Category Archives: PLS4

20/2/19: Broader Measures of Irish Unemployment 4Q 2018


The latest Labour Force Survey for 4Q 2018 for Ireland, published by CSO, shows some decent employment increases over 2018, and a welcomed, but shallow, rise in the labour force participation rates. Alongside with a decrease (over FY 2018) in the headline unemployment rate, these are welcome changes, consistent with overall economic growth picture for the state.

One, much less-reported in the media, set of metrics for labour markets performance is the set of broader unemployment measures provided by the CSO. These are known as Potential Labour Supply stats (PLS1-PLS4). The measures also show improvements over 2018, just in line with overall employment growth. However, these measures clearly indicate that after 11 years running, the 2008-2014 crises remain still evident in the labour force statistics for Ireland.

Here is a chart of all four PLS measures, compared to their pre-2008 averages:

Note: Increase in PLS2-PLS4 series at 3Q 2017 is down to change in assessment methodology under the LFS replacing QNHS, with data pre-3Q 2017 adjusted to reflect that change by the CSO.

As a reminder, the above data series are defined as:

  • PLS1 adds discouraged workers. These are individuals who are out of work but who have become disillusioned with job search. 
  • PLS2 includes all individuals in Potential Additional Labour Force (PALF). The PALF is made up of two groups: persons seeking work but not immediately available and persons available to work but not seeking, of which discouraged workers make up the largest number. 
  • PLS3 includes all those in the previous two categories (PLS1 and PLS2) along with persons outside the labour force but not in education or training. 
  • PLS4 is the broadest measure of unemployment or potential labour supply and is calculated by adding part-time underemployed workers to PLS3. Part-time underemployed workers are individuals currently working part time who are willing and available to work additional hours. The broadest measure of unemployment (PLS4) stood at 13.7 per cent in 4Q 2016. At 4Q 2017 it was 18.7 per cent and by 4Q 2018 it was down to 17.5 per cent.

20/2/19: Broader Measures of Irish Unemployment 4Q 2018


The latest Labour Force Survey for 4Q 2018 for Ireland, published by CSO, shows some decent employment increases over 2018, and a welcomed, but shallow, rise in the labour force participation rates. Alongside with a decrease (over FY 2018) in the headline unemployment rate, these are welcome changes, consistent with overall economic growth picture for the state.

One, much less-reported in the media, set of metrics for labour markets performance is the set of broader unemployment measures provided by the CSO. These are known as Potential Labour Supply stats (PLS1-PLS4). The measures also show improvements over 2018, just in line with overall employment growth. However, these measures clearly indicate that after 11 years running, the 2008-2014 crises remain still evident in the labour force statistics for Ireland.

Here is a chart of all four PLS measures, compared to their pre-2008 averages:

Note: Increase in PLS2-PLS4 series at 3Q 2017 is down to change in assessment methodology under the LFS replacing QNHS, with data pre-3Q 2017 adjusted to reflect that change by the CSO.

As a reminder, the above data series are defined as:

  • PLS1 adds discouraged workers. These are individuals who are out of work but who have become disillusioned with job search. 
  • PLS2 includes all individuals in Potential Additional Labour Force (PALF). The PALF is made up of two groups: persons seeking work but not immediately available and persons available to work but not seeking, of which discouraged workers make up the largest number. 
  • PLS3 includes all those in the previous two categories (PLS1 and PLS2) along with persons outside the labour force but not in education or training. 
  • PLS4 is the broadest measure of unemployment or potential labour supply and is calculated by adding part-time underemployed workers to PLS3. Part-time underemployed workers are individuals currently working part time who are willing and available to work additional hours. The broadest measure of unemployment (PLS4) stood at 13.7 per cent in 4Q 2016. At 4Q 2017 it was 18.7 per cent and by 4Q 2018 it was down to 17.5 per cent.

25/2/15: QNHS Q4 2014: Broader Measures of Irish Unemployment


In the previous post (http://trueeconomics.blogspot.ie/2015/02/25215-qnhs-q4-2014-labour-force.html) I covered the QNHS results for Q4 2014 from the point of Labour Force Participation Rate (poor news showing decline in the already historically low participation) and Unemployment Rate (goods news with unemployment - absent seasonal adjustment falling to 9.9% and the rate of decline in unemployment on quarterly basis accelerating).

Here, let's consider actual size of the labour force and the broader measures of unemployment, including numbers on state training programmes (e.g. JobBridge) and factoring in estimates of inward and outward migration.

Few definitions are provided in the note below the post, so feel free to consult these.

Now, onto numbers.

Total size of Irish labour force at Q4 2014 stood at 2,152,500 down from 2,172,400 in Q3 2014 and down 10,600 on Q4 2013. This is not good. Compared to peak, current Labour Force is down 147,600 and compared to crisis period trough it is up 15,000. Over the last 12 months, irish labour force average levels were down 117,100 on pre-crisis average. All indicators point to a decline in labour force, consistent with the weak labour force participation rate reported in the previous post. All of this suggests that some share of improvements in unemployment performance is down to people dropping out of the labour force rather than the unemployed finding jobs.



As chart above highlights, remarkably, there has been basically no change in labour force numbers from H2 2010 through Q4 2014, something that is not consistent with our natural demographics, but is consistent with the story of outward emigration and dropping-out from the labour force by working age adults.

Now onto more pleasant news. All broader measures of unemployment have registered declines in Q4 2014 both y/y and q/q:

PLS1 indicator - basically a measure of unemployment fell 2.0 percentage points y/y in Q4 2014 to 10.5%, marking an acceleration in the rate of decline from 1.9% drop in Q3 2014.

PLS3 indicator, capturing those employed, unemployed, discouraged, plus all those not seeking a job for reasons other than being in Education & Training - has fallen from 15.1% in Q3 2014 to 13.3% - a drop of 2.7 percentage points y/y accelerated from 2.4 percentage points decline back in Q3 2014.

PLS4 - the broadest officially reported measure of unemployment that includes PLS3, and also underemployed - has fallen to 18.5 in Q4 2014, marking the first reading below 20% since Q1 2009. The measure is down 3.8 percentage points y/y and this marks a major acceleration in decline compared to 2.9 percentage points drop in Q3 2014.

Adding State Training Programmes participants to PLS$ to produce PLS4+STP puts the broader unemployment measure to 22.34%. This is the lowest reading since Q4 2009 and also marks acceleration in decline exactly matching that for PLS4.

Accounting (and this is rough estimation, so be warned) for net outward emigration, however, PLS4+STP measure of broad unemployment rises to 29.8% in Q4 2014. This marks a decline of 2.8 percentage points y/y and acceleration of decline from 2.0 percentage points drop in Q3 2014. However, the rates of decline in both Q3 and Q4 were shallower than for other measures, save PLS 1.



To summarise, labour force levels are worrying and static at and around crisis trough. Broader measures of unemployment show significant improvements, but the levels of unemployment, especially adjusted for state training programmes and potential adverse effects of net emigration are still high and more worrying than the headline unemployment measures suggest. While we do not know exactly, indications are - the data is consistent with at least some declines in unemployment officially recorded by the CSO coming not from jobs gains, but from emigration, state training programmes and exits from the labour force.

For example, compered to H1 2011, there were 23,373 more individuals that were participating in state training programmes who are not counted as unemployed. Furthermore, estimated net 94,800 individuals of working are have left Ireland between end of Q1 2011 through end of Q1 2014. They too are no longer counted in the labour force or in employment/unemployment statistics.


Note:


  • PLS1 indicator is unemployed persons plus discouraged workers as a percentage of the Labour Force plus discouraged workers.
  • PLS2 indicator is unemployed persons plus Potential Additional Labour Force as a percentage of the Labour Force plus Potential Additional Labour Force
  • PLS3 indicator is PLS2 plus others who want a job, who are not available and not seeking for reasons other than being in education or training as a percentage of the Labour Force plus Potential Additional Labour Force plus others who want a job, who are not available and not seeking for reasons other than being in education or training.
  • PLS4 indicator is PLS3 plus part-time underemployed persons as a percentage of the Labour Force plus Potential Additional Labour Force plus others who want a job, who are not available and not seeking for reasons other than being in education or training.
  • PLS4+STP is the indicator combining PLS4 above and State Training Programmes Participants but excluding those of working age who emigrated (net of those who immigrated). 
  • PLS4+STP+migration numbers reported below are reflective of PLS4+STP measure and add estimates of net emigration from Ireland based on latest available data extrapolated linearly over the year from May 2014 and adjusted for working age and labour force participation rate in the economy.