Methodology description of the labour force sample survey

Canada 1997

Labour Force Survey (LFS)
Survey has been conducted since 1945

Statistics Canada/Statistique Canada
Ottawa, Canada
K1A 0T6

a) geographical: Canada's ten provinces;

b) person covered: civilian, non-institutionalized population 15 years of age or older.

Excluded are:

- residents of the Yukon and Northwest Territories;
- persons living on Indian Reserves;
- full-time members of the Canadian Armed Forces;
- persons living in institutions (for example, inmates of penal institutions and patients in hospitals or nursing homes who have resided in the institution for more than six months).

The excluded groups together represent an exclusion of approximately 2% of the population aged 15 or over.

Since 1952 the LFS has become a monthly survey. Before it was conducted on a quarterly basis.

The calendar week (from Sunday to Saturday) usually containing the 15th day of the month.
The interviews are conducted during the following week (called the Survey Week), and the labour force status determined is that of the reference week.

The objectives of the LFS are to divide the working-age population into three mutually exclusive classifications - employed, unemployed, and not in the labour force- and to provide descriptive and explanatory data on each of these categories. Since 1960 the LFS has been the source of the official measure of unemployment in Canada.
Employment estimates include detailed breakdowns by demographic characteristics, industry and occupation, job tenure, and usual and actual hours worked. The survey incorporates questions permitting analyses of many topical issues, such as involuntary part-time employment, multiple job-holding, and absence from work. Since January 1997, it also provides monthly information on the wages and union status of employees, as well as the number of employees at their workplace and the temporary or permanent nature of their job.
Unemployment estimates are produced by demographic group, duration of unemployment, and activity before looking for work. Information on industry and occupation, and reason for leaving last job is also available for persons currently unemployed or not in the labour market with recent labour market involvement.

The concepts of employment and unemployment are derived from the theory of the supply of labour as a factor of production. The production referred to is in turn defined as those goods and services included in the System of National Accounts. For this reason, unpaid housework and volunteer work are not counted as work by the survey, although these activities need not differ from paid work, either in purpose or in the nature of the tasks completed.
While the logical and precise unit of measurement of total labour supply is person-hours, the conceptual terms of reference for the survey require that individual members of the population be classified as employed, unemployed, or not in the labour force. Accordingly, persons who are supplying services in the reference period, regardless of the quantity supplied, are classified as employed while those who provide evidence that they are offering their labour services to the market (again regardless of quantity) are classified as unemployed. The remainder of the population, those neither currently supplying nor offering their labour services, are referred to as persons not in the labour force.

The concepts and definitions of employment and unemployment adopted by the survey are based on those endorsed by the International Labour Organization (ILO).

EMPLOYMENT: Employed persons are those who, during the reference week:

1. did any work at all at a job or business, that is, paid work in the context of an employer-employee relationship, or self-employment. It also includes unpaid family work, which is defined as unpaid work contributing directly to the operation of a farm, business or professional practice owned and operated by a related member of the same household; or
2. had a job but were not at work due to factors such as own illness or disability, personal or family responsibilities, vacation, labour dispute or other reasons (excluding persons on layoff, between casual jobs, and those with a job to start at a future date).

UNEMPLOYMENT: Given the concept of unemployment as the unutilized supply of labour, the operational definition of unemployment is based primarily on the activity of job search and the availability to take a job. In addition to being conceptually appropriate, job search activities can, in a household survey, be objectively and consistently measured over time. The definition of unemployment is therefore the following:
Unemployed persons are those who, during reference week:

1. were on temporary layoff during reference week with an expectation of recall and were available for work, or
2. were without work, had actively looked for work in the past four weeks, and were available for work, or
3. had a new job to start within four weeks from reference week, and were available for work.

Persons are regarded as available if they reported that they could have worked in the reference week if a suitable job had been offered (or recalled if on temporary layoff); or if the reason they could not take a job was of a temporary nature such as: because of own illness or disability, personal or family responsibilities, because they already have a job to start in the near future, or because of vacation (prior to 1997, those on vacation were not considered available).
Full-time students currently attending school and looking for full-time work are not considered to be available for work during the reference week. They are assumed to be looking for a summer or co-op job or permanent job to start sometime in the future, and are therefore not part of the current labour supply.
Note that in the above definition there are two groups for which job search is not required: persons on temporary layoff and persons with a job to start at a definite date in the future. Persons on layoff are included among the unemployed on the grounds that their willingness to supply labour services is apparent in their expectation of returning to work. A similar argument is applied for persons who will be starting at a new job in four weeks or less.
Finally, for the purposes of measuring job search as part of the identification of the unemployed, the LFS uses a four-week search period although the reference period for identifying the employed is that of one week. The justification for the difference is that delays inherent in job search (for example, periods spent awaiting the results of earlier job applications) require that the active element of looking for work be measured over a period greater than one week if a comprehensive measure of job search is to be obtained.

NOT IN THE LABOUR FORCE: Persons not in the labour force are those who, during the reference week, were unwilling or unable to offer or supply labour services under conditions existing in their labour markets, that is, they were neither employed nor unemployed.

INDUSTRY CLASSIFICATION: Standard Industrial Classification is adopted. For confidentiality reasons the SIC classification is grouped in 47 categories.

OCCUPATION: Standard Occupational Classification is adopted. For confidentiality reasons the SOC classification is grouped in 49 categories.

Sample design and size
Canada's population lives in various geographic areas such as provinces and regions within provinces. For the purposes of sampling, the population in these areas is further partitioned into strata, in order to maximize the reliability of the estimates while keeping collection costs at a minimum. Households in strata are not selected directly. Instead each stratum is divided into clusters, and then a sample of clusters is selected in the stratum. Then, in each selected cluster, a sample of households is chosen. Chosen in this fashion, the sample is representative of the population.
The number of households sampled across the country has varied over the years as a result of varying levels of funding, and improvements in the survey design. The sample size has been 52,350 households since July 1995. The sample is allocated to provinces and strata within provinces in the way that best meets the need for reliable estimates at various geographic levels. These include national, provincial, census metropolitan areas (large cities), economic regions, and employment insurance regions. The following guidelines were used in sample allocation:

Rotation of the sample
The LFS follows a rotating panel sample design, in which households remain in the sample for six consecutive months. The total sample consists of six representative sub-samples or panels, and each month a panel is replaced after completing its six month stay in the survey.
Outgoing households are replaced by households in the same or a similar area. This results in a five-sixths month-to-month sample overlap, which makes the design efficient for estimating month-to-month changes. The rotation after six months prevents undue respondent burden for households that are selected for the survey.

 

Non-Response to the LFS
Non-response to the LFS tends to average about 5% of eligible households. Interviewers are instructed to make all reasonable attempts to obtain LFS interviews with members of eligible households. For individuals who at first refuse to participate in the LFS, a letter is sent from the Regional Office to the dwelling address stressing the importance of the survey and the household's co-operation. This is followed by a second call (or visit) from the interviewer. For cases in which the timing of the interviewer's call (or visit) is inconvenient, an appointment is arranged to call back at a more convenient time. For cases in which there is no one home, numerous call backs are made. Under no circumstances are sampled dwellings replaced by other dwellings for reasons of non-response.
Each month, after all attempts to obtain interviews have been made, a small number of non-responding households remain. For households non-responding to the LFS and for which LFS information was obtained in the previous month, this information is brought forward and used as the current month's LFS information. If no information is available, a weight adjustment is applied to account for non-responding households.

 

Weighting
The sample data must be weighted to enable tabulations of estimates at national, provincial, and subprovincial levels of aggregation. The sample design determines a certain number of weighting factors to be used in the calculation of the individual weights. The main component is the inverse of the probability of selection, known as the basic weight. For example, in an area where 2 percent of the households are sampled, each household would be assigned a basic weight of 1/.02=50. The basic weight is then adjusted for any sub-sampling due to growth that may have occurred in the area. This weight is then adjusted for non-response and coverage error.
In the LFS, some survey non-response is compensated for by carrying forward last month's data if they are available and appropriate. Any remaining non-response is accounted for by adjusting the weights for the responding households in the same area. This non-response adjustment assumes that the characteristics of the responding households are not significantly different than the non-responding households. To the extent that this assumption is true, non-response will not be a source of bias in the LFS estimates. The weights derived after the non-response adjustments are applied are called the subweights. The final adjustment to the weight is made to correct for coverage errors. The subweights are compared to independently derived estimates of population and adjusted so that the survey estimates of population conform to these control totals. These final weights are used in the LFS tabulations.

The LFS is the only source of monthly estimates of total employment including the self-employed, full and part-time employment, and unemployment. It publishes monthly standard labour market indicators such as the unemployment rate, the employment rate and the participation rate.
In addition to providing national and provincial estimates, the LFS also releases estimates of labour force status for subprovincial areas such as Economic Regions and Census Metropolitan Areas.

 

A broad range of tabulated data compiled from the Labour Force Survey is contained in regular publications, on CD-ROM, and CANSIM (Statistics Canada’s On-line electronic data-base). Analyses focusing on particular aspects of the labour market are published on a quarterly basis by the LFS. In addition, analytical articles based on LFS data frequently appear in popular Statistics Canada flagship publications such as Perspectives on Labour and Income, Canadian Social Trends, and the Canadian Economic Observer. However, the wealth of information that can be extracted from the survey, and the variety of questions that can be addressed, are far too vast for regular publication. In order to meet particular analytical needs, and address issues of current interest, the survey provides a custom tabulation service on a cost-recovery basis. A public use microdata file is also available for clients wishing to do their own data extractions and analyses.

 

Monthly: Labour Force Information (Cat. 71-001-PPB)
Quarterly: The Labour Force: Update series (Cat. 71-001-XPB)
Annual: Labour Force Historical Review on CD-ROM (71F0004XCB)
Annual: Historical Labour Force Statistics (Cat. 71-201-XPB)
CANSIM (Statistics Canada's electronic on-line database)