usual hours worked.”

Source: OECD, Labor Market Statistics Database, http://www.oecd.org/.

Persons unemployed one year or longer as a percent of total unemployment (chart 2.12). The OECD data on duration of unemployment represent the length of time that persons unemployed have been looking for work. The OECD data have not been standardized, but they are all from labor force surveys. The data refer to persons ages 15 or 16 and over, except for Norway and Sweden, where the data refer to persons ages 16 to 74 and 16 to 64, respectively.

Source: OECD, Employment Outlook, 2005 Ed., Paris, July 2005, table G.

Ratio of unemployment rate of persons without high school degrees to that of persons with college or university degrees (chart 2.13). Because educational systems vary widely across countries, OECD adopted a broad classification system based upon the International Standard Classification for Education (ISCED) developed by the United Nations Educational, Scientific, and Cultural Organization (UNESCO). OECD summarizes the UNESCO categories into seven educational attainment groupings—ISCED 0 to ISCED 6—that refer to completed education. The OECD grouping "below upper secondary," which includes ISCED 0 through 2, corresponds to "without high school degrees." The grouping "tertiary-type A and advanced research programs, " a subset of ISCED 5, corresponds to "with college or university degrees." The data on unemployment have not been standardized but they are all from labor force surveys. The data refer to men and women ages 25 to 64.

Source: OECD, Education at a Glance: OECD Indicators, 2005 Ed., Paris, September 2005, table A8.2a; OECD, Employment Outlook, 2005 Ed., Paris, July 2005, table D; and OECD, Employment Outlook, 2004 Ed., Paris, July 2004, table D.

Annual hours worked per employed person
(chart 2.8)

The concept used is the total number of hours worked over the year divided by the average number of persons in employment. Annual hours worked per employed person are affected by legislation and agreements on normal and overtime hours. They also are influenced by factors such as the proportion of part-time workers and self-employed, who work fewer and longer hours, respectively. The ILO standard definition for hours actually worked includes hours actually worked during normal periods of work; time worked in addition to the normal periods and generally paid at higher rates; time spent at place of work in preparation, repair, and record keeping; time spent at place of work on stand-by basis or under a guaranteed work contract; and time corresponding to short rest periods, including tea or coffee breaks. Hours actually worked should exclude hours paid for but not worked, such as: annual leave, public holidays, paid sick leave, meal breaks, and time spent on travel between home and work. Comparative data on annual hours worked based precisely on this ILO definition are not available.

The comparisons shown in chart 2.8 are the published OECD data series on annual hours actually worked per employed person, which include some adjustments towards the above definition. The data generally cover all persons in employment, including both full-time and part-time workers. OECD states that the data are intended primarily for comparisons of trends over time. Comparisons of average annual hours levels for a given year are not precise because of differences in data sources and methods of estimation. Data sources include labor force surveys, establishment surveys, and administrative data. Hours data reported from establishment surveys or administrative sources exclude unpaid overtime. Hours data reported from labor force surveys are subject to respondent error. Methods of estimation include direct estimates using one survey source, and component estimates using more than one survey source or a combination of survey-based data and administrative or legislative information. Some data are consistent with national accounts concepts.

The source of hours and employment data varies by country. Annual estimates are based on actual or usual weekly hours worked from labor force and establishment surveys, or from normal hours worked from survey or administrative data. Only two countries charted, New Zealand and the United Kingdom, directly measure hours actually worked with a continuous labor force survey, which accounts for every week of the year and avoids the need to adjust for holidays and other days lost. OECD adjusts national data for Denmark, Ireland, Italy, Mexico, the Netherlands, and Portugal to account for effective weeks worked during the year; these adjustments address hours not worked due to annual leave and public holidays and the underreporting of hours lost due to illness and maternity leave. The estimate for the Netherlands excludes all overtime hours. For Korea, data are from an establishment survey and cover employees only.

Data for the United States are OECD estimates. They are based on unpublished BLS statistics of annual hours worked per job estimated from the Current Employment Statistics Survey and the CPS. OECD adjusts these unpublished BLS statistics for multiple jobholding using data from the CPS to produce estimates of annual hours worked per employed person. Data for most of the countries charted are on a per employed person basis.

Source: OECD, Labor Market Statistics Database, http://www.oecd.org.

Educational attainment of the adult population
(chart 2.14)

As discussed for chart 2.13, OECD uses UNESCO categories for seven educational attainment groupings. In chart 2.14, these are grouped into three broad categories. The grouping “below upper secondary” includes early childhood education (ISCED 0), primary level of education (ISCED 1), and lower secondary level of education (ISCED 2). The grouping “upper secondary and post-secondary non-tertiary” includes upper secondary level of education (ISCED 3) and post-secondary non-tertiary level of education (ISCED 4). The grouping “tertiary” includes the first stage of tertiary education (ISCED 5) and advanced research qualification (ISCED 6). The data refer to persons ages 25 to 64.

Source: OECD, Education at a Glance: OECD Indicators, 2005 Ed., Paris, September 2005, table A1.1a.