Adoption of a New Official Definition of Unemployment

NSCB Resolution No. 15
Series of 2004

ADOPTION OF A NEW OFFICIAL DEFINITION OF UNEMPLOYMENT

WHEREAS, unemployment statistics is vital in the formulation and monitoring of government employment policies and programs;

WHEREAS, the Office of the President, in its 14 October 2003 memorandum, instructed the National Statistical Coordination Board (NSCB), thru its Chairman, the Director-General of the National Economic and Development Authority (NEDA), in coordination with the National Statistics Office (NSO), to review the existing concept of unemployment vis-à-vis the definition prescribed by the International Labor Organization (ILO);

WHEREAS, in response to this memorandum and as part of the continuing efforts of the Philippine Statistical System to improve concepts and definitions used in various statistical activities, the NSCB, NSO, and the Bureau of Labor and Employment Statistics (BLES), in consultation with the Interagency Committee on Labor, Income and Productivity Statistics (IAC-LIPS), conducted a series of meetings to review and discuss the issues on the existing definition of unemployment, including the questionnaire for the Labor Force Survey (LFS), the main statistical activity used to measure unemployment;

WHEREAS , the international standard definition of unemployment, as laid down in Resolution No. 1 adopted by the 13 th International Conference of Labor Statisticians (ICLS) in October 1982 and expounded in the 1990 ILO publication, Surveys of Economically Active Population, Employment, Unemployment, and Underemployment: An ILO Manual on Concepts and Methods, is based on three criteria that have to be satisfied simultaneously, i.e., (1) without work, which means that a person did not work at all during the reference period (not even for one hour) nor was he or she temporarily absent from work as determined by the definition of employment, (2) currently available for work, and (3) seeking work;

WHEREAS , the ICLS Resolution and the ILO Manual also include a provision that allows for the partial or complete relaxation of the seeking work criterion in certain situations;

WHEREAS , Resolution No. 9, Series of 1985, issued by the then Statistical Advisory Board under NEDA defined the totally unemployed as those who did not work and were reported wanting and looking for work during the reference week;

WHEREAS, in the current LFS as indicated in the July 2003 NSO publication Integrated Survey of Households, unemployed persons are defined as all those who, during the reference period are 15 years old and over as of their last birthday who have no job/business and actively looking for work, as well as those persons without a job or business who are reported not looking for work because of their belief that no work was available or because of temporary illness/disability, bad weather, pending job application or waiting for job interview;

WHEREAS, through the series of meetings conducted by the review group, it was found that the existing definition of unemployment is generally consistent with the international standards, except for the exclusion of the availability criterion;

WHEREAS, the detailed findings and recommendations of the group were presented to the NSCB Executive Board in its 12 December 2003 meeting, after which the latter approved the proposed action plan for the revision of the unemployment definition that included the following activities: (1) revision and pretesting of the LFS questionnaire with additional items to test the use of the availability criterion and the refinement of the definition of discouraged workers, (2) processing and analysis of the pretest results; and (3) consultation with labor experts;

WHEREAS, in compliance with the instructions issued by the NSCB Executive Board, the NSO, in consultation with the IAC-LIPS and an ILO labor statistics expert, came up with a revised LFS questionnaire incorporating items of inquiry that were deemed necessary to adequately capture the availability criterion and reflect the proposed reference period for identifying the discouraged workers;

WHEREAS, a pretest of the revised questionnaire was carried out by NSO, with funding assistance from the ILO, in May 2004 in four barangays (three urban and one rural) in the province of Laguna, covering 932 sample households with a total of 4,741 household members;

WHEREAS, although the results of the pretest have yet to be finalized, the NSO and the NSCB have jointly come up with a proposed flowchart (Annex BR-15-2004-01) for identifying the unemployed based on the revised LFS questionnaire;

WHEREAS a special meeting of the IAC-LIPS was held on 18 October 2004, during which the proposed flowchart was presented and the adoption of the new unemployment concept was recommended;

WHEREAS , a similar review of the unemployment definition undertaken in 1992 by the Technical Working Group (TWG) on Labor Force Concepts under the then Interagency Committee on Labor and Employment Statistics came up with basically the same findings and recommendations (except for some differences in the proposed reference periods for the availability criterion and for identifying the discouraged workers), but Board action was deferred to enable the TWG to undertake further study in anticipation of the possible effects of the 15 th ICLS scheduled to be held in Geneva the following year;

NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that the Board approve the recommendation of the IAC-LIPS and the NSCB Technical Staff for adoption by concerned government agencies and instrumentalities, the revised concept of unemployment, which prescribes the adoption of the availability criterion in addition to the two criteria included in the old definition, with all three to be satisfied simultaneously, with an extended availability period, and with partial relaxation of the seeking work criterion to be retained for persons without work and currently available for work, but not seeking work due to five particular reasons, and with qualification on the length of the job search period of the discouraged workers. Specifically, the new official definition of the unemployed is as follows:

The unemployed include all persons who are 15 years old and over as of their last birthday and are reported as:

  1. without work , i.e., had no job or business during the basic survey reference period; AND

  2. currently available for work , i.e., were available and willing to take up work in paid employment or self employment during the basic survey reference period, and/or would be available and willing to take up work in paid employment or self employment within two weeks after the interview date; AND

  3. seeking work, i.e., had taken specific steps to look for a job or establish a business during the basic survey reference period; OR not seeking workdue to the following reasons: (a) tired/believe no work available, i.e., the discouraged workers who looked for work within the last six months prior to the interview date; (b) awaiting results of previous job application; (c) temporary illness/disability; (d) bad weather; and (e) waiting for rehire/job recall.

The basic survey reference period for the LFS is the past week or the week before the interview date.

BE IT RESOLVED FURTHER, that the NSO undertake the following activities: (1) pretest of the second draft of the LFS questionnaire per recommendation of the IAC-LIPS; (2) finalization of the LFS questionnaire based on the results of the pretest; (3) adoption and full implementation of the revised unemployment concept starting with the April 2005 round of the LFS as specified in the action plan for the implementation of the new official definition of unemployment in Annex BR-15-2004-02; and (4) generation of parallel series on unemployment based on the old and the new definitions for a period of one year and continuation of the new unemployment series thereafter. The Statistical Research and Training Center (SRTC) is hereby directed to conduct information dissemination activities on the new official definition of unemployment in coordination with the NSCB and NSO, with funding assistance to be sought from the Department of Labor and Employment and the Bangko Sentral ng Pilipinas.

Approved this 20th day of October 2004, in Pasig City.

 

Attested by:

 

ROMULO A. VIROLA
Secretary General