Local Area Labour Markets in Scotland - Statistics from the Annual Population Survey 2012

Sub-section A: Unemployment

Unemployment covers individuals who are not in work, but are available for and actively looking for work. The level of unemployment varies with the economic cycle.
For example, when the economy is strong employers create more jobs and unemployment falls. Conversely when the economy is weak, there is a reduction in job opportunities and unemployment rises.

Box 5 - Unemployment

Unemployment levels and rates from the Labour Force Survey and the Annual Population Survey (APS) are measured following the internationally agreed definition recommended by the International Labour Organisation (ILO) - an agency of the

United Nations. The ILO definition of unemployment covers people who are:

• without a job, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks; or
• out of work, have found a job and are waiting to start it in the next two weeks.

Unemployment levels cover all workers aged 16 and over.

Unemployment rates are the number of unemployed people expressed as a percentage of the relevant economically active population, normally those aged 16 and over.

The most up to date estimates for unemployment are taken from the Labour Force Survey (LFS) as this provides a more current picture of unemployment in Scotland than the APS. Monthly unemployment data for the countries of the UK can be found in the monthly Labour Market briefing.

Analysis by age, gender, duration and disability

Based on the APS for 2012:

• There were 213,100 people aged 16 or over who were unemployed in Scotland, a decrease 3,100 over the year, but an increase of 82,700 since the start of the recession in 2008.
• The unemployment rate was 7.9% in Scotland, down 0.1 percentage point over the year, but up 3.0 percentage points since 2008.
• In the UK, the unemployment rate was 7.9%, (similar to the rate in Scotland), and also down 0.1 percentage points over the year, but up 2.2 percentage points since 2008.
• Just under 4 in 10 of all unemployed people in Scotland are aged 16-24, a higher proportion than for any of the other major age groups. The majority (60%) of these unemployed 16-24 year olds are males.
• The youth unemployment rate (16-24) in Scotland was 20.7%, 0.2 percentage points lower than the rate in the UK. The rate in Scotland has increased by 7.1 percentage points since 2008, higher than the increase of 5.9 percentage points in the UK over the same period.

Figure 13: Comparison of unemployment rates by gender and age in Scotland and UK, 2012

Source: Annual Population Survey, Jan-Dec, ONS

• Just under 48% (101,600) of all unemployed people in Scotland have been unemployed for less than 6 months, while just under 33% (70,100) have been unemployed for 12 months or more, of which, just under two-thirds (44,600) are males.
• The unemployment rate for disabled people (for those aged 16-64) in Scotland rose by 1.2 percentage points over the year to 12.6%, with the level increasing by 4,000 to 50,500. Over the same period the 16-64 unemployment rate for Scotland remained unchanged at 8.1%.

Unemployment levels and rates by gender and age for 2004 to 2012 are provided in the web tables. Duration of unemployment data is also provided in the web-tables.

Local Authority area level analysis - Model based unemployment

Given that the unemployed are a relatively small sub-group of the total population, their sample sizes in the APS datasets are also small and thus have large sampling variability. To improve the quality and reliability of unemployment estimates for all local authorities, the Office for National Statistics (ONS) developed model-based unemployment estimates, as outlined in Box 6.

Box 6 - Model based unemployment

In 2003, ONS developed a statistical model to improve small area estimates of unemployment by using supplementary information from the claimant count - a count of the number of people claiming Jobseeker's Allowance. As it is an administrative measure, accurate information is known for all areas. It is also highly correlated with unemployment. The model is said to borrow strength from the claimant count. The model also includes a socio-economic indicator and a random area effect.

More information about the modelling methodology can be found here:

Figure 14: Model Based Unemployment (MBU) across Local Authority areas in Scotland, 2012

Source: Annual Population Survey, Jan-Dec, ONS

Model based unemployment levels and rates for 2008, 2010, 2011 and 2012 are provided in Annex A, with a full time series available in the web tables.

16 to 19 year olds Not in Employment, Education or Training (NEET)

Figure 15 shows how the NEET group has changed in Scotland between 2004 and 2012.

In 2012 33,000 (13.3%) of 16-19 year olds were not in education, employment or training. The proportion NEET has increased by 0.9 percentage point (up 1,000) since 2011; this change is not statistically significant⁹.

Figure 15: Percentage of 16-19 year olds NEET by gender, Scotland, 2004-2012

Levels and proportions of NEET by gender for 2004 to 2012 are provided in Annex A and the web tables.

Box 7 - Measuring the NEET group

In 2006 the Scottish Government commissioned the Training and Employment Research Unit (TERU) at Glasgow University to explore different ways of measuring the NEET group and present recommendations on the best measurement options. The following recommendations were made:

At Scotland level:

The Annual Population Survey (APS) is the recommended source to measure the size of the NEET group in Scotland.

At Local Authority level:

A combination of DWP benefits data and school leaver destinations data should be used to monitor the NEET group at a local level. Information on levels and rates of known NEET at local authority level for 2004 to 2012 can be accessed at: http://www.scotland.gov.uk/Topics/Statistics/Browse/Labour-Market/MCMCLMSTATS

The full report outlining the work and recommendations made by TERU can be found at: http://www.scotland.gov.uk/publications/2006/07/28090808/0

Recent developments

Historically, it has been difficult to make robust conclusions when comparing proportions of young people NEET internationally, due to differing definitions of NEET.

ONS, with other UK administrations and departments have agreed a consistent methodology for defining whether a young person is NEET and this methodology has been adopted for this publication. Although this methodology uses a different combination of LFS/APS variables compared to the methodology used in previous years by the Scottish Government, the results are very similar.

The Scottish Government focuses on 16-19 year olds in this publication as this is the age group at which policy interventions are targeted at present.