The proportion of the working-age population who are economically inactive, mainly due to long-term sickness, is thought to be higher than recent estimates have suggested, the Office for National Statistics (ONS) has revealed.
A revised weighting methodology to account for changes in the way labour market survey data is collected has meant that the ONS has revised up its economic inactivity estimate for September to November 2023 to 21.9%, compared with 21.2% under the previous methodology.
The employment rate for the same period has been reweighted to 75.0% (down from 75.7%), while the unemployment rate has remained as previously reported at 3.9% – although the revised data for the previous six months suggests that this figure fell from 4.3% in May-June 2023.
It says: “Our newly published reweighted estimates suggest that over the last five months, unemployment may have fallen more quickly than our experimental indicator has suggested, offset by an increase in the rate of economic inactivity. The trend in the employment rate appears to have evolved broadly in line across the two measures.”
The ONS has had to change how it calculates its labour market estimates because data from the 2021 Census and migration estimates have shown the population has grown by more than expected.
ONS economic inactivity
The way the ONS collects Labour Force Survey (LFS) data, which it uses to calculate the estimates, has also changed. When the Covid-19 pandemic hit it could no longer conduct face-to-face interviews, which led to changes in the composition of responses it received and has affected how the LFS has been weighted in recent years. Face-to-face interviews are set to resume.
The number of responses to the LFS has also fallen, which the ONS said had led to increased volatility in its estimates for employment, unemployment and economic inactivity.
Reweighting has also meant that the average hours worked has been revised down because of increases in the number of young people and women in the LFS population, both of whom typically have lower average working hours.
From 13 February 2024, the ONS will be using reweighted Labour Force Survey estimates, replacing the “experimental” estimates it has been publishing since October.
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