6202.0 - Labour Force, Australia, Feb 2017 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 16/03/2017   
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INSIGHTS FROM THE ORIGINAL DATA


SAMPLE COMPOSITION

The Labour Force Survey sample can be thought of as comprising eight sub-samples (or rotation groups), with each sub-sample remaining in the survey for eight months, and one rotation group "rotating out" each month and being replaced by a new group "rotating in". This sample rotation is important in ensuring that seven-eighths of the sample are common from one month to the next, to ensure that changes in the estimates reflect real changes in the labour market, rather than the sample. In addition, the replacement sample is generally selected from the same geographic areas as the outgoing one, as part of a representative sampling approach.

When considering movements in the original estimates, it is possible to decompose the sample into three components:

  • the matched common sample (survey respondents who responded in both January and February);
  • the unmatched common sample (respondents in February but who did not respond in January, or vice versa); and
  • the incoming rotation group (who replaced respondents who rotated out in January).

The detailed decomposition of each of these movements is included in the data cube 'Insights From the Original Data'.

In considering the three components of the sample, it is important to remember that the matched common sample describes the change observed for the same respondents January and February, while the other two components reflect differences between the aggregate labour force status of different groups of people.

While the rotation groups are designed to be representative of the population, the outgoing and incoming rotation groups will almost always have somewhat different characteristics, as a result of the groups representing a sample of different households and people. The design of the survey, including the weighting and estimation processes, ensures that these differences are generally relatively minor and seeks to ensure that differences in characteristics of rotation groups do not affect the representativeness of the survey and its estimates. Monthly estimates are always designed to be representative of their respective months, regardless of the relative contribution of the three components of the sample.


INCOMING ROTATION GROUP

In original terms, the incoming rotation group in February 2017 had a higher employment to population ratio than the group it replaced (61.8 per cent in January 2017, up to 62.9 per cent in February 2017), and was higher than the ratio for the entire sample (61.0 per cent). Its full-time employment to population ratio was higher than the group it replaced (41.6 per cent in January 2017, up to 43.2 per cent in February 2017), and higher than the ratio for the entire sample (41.8 per cent).

Its unemployment rate was above that of the sample as a whole (6.7 per cent, compared to 6.4 per cent) and its participation rate was also above it (67.4 per cent, compared to 65.2 per cent).

The incoming rotation group also had a reduced share of the population (12.1 per cent, down from 12.5 per cent for the group it replaced). This population share for this group was below the average share for the other seven rotation groups, which is not uncommon.


OUTGOING ROTATION GROUP

In looking ahead to the March 2017 estimates, the outgoing rotation group in February 2017, which will be replaced by a new incoming rotation group in March 2017, had a lower employment to population ratio (60.7 per cent in February 2017) compared to the sample as a whole (61.0 per cent in February 2017). The full-time to population ratio (42.0 per cent) was higher than the ratio for the entire sample (41.8 per cent).

In original terms, the unemployment rate for the outgoing rotation group in February 2017 was 5.1 per cent, which was lower than the 6.4 per cent for the whole sample. The participation rate for the outgoing rotation group in February 2017 was 64.0 per cent, also lower than the rate for the whole sample (65.2 per cent).


THE IMPORTANCE OF TREND DATA

As the gross flows and rotation group data are presented in original terms they are not directly comparable to the seasonally adjusted and trend data discussed elsewhere in the commentary, and are included to provide additional information for the original data. Since the original data are unadjusted, they have a considerable level of inherent sampling variability, which is specifically adjusted for in the trend series. The trend data provide the best measure of the underlying behaviour of the labour market and are the focus of the commentary in this publication.