REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND COUNCIL "Implementation of the Council Regulation (EC) No. 577/98 on the organisation of a labour force survey in the Community"

Summary

Council Regulation (EC) No. 577/98 concerning the organisation of a Labour Force Survey contained a number of important changes in relation to the previous Regulation [1], including the following:

[1] Council Regulation (EEC) No. 3711/91, OJ L 351 du 20.12.1991

(a) Transition (except for the Member States who are not in a position to do so) from a yearly survey in Spring to a continuous survey providing quarterly results (main objectives: to improve frequency and timeliness of data, to measure the volume of work to better estimate the monthly unemployment, to better assess the trends in employment).

(b) Speeding up data availability (objectives: quarterly data available within 12 weeks).

(c) Introduction of new or revised variables (main objectives: better identify ILO unemployment, to measure time-related underemployment, to provide more comparable information on level of education and training attained, to cross existing variables with income from employment).

(d) Implementation of complementary surveys (so-called ad hoc modules) (objective: to meet occasional statistical needs without making the main part of the survey more burdensome).

(a) Transition to a continuous survey

At present, a continuous survey is carried out in 10 of the EU Member States (NL, B, UK, IRL, DK, EL, E, P, FIN, S). In France, the transition towards a continuous survey is in progress (extending over the period mid 1998- mid 2001). It is being considered in Italy (the transition is foreseen for 2001-2002 but the tests had started in June 1999) and in Luxembourg. In Germany and in Austria, despite the recommendations of the Council [2], the transition to a continuous survey is not yet scheduled; in Germany some pilot surveys will be carried on in 2000 but any decision concerning the transition to a continuous survey would be delayed until 2005.

[2] See the conclusions of the European Council at Vienna (December 1998) concerning the Commission report on ways of improving the comparability of statistics used to monitor the EU employment strategy (COM (1998) 698final). See also the Action Plan on EMU statistical requirements adopted by the ECOFIN on 29.9.2000).

As noted at the time the regulation was adopted, the lack of an obligation on the part of Member States to move to a continuous survey is being exploited by those for whom this presents both a technical and political problem.As long as a Member State, which accounts for a sizeable proportion of EU employment, does not move to a continuous survey, the efforts made by the other Member States are unacceptably devalued in a European perspective. Given that sufficient time has now elapsed since the negotiation of the regulation to allow all Member States to make the necessary arrangements and commitments, an amendment to the regulation could introduce a final time limit for Member States to move to a continuous survey.

(b) Timeliness

The results of the spring survey are usually sent to Eurostat within the statutory limit of 9 months from the end of the reference period, but it has never been possible to publish the EU results within this timetable, owing to delays in one Member State or another (Irish 1998 results in October 1999; Greek 1999 results in June 2000. In 2000, quarterly results have been sent to Eurostat, within the statutory limit of 12 weeks after the end of the reference period, only by Italy, Spain, Portugal and Sweden.

Speedy transmission of results is critical to the usefulness of the LFS as a source of data for employment performance indicators, in particular in view of their use in the Employment in Europe Report and as common indicators in the annual Joint Employment Report, as part of the examination of Member States' National Action Plans on implementing the Employment Guidelines.The new context of an annual report on performance (post-Lisbon) reinforces the need for Member States to respect the deadlines for transmission of results, which are already rather generous. The Commission will propose that the LFS results are made available to Eurostat not later than when the national results are disseminated by the National Statistical Offices.

(c) List of variables

The list of variables (fixed by the Commission Regulation n° 1571/98) is generally observed, but

- the variables on education and occupational training have been affected by difficulties in implementing the International Standard Classification of Education;

- three Member States (Denmark, Finland and Sweden) have not provided any information on the composition of the households;

- information for measuring visible underemployment (in particular willingness of those interviewed to increase the duration of their working time) was provided by only 3 Member States (Spain, Austria and Portugal);

- information on income from employment was provided by only three Member States (Belgium, France and Portugal).

The variables mentioned here above are of particular interest in view of their relevance for the Social Agenda, for the employability pillar and for the adaptability pillar of the employment guidelines, as well as for the success of the Lisbon strategy. It is therefore worrying that they were not provided according to the Regulation in force.

(d) Complementary surveys (ad hoc modules)

The following programme of ad hoc modules has been agreed:

1999 Accidents at work and occupational diseases

2000 Transition from school to work

2001 Length and patterns of working time

2002 Employment of disabled persons

2003 Lifelong learning

2004 Transition from school to work

The 1999 ah hoc module was not implemented by Belgium, France and Austria and only partially implemented by Germany. The 2000 ad-hoc module was not implemented by Germany and only partially by the Netherlands and the United Kingdom.. The 2001 ad-hoc module has been defined and wil be implemented by all Member States except Germany that will only do it partially

The Commission's services consider unsatisfactory that 4 Member States did not take part in the 1999 survey or will only provide partial answers to it, and that the same situation will occur for 3 Member States as regards the 2000 survey.

In conclusion, the Commission:

- emphasises the need to accelerate the transition towards a continuous survey in Germany and Austria;

- invites France, Italy and Luxembourg to stick to the envisaged schedule for implementing a continuous survey;

- urges in particular France and Germany to speed up the transmission of the Spring Survey data;

- reminds Member States carrying out continuous surveys that the quarterly results must be provided to Eurostat within 12 weeks of the end of the reference quarter;

- insists on the need to improve the information on education and training and to complete information on households;

- will continue with the implementation of complementary surveys, in order to respond flexibly to high-priority political requirements.

Detailed Report

1. Article 1 - Frequency of the survey

1.1 " The survey is a continuous survey providing quarterly and annual results"

The following table shows the situation in terms of the continuity of the survey. Some of the Member States have already continuous surveys and other have the intention of introducing it before the year 2002. The table presents not only the actual situation but also the foreseen date for those countries that still do not have a continuous survey. Germany is studying the possibility of introducing a continuous survey but no date is yet fixed for the transition. Austria is working on concepts for starting a continuous LFS. Nevertheless all options are difficult to be implemented before 2002 or 2003 (White cells = continuous survey):

Table 1

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(1) In Spain, until 1999 no interviews were conducted in August. For this reason the survey was not considered continuous even though the reference weeks were evenly distributed across the other 11 months.

(2) the continuous LFS had been introduced in France in mid-1998 and will be fully implemented in mid-2001

In terms of survey providing quarterly results the situation is as follows (White cells = quarterly survey):

Table 2

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(1) Austria will submit partial quarterly individual data on employment and unemployment, according to EU-definitions from Microcensus surveys (each June, September and December), with information on demographic and occupational variables, in addition to the complete LFS data in March of each year.

Works conducted by the countries and funded by the European Commission:

EL - Greece had a yearly survey until 1997. In 1998, they started a quarterly continuous survey. The design of the survey was revised covering aspects like the sample size (taking into account the reliability criteria imposed by the new regulation), the changes in the rotation pattern, the stratification and the selection and estimation procedures.

E - In 1999 a new sample was selected and the field work was adapted in order to equally distribute the interviews all across the year including in August (until then no interviews were conducted on August du to interviewers' holidays)

F - In 1998, a continuous pilot survey was started and will be conducted in parallel with the yearly survey in order to insure the statistical transition. The questionnaire of this pilot survey is shorter than the normal LFS questionnaire.

L - One of the weaknesses of LFS in Luxembourg is the high rate of non-response. Besides, these non-responses are certainly biased. The passage to a continuous survey imposes a better data collection method. In 1999 a pilot survey was conducted to test a CATI data collection.

NL - In the Dutch survey every household is interviewed only once. This design gives time-series that aren't stable enough to provide quarterly results. A feasibility study was conducted in order to test if a panel design was suitable to provide quarterly reliable data without increasing the sample size.

P - In 1998 a new design was implemented in order to equally distribute the interviews all across the year.

FIN - Finland had a monthly survey with a single week of reference in each month. In 1997 and 1998, 2 methodological studies were conducted in order to analyse alternative rotation patterns and sampling strategies to implement a continuous survey

1.2 "In the case of a continuous survey the interview normally takes place during the week immediately following the reference week. The reference week and the date of the interview may not be more than 5 weeks apart, except in the third quarter "

The following table shows, for the countries having a continuous survey, the percentage of interviews that took place 5 or less weeks after the week of reference. The results are presented for the 2nd quarter of 1998 and 1999 (when this information is available). For some countries it is impossible to provide the information because the week of survey was not coded.

Table 3 - % of interviews that took place 5 or less weeks after the week of reference

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1.3 "In the case of a continuous survey the reference quarters and years are respectively groups of 13 or 52 consecutive weeks."

A list of the weeks making up a given quarter is drawn up by the Commission regulation N° 1571/98 of 20 July 1998 as follows:

- First quarter of reference of 1998 starts on 29 December 1997 and consists in 13 weeks

- The next quarters of reference of 1998 will be formed by blocks of 13 weeks and the last week of 1998 will not be covered

- The first quarter of 1999 will start on IV/99 January 1999 and the next quarters will consist of consecutive blocks of 13 weeks.

All the countries with the following exceptions accepted this:

- The first quarter of reference starts on 5.1.1998 for Greece and Portugal and by consequence the last week of 1998 will be covered.

- The fourth quarter of reference of 1998 will be formed by a block of 14 weeks for Sweden.

- Seasonal quarters of reference may be used in 1998 and 1999 for United Kingdom and Ireland (instead of the quarters of reference as defined above).

In practice, the distribution of the interviews in 1998 and 1999 was as follows:

Distribution of the interviews by reference week (% of the total of the interviews done in each country in 1998)

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Distribution of the interviews by reference week (% of the interviews done in each country in 1999)

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Works conducted by the countries and funded by the European commission:

UK - In 1999 and 2000, United Kingdom develops a new processing system to produce LFS data for calendar quarters. The first step is to develop a system for producing data for every seasonal quarter, as opposed to only the spring quarter each year. The UK will begin providing seasonal quarter data every quarter from spring 1999. They are looking at beginning to provide calendar quarter data some time in 2000/2001.

2. Article 2 - Units and scope of the survey, observation methods

2.1 "The survey shall be carried out in each Member State in a sample of households or of persons residing in the economic territory of that State at the time of the survey"

The sampling unit is the household in 7 countries (B, D, EL, IRL, I, NL, L), the dwelling or the address in 5 countries (E, F, A, P, UK) and the individual in 3 countries (DK, FIN, S).

2.2 "The principal scope of the survey consists of persons residing in private households on the economic territory of each Member State. If possible, this main population of persons living in private households, is supplemented by persons living in collective households.

Wherever possible, collective households are covered by means of samples specially drawn to permit direct observation of the persons concerned. If this is not possible, then persons in these groups who continue to have an association with a private household are included in connection with that household."

Collective households are covered by the Labour Force Survey in 5 Member States (DK, D, S, FIN and UK). In Belgium, collective households were covered in 1998 but they were notcovered anymore since 1999. In Denmark, Sweden and Finland, as the sample unit is the individual and the survey base is the population register, persons living in collective households are surveyed as well as persons living in private households. In Germany, Spain and UK information on persons living in collective households is obtained via their members of the family living in private households.

2.3 "The variables used to determine labour status and underemployment must be obtained by interviewing the person concerned, or, if this is not possible, another member of the household. Other information may be obtained from alternative sources, including administrative records, provided that the data obtained are of equivalent quality."

In most of the countries all the information is collected by interview with percentages of proxy interviews that vary from less than 15 % (in the case of surveys with the individual as sample unit) to more than 50%. Denmark, Sweden and Finland use Population registers for providing demographic information and highest educational level attained. In the Netherlands, the information concerning actual working hours is partly incorporated from establishment and enterprise surveys. In France and in Sweden, the business register is used as source of information on NACE classification of the employer.

2.4 Regardless of whether the sampling unit is an individual or a household, information is usually collected for all individuals of the household. However, if the sampling unit is an individual, the information concerning the other members of the household

- may exclude the characteristics listed under g, h, i et j of paragraph 1 of Article 4,

- and may be collected from a sub-sample defined in such a way that

- the reference weeks are uniformly distributed throughout the whole year;

-the number of observations (individuals sampled plus the members of their household) satisfies, for the annual estimates of levels, the reliability criteria defined in Article 3.

No data on the composition of the household is provided by Denmark, Finland and Sweden, where the sampling unit is an individual. Therefore Eurostat cannot publish household data for those 3 countries.

Works conducted by the countries funded by the European commission:

FIN - In 1997 a study was conducted to analyse the integration of the household sample design and the individual sample design.

3. Article 3 - Representativeness of the sample

3.1 For a group of unemployed people representing 5% of the working age population the relative standard error for the estimation of annual averages (or to the spring estimates in the case of an annual survey in the spring) at NUTS II level does not exceed 8%.

Regions with less than 300,000 inhabitants shall be exempt from this requirement.

3.2 In the case of a continuous survey, the sample design should guarantee that for sub-populations which constitute about 5% of the population of working age, the standard error at national level for the estimate of changes between two successive quarters, does not exceed 2% of the sub-population concerned.

For Member States with a population of between one million and twenty million inhabitants, this requirement is relaxed so that the standard error for the estimate of quarterly changes does not exceed 3% of the sub-population concerned.

Member States whose population is below one million inhabitants are exempt from these precision requirements concerning changes.

The two following tables give some information on the precision of results at regional level and for quarterly changes in 1998 and 1999. Figures in bold show where the limits foreseen by the regulation were exceeded.

Table 4 - Relative standard errors for population of unemployed representing 5% of working age population.

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Table 5 - Standard error at national level for the estimate of changes between two successive quarters for populations representing 5% of working age - 1998 and 1999

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Works conducted by the countries and funded by the European commission:

P - In 1998, the sample was redesigned in order to meet the criteria of regional reliability and quarterly changes reliability

UK - In 1998 and 1999, UK launched a research project to produce a definitive method of estimating sampling errors of quarterly change of seasonally adjusted key LFS estimates.

3.3 Where the survey is carried out only in the spring, at least a quarter of the survey units are taken from the preceding survey and at least a quarter form part of the following survey.

These two groups shall be identified by a code.

In 1998, (B, D, F, L, NL) have annual surveys. The following table shows the part of the survey taken from the 1997 sample survey and the part that will be re-interviewed in 1999.

Table 6 -% of the 1998 sample interviewed in 1997 and % of the 1998 sample re-interviewed in 1999.

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* In 1999, Belgium has started a quarterly continuous survey with a sample that is completely independent from the 1998 one.

** In the Dutch survey every household is interviewed only once

3.4 Where non-response to certain questions results in missing data, a method of statistical imputation shall be applied where appropriate.

Seven countries do item non-response imputation (D, EL, E, I, A, FIN, UK)

3.5 The weighting factors are calculated taking into account the probability of selection and external data relating to the distribution of the population being surveyed, by sex, age (five-year age groups) and region (NUTS 2 level), where such external data are held to be sufficiently reliable.

The weighting factors are calculated with very different levels of complexity according to the countries. The following table shows the variables used for the calculation of the weighting factors.

Table 7 -Variables used to calculate weighting factors (1998 and 1999 LFS)

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The same weighting factor for all the members of the household, calculated with an iterative process, is applied in France, Italy, the Netherlands and Austria.

Works conducted by the countries funded by the European commission:

DK - Changes in the estimation procedures to take into account probability of selection and external population data relating to the distribution of the surveyed population by sex and 5-year age groups.

NL - The passage to a panel survey implies a big revision of the weighting procedure. This is particularly a problem in the Netherlands where the non-response rate is very high. A new method is on study to correct the selective non-response in the second and subsequent waves.

S - In 1997, Sweden conducted a research on the effects on the precision of LFS estimates when using a single weight for all the individuals of the household

3.6 Member States shall provide the Statistical Office of the European Communities (hereinafter called "Eurostat") with whatever information is required concerning the organisation and methodology of the survey, and in particular, they shall indicate the criteria adopted for the design and size of the sample.

This has been done concerning the 1998 and 1999 survey. A summary of this information has been published in "Labour force survey - methods and definitions, 1998 edition" for the 1998 information and in"Labour force survey - 1999 results" for the 1999 information.

4. Article 4 - Survey characteristics

The new regulation introduced new or revised variables. The following tables indicate whether countries provided the information or not. Grey cells show that data was not provided. "I" means that the information was not complete.

4.1.1 Composition of the household

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(1) Provided since 1999.

(2) Since 1999 the information on the composition of the household is no longer available.

4.1.2 To have a better measurement of visible underemployment (optional in the case of an annual survey):

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(1) Provided since 1999

4.1.3 Education (revised variables)

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(1) Provided since 1999.

(2) Available according to old ISCED

4.1.4.Main labour status and income (optional)

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(1) Provided since 1999

4.1.5 - Technical items relating to the interview

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(1) This information was imputed in 1998 and included in the questionnaire since 1999.

(2) This information was provided in 1999.

Some other variables were modified in order to complete the existing information.

The following tables summarise the implementation of these changes.

4.1.6 - "Overtime" in the variable "main reason for hours actually worked being different from the person usual hours".

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4.1.7 - In the variable "Looking for another job and reasons for doing so" a certain number of positions were added in order to have a better information of the population underemployed.

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(1) included in the questionnaire since 1999 (3 possible answers)

4.1.8 - Instead of information on the main method to find a job, data has now to be collected on all methods used to find a job.

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(1) until 1998, maximum 3 methods to find a job were coded. Since 1999, all methods are coded.

4.1.9 The serial number of household should remain the same for all waves

The countries using the same number of households in the different waves are: B, EL, E, IRL, A, P. No household is available for: DK, S, FIN. The remaining countries didn't provide the information.

Works conducted by the countries and funded by the European commission:

DK - In 1998, a study was conducted on the revision of the Danish questionnaire. Changes in the sequence of questions on main status, ILO labour status and questions on job-search, the effect of asking questions on job-search to all persons without a job and the effect of including cues for unpaid workers, minor jobs and for those who already had a job where the main focus of the study.

E - In 1997, a pilot survey was conducted to test the necessary questions to provide the information for the new variables (underemployment, different job search methods, etc.). The use of portable computers for the data collection was tested and introduced in the data collection procedure.

I - In 1998-99 a new questionnaire was tested. The main purposes of this pilot survey was to test:

a) The impact of the sequence of questions concerning main labour status and ILO labour status

b) To test the questions concerning the education and training module

P - In 1998, the questionnaire was revised in order to provide information on all variables of EU LFS.

FIN - In 1998 and 1999, a LFS questionnaire providing information on the new variables will be tested. This involves laboratory testing and field experimentation.

S - In 1997 a laboratory test and a pilot study was conducted to get better estimates of overtime and absence from work and to evaluate the effect on the estimates of the order between the questions on usual and actual hours worked.

UK - A pilot survey was conducted in 1999 to test the new questions necessary to provide information on the new education and training module. Existent LFS data on underemployment was tested in order to decide whether it was sufficiently good quality to merit publication.

4.2 A further set of variables, hereinafter referred to as an "ad hoc module", may be added to supplement the information described above in paragraph 1.

"A programme of ad hoc modules covering several years shall be drawn up each year"

The following program of ad hoc modules was adopted under Commission Regulations n°1571/98,:n° 1924/99 and n° 1626/2000

1999 - Accidents at work and occupational diseases

2000 - Transition from school to working life

2001 - Length and patterns of working time

2002 - Disabled people's employment

2003 - Lifelong learning

2004 - Transitions from school to working life

The detailed definitions of 1999-2000 and 2001 ad hoc modules were adopted under Commission Regulations n° 1571/98, n° 1925/99 and n° 1578/2000

With the exception of Belgium, France, Austria, all the member states have conducted the 1999 ad-hoc module. Germany will provide only part of the information.

In 2000 only Germany will not conduct the module on transition from school to working life. The Netherlands and the United Kingdom will not provide the information on some of the variables.

Works conducted by the countries and funded by the European commission:

The implementation of the 1999's ad-hoc module was co-financed by the European commission in Denmark, Spain, Italy, Portugal, Finland and Sweden. In what concerns the 2000's module the countries that will benefit of funding will be Belgium, Denmark, Greece, Spain, France, Ireland, Italy, the Netherlands, Portugal, Sweden, Finland and United Kingdom.

4.3 "The definitions, the edits to be used, the codification od-f the variables, the adjustment of the list of survey variables made necessary by the evolution of techniques and concepts, and a list of principles for the formulation of the questions concerning the labour status, are drawn up according to the procedure laid down in Article 8."

The operational definition of unemployment and the principles for the formulation of the questions concerning the labour status were adopted under Commission Regulation n° 1897/2000.

The codification of the variables was drawn up by the Commission Regulations n° 1571/98 and n° 1575/2000

5. Article 5 - Conduct of the survey

5.1 The Member States may make it compulsory to reply to the survey.

They shall endeavour to ensure that the information requested is provided truthfully within the periods specified.

The survey is compulsory in 5 countries (B, E, F, I, P). In Germany and Austria the labour force survey is largely part of the Mikrocensus which is compulsory; the answer is voluntary some questions which are not part of the Mikrocensus.

6. Article 6 - Transmission of the results

6.1 "Within twelve weeks of the end of the reference quarter in the case of a continuous survey (and within nine months of the end of the reference period in the case of a survey in the spring), the Member States shall forward to Eurostat the results of the survey, duly checked, for each person questioned, without indication of name or address."

The following table shows the expected date and the first and last date of reception of 1998 and 1999 data.1998 should be considered exceptional taking into account the substantial number of changes introduced in by the countries (new list of variables, new program of coding, passage to a continuous survey, etc.).

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7. Article 7 - Reports

A report on the implementation of this regulation shall be submitted by the Commission to the Parliament and the Council every 3 years, beginning in the year 2000. This report shall evaluate in particular the quality of the statistical methods envisaged by the Member States to improve the results or to lighten the survey procedures.

Belgium is trying to have access to the Social Security files in order to improve the computation of weights.

Greece envisages using CAPI and CATI since 2000 to improve and lighten the Greek survey.

From the first quarter of 2000 onwards, the highest level of education successfully completed will be coded using the CNED2000 (2 digits) which is the Spanish version of ISCED.

The field of study(achieved and ongoing) will also be collected from the first quarter of 2000 onwards using the field of studies classification (2 digits).

In order to improve the representativeness of the primary units of the survey (census sections), in the first quarter of 2000, 143 census sections are going to be replaced.

The external source used for the update has been the electoral census.

This update will be repeated, in theory, every two years. It is foreseen to analyze the impact of the replacement of the sections conducting the EPA (Labour force Survey) both in the 143 new sections and the 143 old sections and comparing the estimates obtained with both groups of sections.

When the "Padrón continuo" (Population Register updated monthly and centralised in the NSI) will be available, the possibility of introducing a re-weighting by sex, five-year age groups and NUTS III region will be studied. No fixed delay is foreseen for the availability of the "Padrón continuo".

IRL

The CSO is carrying out a comprehensive review of the Quarterly National Household Survey to consolidate the data collection and processing procedures which were put in place in Autumn 1997 and to ensure that the survey will continue to meet all user requirements (in respect of survey contents, timeliness, and output) at national and EU level.This review will identify the strengths and weaknesses of existing systems and identify developments which must be implemented so that the survey will continue to meet users' expectations.

The survey has been implemented using CAPI, which minimises the response burden particularly in repeat interviews.CAPI also allows a fairly flexible approach to complex questionnaires and to the inclusion of ad-hoc modules.

The survey has been implemented using CAPI and a quality survey is carried up quarterly.

Statistics Sweden would welcome a discussion of gathering some of the variables just for a sub sample of each quarterly sample but still in a continuos way. A possible method of how to identify and make priority between variables would be to define a set of estimates/tables necessary for short term (quarterly) monitoring of the labour marketandthe corresponding variables to be gathered from the full sample. The other complementary variables used for annual monitoring should then be gathered from a sub sample.