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Scottish Economic Statistics 2004

B4 chapter four: The Labour Market

Population

The General Register Office for Scotland (GROS) is responsible for the publication of population estimates for Scotland. The latest census was carried out in 2001. The 2001 census estimates have shown that the number of males and females in Scotland have decreased in the last 10 years. They have also shown that the mean age of the population has increased. These changes are predicted to continue in future years. These projected demographic changes will have implications for the labour market in Scotland. Chart 4.1 illustrates these changes.

There is also geographic variation in the age distribution of population across Scotland. In Dumfries and Galloway for example, 23 per cent of the population are greater than working age, whereas in West Lothian only 14 per cent of the population are greater than working age. ( See table 4.1)

Employment

The official source for estimating numbers of people in employment is the Labour Force Survey (See Box 4.1 for further information about this survey). In 2004 there were 2.4 million people aged 16 and above in employment. This is an increase of 6.4 per cent since 1997. Proportion of working age people in employment varies geographically across Scotland. This is illustrated in Map 4.1.

Map 4.1: Employment Rates by Scottish Local Authority area, 2002

Gender and Age

Chart 4.2 shows that the employment rate for both males and females has increased. Since 1997 there has been a greater increase in the proportion of females in employment compared with males. The number of females in employment has increased by 9.0 per cent, whereas the number of males in employment has only increased by 4.1 per cent. Chart 4.3 shows that the proportion of people in employment has increased across all age bands. The smallest increase is evident in the 16-29 years age group and the greatest increase for the 50 years plus age group.

Chart 4.2: Employment, unemployment and economic inactivity rates by gender in Scotland, 1992-2004

Chart 4.3: Proportion of people aged 16-59/64 in employment by age group, 1994-2004

Work Patterns

Total number in employment comprises employees, self-employed, unpaid family workers and government supported trainees. Number in full-time employment has increased by a greater amount for females (8.7%) than for males (0.5%) since 1997. Numbers employed on a part-time basis have also increased considerably since 1997. This increase has been greater for men than for women. Number of part-time men has increased by 47 per cent whereas for women, the increase is 10 per cent. Overall in 2004 part-time workers account for 26 per cent of all people in employment.

Since 1997 numbers who are self-employed has increased by 2 per cent. Number self-employed has decreased for females (-1.5%), whereas number of self-employed males has increased by 3.5 per cent. Numbers of unpaid family workers and government supported trainees have decreased.

Chart 4.4: Proportion of people aged 16-59/64 in employment shown by SVQ level of qualifications 1997-2003

Qualifications and Job training

Proportion of people who have been receiving on the job training in the last 3 months has increased since 1997. Currently 28 per cent of people said they had received job related training in the last three months, compared with 24 per cent in 1997. The proportion of people in the workforce who have a degree has also been increasing in Scotland. In 2003 20 per cent of people in employment had a degree. This compares with 15 per cent in 1997. Chart 4.4 shows that the proportion of working age people in employment who possess Scottish Vocational Qualification (SVQ ¹⁸) level 5&6 qualification is increasing, whereas the proportion of people who possess up to SVQ level 1&2 qualifications is decreasing. This indicates that Scotland has a more qualified workforce than in previous years.

Jobs

Official sources of workforce jobs are the Annual Business Inquiry and the Quarterly Employee Jobs series. These are surveys of employers carried out by the Office for National Statistics. These surveys measure number of jobs compared with the Labour Force Survey which measures numbers of people.

Chart 4.5 Proportion of all employee jobs shown by industry 1997 and 2002

Industry

Chart 4.5 shows number of employee jobs by broad industry sector in 2002 and 1997. In 2002 and 1997 the highest proportion of employee jobs in Scotland were in Public Administration, Education & Health. Since 1997 the number of employee jobs have increased in Public Administration, Education & Health and Banking, Finance and Insurance etc. Number of jobs in manufacturing have decreased by the largest amount.

Information on job gains and losses

There are currently no official statistics to measure job gains and losses directly. However, changes in employment (from the LFS) or changes in the number of jobs (employee jobs series) are often used as proxy measures for job losses or jobs created. Other sources of data can also be used to give an indication of the trend in jobs lost or created within Scotland. For example from data on businesses, as described in the article in last year's Scottish Economic Statistics, 'Statistical Information on Businesses in Scotland'. ¹⁹

Unemployment

There are two measures of unemployment used in the UK:

• Unemployment (previously known as ILO unemployment)
  This International Labour Organisation definition of unemployment is derived from Labour Force Survey data. It covers people who are: out of work, want a job, have actively sought work in the previous four weeks and are available to start work within the next fortnight; or out of work and have accepted a job that they are waiting to start in the next fortnight.

• Claimant count counts the number of claimants of unemployment-related benefits on the Benefits Agency administrative system. These are currently the Jobseeker's Allowance (JSA) and National Insurance credits, claimed at Employment Service local offices. People claiming JSA must declare that they are out of work, capable of, available for and actively seeking work during the week in which the claim is made. They enter into a Jobseeker's Agreement setting out the action they will take to find work and to improve their prospects of finding employment.

The unemployment rate obtained from the Labour Force Survey is the Government's preferred measure of unemployment. However it is currently less reliable for geographical areas lower than Scotland level and therefore the claimant count unemployment rate is also a key indicator of unemployment.

Chart 4.6 shows that the unemployment rate obtained from the LFS is higher than the claimant count rate for Scotland and the UK. The unemployment rate in Scotland and the UK has decreased since 1993. After 1996 the gap in unemployment between Scotland and the UK widened. This gap has narrowed again slightly in recent years.

Chart 4.6 Claimant count and unemployment rate in Scotland and UK 1992-2004

Economic Activity & Inactivity

The labour market can be divided into two groups, the economically active and inactive. The economically active population are people who are either in employment (employee, self-employed, unpaid family worker or on a government supported training programme) or unemployed and actively seeking work. Economically inactive people are those who are not in work, but who do not satisfy all the criteria for unemployment, such as those in retirement and those not actively seeking work.

Chart 4.2 shows that there has been a slight increase in economic inactivity for males whereas there has been a slight decrease in economic inactivity for females.

Benefits

The claimant count is the number of people claiming Job Seekers Allowance and National Insurance Credits. Analyses of number of claimants of Incapacity Benefit can identify some people who would be classified as inactive and are classified as incapable of work. Job Seekers Allowance (JSA) and incapacity benefit are mutually exclusive and can only be claimed by people who are not in employment. Looking at JSA and incapacity benefit combined gives an indication of overall level of workless people dependent on benefits. Map 4.2 shows the distribution of number of claimants of JSA and incapacity benefit throughout Scotland. Using benefits information in addition to LFS information gives a more detailed picture of the labour market in Scotland.

Map 4.2: Claimants of workless benefits (Jobseekers Allowance and Incapacity Benefit) by Local Authority, August 2003

Vacancies

In September 2001 the Department for Work and Pensions deferred the publication of job centre vacancy statistics. This was due to distortions in the data arising as a result of the introduction of Employer Direct. This required a reorganisation of vacancy recording and resulted in an increase in the share for notified vacancies that Job Centre plus attracts. Vacancies information is a useful indicator of the labour market. Currently the only information which is available for Scotland is number of notified vacancies. This is available by industry ( see table 4.12) and also by occupation for Scotland and Job Centre principal towns and is available from May 2002 onward. There is currently a Vacancy Survey carried out by the Office for National Statistics, however this provides data at the UK level and not for Scotland.

Earnings

The New Earnings Survey is the official source of information for earnings. Gross Average weekly earnings in Scotland in April 2003 were 436.80 (table 4.14). Scotland was ranked 6th out of the eleven government office regions in the GB. Since April 2002 earnings in Scotland had increased by 2.3 per cent. Female earnings were lower than males' at 372.40 (77% of average male earnings). In 2003, average earnings in Scotland were 92 per cent of earnings for GB. Within Scotland, average earnings were highest in Aberdeen City local authority at 524.70 per week and lowest in the Scottish Borders at 355.60 (table 4.15).

New Deal

New Deal is a key part of the government's welfare to work strategy. Summary statistics on the three largest New Deal programmes in Scotland to March 2004 are provided in table 4.16, while chart 4.6 shows participation in each programme since it was introduced. Additional background information on the New Deal was provided in previous editions of Scottish Economic Statistics. More information can be found at www.jobcentreplus.gov.uk

New Deal for Young People (NDYP)

The number of participants in NDYP increased rapidly from the start of the programme in April 1998 and peaked at just under 17,000 participants in July 1999. Since then the number of participants has been decreasing and the current participation level of 10,200 is the lowest since the first few months of the programme. In general the number of starts and leavers in the programme has remained fairly stable since 2000 (except for seasonal effects) although in the last two years the number of leavers has generally exceeded the number of starts. The New Deal for Young People is mandatory for those aged 18-24 who have been unemployed for over 6 months. The number of people aged 18-24 who are unemployed has fallen nearly 40% since 1997 and is 4% down on last year. There has however been a slight increase in recent months in the number of people aged 18-24 who are unemployed over 6 months.

New Deal 25 Plus (ND 25+)

The number of participants in ND 25+ has shown a similar pattern to the NDYP programme with a sharp increase in participation at the start of the programme and then there was a slight dip in participation. Due to a change in the eligibility criteria there was a slight rise in participation in 2001. Recently participation in the programme has continued to decrease with the latest level of 5,800 being the lowest level since the first 6 months of the programme. ND 25+ is mandatory for all people aged over 25 who have been unemployed for over 18 months. The total number of people aged over 25 who are unemployed has decreased by over 40% since 1997 and is nearly 10% down on last year. The number of people aged 25 and over who have been unemployed over 18 months is fairly similar to last year.

New Deal for Lone Parents (NDLP)

The New Deal for Lone Parents is a voluntary programme which is open to any unemployed lone parent who is claiming Income Support and whose youngest child is under 16 years of age. The structure of the programme has changed over the years and currently all new and repeat claimants of Income Support for Lone Parents are required to attend a Work Focused Interview with a Jobcentre Plus Personal Adviser. There is still no requirement to join NDLP but there has been a steep rise in the number of participants since 2001 and NDLP is now the largest New Deal programme with 11,200 participants. Over 33,100 jobs have been gained through NDLP which has helped raise the Lone Parent employment rate from 42% in 1997 to 56% in 2003.

Chart 4.7 Number of participants on New Deal programmes

16-19 year olds Not in Employment, Education or Training

The proportion of 16-19 year olds who are not in education, employment or training (NEET) has been a key measure used to monitor progress in a number of key policy areas for the Scottish Executive including A Smart, Successful Scotland, Building a Better Scotland and Life Through Learning; Learning Through Life and Social Justice - A Scotland Where Everyone Matters.

The official data source for this measure is the Labour Force Survey (LFS), but only a small number of people are sampled from the NEET group in Scotland. This means that limited analysis of the characteristics of the people in this group is possible. In fact only a gender breakdown at a Scottish level is currently possible.

Chart 4.8 shows that since 1999 there has been little change in the percentage of 16-19 year olds not in education, training or employment. The estimate for the year March 2003-February 2004 shows that 14.5 per cent of all 16-19 year olds are not in education, training or employment. Confidence intervals calculated around this point estimate indicate that the true value is likely to lie between 13.2% and 15.8%. Confidence intervals for the change in the levels in the NEET group between any two years show that there is no evidence of any significant change in the number within the group. This shows that although there may actually be a small change, which would be important in delivering policy (i.e. a 1% or 2% change in the proportion), the LFS may not currently be sensitive enough to detect such a change.

Chart 4.8: Percentage Not in Education, Employment or Training, 1996 to 2003

The results of the 2001 Census of population allowed a more detailed analysis of the characteristics of the NEET group and a comparison with the results from the LFS. According to the 2001 Census, 33,400 people aged between 16-19 were NEET in Scotland. This accounted for 13.2% of the total population of that age group, and is slightly lower than the figure recorded in the LFS for the period March 2001-February 2002. The differences can be explained by the different questionnaires, different time periods and sampling error in the LFS. The Census reports that 13.7% of males aged 16-19 were NEET compared to 12.8% of Females aged 16-19. Again these proportions are below the figures reported in the LFS. A comparison of the Census and LFS results are shown below.

Table 4.A: Comparison of NEET measurements from the Census and LFS

Using Census data, further analysis of young people aged 16 to 19 (excluding students) who were not in education, training or employment in the week before the Census was undertaken by:

• Age
• Economic status
• Local authority areas.

Age

Table 4.B shows that the overall proportion of people in the NEET category increases from age 16, peaks at 18 and falls slightly for 19 year olds, with males showing a similar pattern. However for females, the highest proportion who are NEET occurs at age 19. Nineteen was the only age for which there was a higher proportion of females than males in the NEET group.

Table 4.B: Proportion NEET by Age and Gender

Economic Status

Chart 4.9 below shows the split of those who were NEET by whether they were unemployed or economically inactive. Of all 16-19 year olds in the NEET group, 60 per cent were unemployed and 40 per cent were economically inactive. However, for males a higher proportion (71%) of NEET were unemployed whereas more females (52%) were classed as economically inactive.

Chart 4.9: NEET Group by Unemployment and Economically Inactive

Local Authority areas

Table 4.17 shows that Glasgow City had the highest level and proportion of 16-19 year olds in the NEET category with just under 6,000 people, which accounted for almost 1 in 5 people in the 16-19 year age group. North Ayrshire, Clackmannanshire and East Ayrshire also had relatively high proportions overall.

Glasgow had the highest level of males in the NEET group (20.6%) compared to other local authority areas in Scotland. Clackmannanshire had the highest proportion of females in the NEET group (but this accounts for just over 200 people). Glasgow had the highest number of females in the NEET category with just over 2,800 people.

In some local authority areas, for example North Ayrshire, Dumfries & Galloway and Fife, there were similar levels of males and females in the NEET category. Other areas had higher proportions of males in the NEET group. These include Glasgow, Falkirk, North Lanarkshire and Dundee. Falkirk and Glasgow in particular had higher proportions of males in the NEET group. The areas that had higher proportions of females in the NEET category include Clackmannanshire, East Ayrshire, East Lothian, Argyll & Bute and Shetland Islands.

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