Controversy over new definition for measuring unemployment

Download article in original language : ES0202214FES.DOC

In line with criteria laid down by Eurostat, the definition of unemployment used in Spain's EPA labour force survey has been changed from January 2002. As the new criteria are stricter than those previously used in Spain, the number of unemployed people measured by the EPA will fall considerably. Trade unions and other critics claim that this change will disguise the real situation on the labour market.

As of January 2002, the quarterly Survey of the Active Population (Encuesta de Población Activa, EPA), which measures aspects of the Spanish labour market, has changed its definition of unemployment to comply with criteria laid down by Eurostat. Under the Eurostat definition, unemployed people are only those persons who are registered as such at the employment office — in Spain, the National Institute for Employment (Instituto Nacional de Empleo, INEM) — and who have contacted the office in order to seek work actively in the four weeks previous to the survey. People who are registered and wait for the employment office to contact them will no longer be counted: in order to be considered as active job-seekers, unemployed people must contact the employment office at least once a month.

It is not known what will happen in Spain after this new measure has been in operation for several months, but it is calculated that immediately — ie in the figures published for the first quarter of 2002 — between 400,000 and 500,000 persons will be excluded from the unemployment list and will join the 'inactive' list. This will lead to a fall of two to three points in the unemployment rate.

In addition to the new criteria on measuring unemployment, the National Institute of Statistics (Instituto Nacional de Estadística, INE) will change the weighting of the EPA, in particular by increasing the presence in the sample of persons aged 25 to 49 years. Because this is the age-group with highest levels of activity, the EPA's measure of employment and unemployment in this group will increase — though the latter far less — and the number of inactive persons will fall. Thus, the calculation of the number of active persons will rise by 896,000, the number of employed by 811,000 and the number of unemployed persons by 85,000.

Thirdly, the EPA survey will now take more into account the immigrants who have increased the Spanish population in the last decade. Consequently, the number of active persons will rise by 418,000, the number of employed persons by 375,000 and the number of unemployed persons by 42,000.

As a general effect of all these changes, in the opinion of the INE, the number of active persons and employed persons as measured by the EPA will increase, by 1.3 and 2.5 percentage points respectively, but the number of unemployed people will decrease by 2.5 points. It is this last aspect that has caused controversy.

Reactions

The trade unions have stated their discontent with the the new definition of the unemployment. They stress that the traditional practice of unemployed people visiting the employment office every three months to renew their registration is so deeply rooted that it is unlikely to change. If someone registers at INEM it is because they want to find work, say the unions, and therefore the former requirement was sufficient. It is true that many unemployed persons take no other active step to find employment than this, but this is understandable because for many people it is objectively very difficult to find employment. This in no way means that they are unwilling to work.

The General Workers' Confederation (Unión General de Trabajadores, UGT) claims that the measure is aimed more at reducing the unemployment figures than at identifying the true situation on the labour market. Therefore, it has asked that the EPA should continue publishing also the figures for the group formerly considered as unemployed but now considered as inactive, because if they are identified they can be given some type of support. The Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) claims that the change is a trick with which Eurostat aims to cover up ineffective employment policies by touching up the statistics.

After opposing the Eurostat definitions for some time, INE finally accepted them with the argument that persons who are not actively and clearly seeking employment are not really unemployed. This is a viewpoint that some people have been promoting for some time, and critics claim that for the current government it is a convenient way to reduce the unemployment figures.

The group no longer considered unemployed

According to several experts and to INE itself, most of the 500,000 people who will no longer be considered as unemployed by the EPA are likely to be women. Among these women there are two main groups. The first group is composed of those who are seeking to join the labour market after bringing up children for many years. Domestic obligations make it more difficult for them actively to seek employment than it is for men. The second group is composed of those who have traditionally worked in the 'clandestine' economy, whether in industry or services, and particularly in domestic service, and who registered at INEM with the hope of finding a formal job during the economic boom. Due to their age and work culture, these people are less likely to be attentive to the conditions set by the employment office. Both groups of women, however, explicitly wish to find a job.

A third group affected may be men who have lost their jobs at the age of over 50 after many years of stable employment. These people, who may wish and need to return to work, may fail to meet the new conditions because they lack the habit of job-seeking and are discouraged about the new stage they have entered in their working lives. According to commentators, they should be given particular help to seek a new job in very adverse circumstances.

According to a number of sociologists and psychologists, there are no reasons to assume that most of the people now excluded from the unemployment statistics are unwilling to find a new job.

Commentary

For almost four decades, the Survey of the Active Population has been the main source of figures for analysing the labour situation in Spain. It is carried out quarterly on a sample of 60,000 families, and is recognised as a highly reliable instrument, though its estimation of unemployment has always been higher than that given by the INEM register, precisely because this not only requires persons to be unemployed, but also to be registered as such. For INEM it is sufficient to renew registration every three months, so we may now reach the paradox that 'real unemployment' (as measured by the EPA) may be lower than 'registered unemployment' (as measured by INEM).

The criterion imposed by Eurostat is incoherent, at least from the viewpoint of Spain, because it mixes criteria based on scientific knowledge of the phenomenon of unemployment with criteria of 'employment policy'. INEM is a public service aimed at helping people to find work. It would be legitimate to declare that anyone who does not wish to accept a job that can be considered suitable, or who does not wish to receive training, cannot be considered as unemployed. However it seems unreasonable to define as inactive someone who fails to visit the INEM office every month, particularly in a world in which communication has become so easy. Furthermore, the thousands of vacancies managed by INEM that remain unfilled every year may reflect shortcomings of the service offered ,in addition to unwillingness of unemployed people to accept the jobs.

The changes to the EPA survey arguably seems to have only one aim: to reduce the unemployment rate by several points at a stroke, in view of the failure of employment policies or perhaps the fear that unemployment will rise sharply again. In time it will be seen to be a useless measure, because unemployment is a reality that cannot be concealed by statistical tricks.

For a problem of the magnitude of unemployment, it would be more reasonable to be lax rather than strict in counting the figures — ie it would be preferable to count more rather than fewer unemployed people. The requirements for receiving unemployment benefit are laid down by the politicians, but the counting of unemployed people should follow technical criteria. Of course, unemployed people should be counted by the same criterion across the whole of the EU, but the institutes that study the phenomenon should decide the criterion without political imposition. As a journalist stated recently with reference to Spain: 'without changing the reality at all, we will now be European through the art of statistics'.(Fausto Miguélez, QUIT-UAB).

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Dodaj nov komentar