Technical Notes on the Labor Force Survey (LFS)

Release Date: 

Friday, May 4, 2012

1. Introduction 

1.1 General Background

The stability and growth of a country’s economy hinges on its ability to produce goods and services for both domestic and international use.  Labor represents an important factor of production, hence, the improvement of the quality of the labor force and efforts to make it more productive and responsive to growth are necessary for the development of the economy.  A clear knowledge and understanding of the size, composition and other characteristics of the segment of the population is a big step in this direction.  A continuing supply of the data on labor force is indispensable to national and local development planning.
 
The Labor Force Survey (LFS) is a nationwide quarterly survey of households conducted by the Philippine Statistics Authority (PSA) to gather data on the demographic and socio-economic characteristics of the population.
 

1.2 Objectives of the Survey

The LFS aims to provide a quantitative framework for the preparation of plans and formulation of policies affecting the labor market.
 
Specifically, the survey is designed to provide statistics on levels and trends of employment, unemployment and underemployment for the country, as a whole, and for each of the administrative regions.
 

1.3 Scope and Coverage of the Survey

Starting July 1987, the LFS used a new questionnaire design and adopted modifications in the concepts and definitions for measuring labor force and employment characteristics. The design was based on a past week reference period and the new concept on “availability and looking for work” was adopted. 
 
The questionnaire was revised in January 2001 with the inclusion of questions on salaries and wages, new entrants, and other occupations, among others.  It was further revised in January 2002 with the inclusion of the line number of respondent and a screening question, whether the household member has another job or business during the past week.  Also, items of inquiry that were deemed necessary to adequately capture the availability criterion and to reflect the reference period for identifying the discouraged workers were incorporated in the LFS questionnaire in April 2005. These changes were needed to adopt the international standard definition of unemployment.  Some questions on the elements of decent work were also included such as reasons for working more than 48 hours, as well as questions for children on their attendance to school.  
 
Starting April 2016 round, the Labor Force Survey (LFS) adopted the 2013 Master Sample Design, with a sample size of approximately 44,000 households.  The population projections based on the 2010 Census of Population and Housing (CPH) has also been adopted to generate the labor force statistics.  Starting January 2017 round, Computer Aided Personal Interviewing (CAPI) using Tablet was utilized in the LFS enumeration.
 
The survey involved the collection of data on demographic and socio-economic characteristics of the population in general.  The reporting unit was the household which implied that the statistics emanating from this survey referred to the characteristics of the population residing in private households.  Persons who reside in institutions are not within the scope of the survey.

2. Concepts, Definitions and Explanations

This section presents the important concepts used in the LFS. Concepts and definitions mentioned in previous Integrated Survey of Households (ISH) series are, in most cases, the same as the ones presented here.

2.1 Barangay

A barangay is the smallest political subdivision in the country, several of which comprise one city or municipality.  For purposes of enumeration in the LFS, a barangay is considered the basic geographic enumeration area.

2.2 Household

A household is an aggregate of persons, generally but not necessarily bound by ties of kinship, who sleep in the same dwelling unit and have common arrangements for the preparation and consumption of food.  Members comprise the head of the household, relatives living with him, and other persons who share the community life for reasons of work or other consideration.  A person who lives alone is considered a separate household.

2.3 Reference Period

The reference period for this survey is the “past week” referring to the past seven (7) days preceding the date of visit of the enumerator or interviewer.

2.4 Employment Status Concepts

2.4.1 Population 15 Years Old and Over

This refers to number of population 15 years old and over excluding overseas workers.  Overseas workers are excluded in the estimation of the size of working population (population aged 15 years and over) since the data on their economic characteristics are not collected because they are not considered part of the labor force in the country.

2.4.2 In the Labor Force or Economically Active Population

This refers to persons 15 years old and over who are either employed or unemployed in accordance with the definitions described as follows.

2.4.3 Employed

Employed persons include all those who, during the reference period are 15 years old and over as of their last birthday and are reported either:

a. At work. Those who do any work even for one hour during the reference period for pay or profit, or work without pay on the farm or business enterprise operated by a member of the same household related by blood, marriage or adoption; or

b. With a job but not at work. Those who have a job or business but are not at work because of temporary illness or injury, vacation or other reasons. Likewise, persons who expect to report for work or to start operation of a farm or business enterprise within two weeks from the date of the enumerator’s visit are considered employed.

2.4.4 Underemployed

Underemployed persons include all employed persons who express the desire to have additional hours of work in their present job, or an additional job, or to have a new job with longer working hours.  Visibly underemployed persons are those who work for less than 40 hours during the reference period and want additional hours of work.

2.4.5 Unemployed

Unemployed persons include all those who, during the reference period, are 15 years old and over as of their last birthday and reported as:

a) Without work, i.e., had no job or business during the reference period; and
 
b) Currently available for work, i.e., were available and willing to take up work in paid employment or self-employment during the reference period, and/or would be available and willing to take up work in paid employment or self-employment within two weeks after the interview date; and
 
c) Seeking work, i.e., had taken specific steps to look for a job or establish a business during the reference period, or not seeking work due to the following reasons: (1) tired or believed no work available, i.e., discouraged workers; (2) awaiting results of previous job application; (3) temporary illness or disability; (4) bad weather; and/or (5) waiting for rehire or job recall.

2.4.6 Persons Not in the Labor Force

Persons 15 years old and over who are neither employed nor unemployed according to the definitions mentioned.  Those not in the labor force are persons who are not looking for work because of reasons such as housekeeping, schooling and permanent disability.  Examples are housewives, students, disabled, or retired persons.

2.4.7 Determination of Employment Status

The employment status of persons 15 years and over is determined on the basis of answers to a series of inter-related questions which are described below:

a. “Did____ do any work at all even for only one hour during the past week?”  This question is asked to identify the employed persons.  “Work at all” for purposes of this survey means that a person reported to his or her place of work and performed duties or activities for at least one hour during the reference week.  If a person reported that he or she did some work, not counting chores around the house, the person is still considered in the employed category although most of his or her time was devoted to household chores.  All persons not identified as employed in the above question are asked the following questions.
 
b. “Although ____ did not work, did ____ have a job or business during the past week?”  Some persons may not have worked at all during the past week but may actually have jobs or businesses on which they are temporarily not reporting to, as in the following cases: an employee on strike; a person temporarily laid off due to non-economic reasons like machine breakdown; a person with a new job to begin within two weeks from the date of interview; and regular and temporary teachers during summer vacation, excluding substitutes, who still receive pay and are expected to go back to their jobs in the next school year.  These persons are considered employed even though they are not actually at work.
 
c. “Did ____ look for work or try to establish a business during the past week?”  This question is asked to determine who among those who had no job or business had really done something to look for work.  If a person looked for work and is reported as currently available for work, he or she is classified as unemployed.  Otherwise, if a person is not currently available for work, the next question is asked to determine whether he or she should be classified as unemployed or not in the labor force.
 
d. “Why did ____ not look for work?”  This question seeks to determine if the main reason for not looking for work of a person who is reported as currently available for work is valid (see definition of unemployed), in which case, he or she is considered unemployed.
 
If the answer to this question is schooling, housekeeping, too young or too old or retired, permanent disability, or reasons other than those considered as valid, then the person is excluded from the labor force.
 
2.4.8 Old Definition of Unemployment
 
The old definition considered a person unemployed if he or she has no job or business during the reference period and is actively looking for work.  Also considered as unemployed are persons without a job or business who are reported not looking for work because of the belief that there is no work available, or because of temporary illness or disability, bad weather, pending job application, or waiting for job interview. 
 
2.5 Work
 
Work means any economic activity a person does for pay during the past week, in cash or in kind, in any establishment, office, farm, private home, or for profit; or without pay on a family farm or enterprise.  It also includes the activities engaged in by a farm operator or member of the operator’s family, on the farm operated by another household on exchange labor arrangement.
 
In addition, any activity that a person does during the past week in relation to minor activities in home gardening; raising of crops, fruits, hogs, poultry and others; fishing for home consumption; and manufacturing for own use, are also considered work. However, for these activities to be considered work there must be some harvest in the case of home gardening, raising of crops, fruits and nuts, and gathering of wild fruits and vegetables; animals disposed of (sold, consumed, bartered or given away); or some catch in fishing.
 

2.6 Occupation and Industry

The data on occupation and industry relate to the job held by employed persons during the past week.  Occupation refers to the specific kind of work a person does, while industry refers to the nature or character of the business or enterprise or the place where a person works.  Persons employed in two or more jobs are reported in the job: (1) that is permanent, whether full time or part time; (2) where they worked more hours, if all are permanent jobs; or (3) where they derive more income, if all are permanent jobs with equal hours of work.
 
The 2009 Philippine Standard Industrial Classification (PSIC) codes were used starting January 2012 while the 2012 Philippine Standard Occupational Classification (PSOC) codes were used starting April 2016.

2.7 Class of Worker

Employed persons are classified according to seven categories, namely:

2.7.1. Worked for private household

These are employed persons working for pay in a private household, in cash or in kind. Examples are domestic helper, household cook, gardener, and family driver.

2.7.2. Worked for private establishment.

These are persons working for pay in a private establishment, in cash or in kind.  Examples are public transport drivers who do not own the vehicle but drive them on boundary basis, persons working in public work projects on private contractors, dock hands or stevedores, and cargo handlers in railroad stations or piers. This category includes not only persons working for a private industry but also those working for a religious group, missionary, unions and non-profit organizations, as well as Filipinos working in embassies, legation, chancelleries or consulates of foreign government in the Philippines, and Filipinos working in international organizations of sovereign states of governments like the United Nations (UN) and World Health Organization (WHO). 

2.7.3 Worked for government and government-controlled corporation

These are persons working for the Philippine government or a government corporation or any of its instrumentalities.  This category of worker includes the following workers: employees of national government agencies and local government units; employees of government-owned and -controlled corporations and financial institutions like the Government Service and Insurance System (GSIS), Social Security System (SSS), National Power Corporation (NPC), Bangko Sentral ng Pilipinas (BSP); and civilian and military personnel of the Armed Forces of the Philippines (AFP) including chaplains, doctors, nurses, and dentists.

2.7.4 Self-employed

These are persons who operate their own businesses or trades and do not employ paid workers in the conduct of their economic activities.  This category includes workers who worked purely on commission basis and who may not have regular working hours.

2.7.5 Employers

These are persons who employ one or more paid employees in the operation of their businesses or trades. Thus, domestic helpers, family drivers and other household helpers who assist in the family-operated business, regardless of time spent in this activity, are not hired employees in the enterprise/business. A farm or business proprietor who is assisted purely by such domestic help is not also considered an employer.

2.7.6 Worked with pay in own family-operated farm or business

These are members of the household who receive cash, or fixed share of the produce, as payment for their services in a farm or business operated by another member living in the same household. 

2.7.7 Worked without pay in own family-operated farm or business

These are members of the household who assist in the operation of own family-operated farm or business, and do not receive any wage or salary for their work.  The room and board and any cash allowance given as incentives are not counted as compensation for these family workers.

2.8 Number of Hours Worked

Number of hours worked refers to the actual number of hours engaged in by a person in all the jobs or businesses that he or she held during the past week.  It includes the duration or the period when the person was occupied with his or her work, including overtime, but excluding hours paid but not worked.  The normal working hours per day is the usual or prescribed working hours of a person in his or her primary job or business which is considered a full day’s work.

2.9 Averages
 
The averages shown in this report are arithmetic means.
 
2.10 Rounding of Estimates
 
Individual figures are independently rounded to the nearest thousands; hence, group totals may not always be equal to the sum of the individual figures.
 
2.11 Comparability with Related Data
 
The information presented here are obtained from sample households.  Differences observed among corresponding figures obtained from a complete count or another independent survey using the same schedules and instructions are due to sampling variations and other biases not attributable to sampling.  Due to the difference in primary sampling units, the employment data obtained from household surveys may differ from employment data based on reports from establishment surveys.

3. Survey Design

3.1  The 2013 Master Sample for Household-Based Surveys

 
The Philippine Statistics Authority (PSA) carries out nationwide regular household-based surveys such as the following: Labor Force Survey (LFS) at a quarterly basis; Family Income and Expenditure Survey (FIES) every three years; Survey on Overseas Filipinos (SOF) on an annual basis; Annual Poverty Indicators Survey (APIS) conducted during non-FIES years; Functional Literacy, Education and Mass Media Survey (FLEMMS) every five years; and other donor-supported surveys such as: Family Health Survey (FHS); National Demographic and Health Survey (NDHS);  Survey of Children (SOC); Multiple Indicator Cluster Survey (MICS); Household Energy Consumption Survey (HECS); Household Survey on Domestic Visitors (HSDV); Global Adult Tobacco Survey (GATS), and others. 
 
In order to be more efficient in the conduct of these surveys, PSA designs a master sample consists of randomly assigned and selected set of geographic areas with non-overlapping and discernable boundaries known as the primary sampling units (PSUs). The primary sampling unit (PSU) can be (1) the whole barangay, or (2) a portion of a large barangay, or (3) combinations of small barangays.  
 
Provinces and Highly Urbanized Cities as Sampling Domain
 
To provide subnational or provincial level statistics with precise estimates the 2013 MS has 117 major domains as follows: 81 provinces (including the newly created province Davao Occidental); 33 highly urbanized cities (including 16 cities in the National Capital Region); and 3 other areas (Pateros, Isabela City, and Cotabato City).
 
Primary Sampling Units
 
In the 2013 Master Sample Design each sampling domain (i.e, province/HUC) is divided into exhaustive and non-overlapping area segments known as Primary Sampling Units (PSUs) with about 100 to 400 households. Thus, a PSU can be a barangay/Enumeration Area (EA) or a portion of a large barangay or two or more adjacent small barangays/EAs. 
 
2x2x2 Implicit Stratification
 
The PSUs are then ordered according to the following: (1) North-South/West-East Geographic location; (2) Decreasing Proportion of HHs with Overseas Worker; and (3) Decreasing wealth Index.
 
Replicates
 
From the ordered list of PSUs, all possible systematic samples of 6 PSUs will be drawn to form a replicate for the most of the province domain i.e., 75 out of 81 provinces while all possible systematic samples of 8 PSUs will be drawn to form a replicate for most of the HUCs,i.e., 31 of 33 HUCs.
 
Small province domains such as Guimaras, Siquijor, Camiquin, Apayao and Dinagat Islands will have 3 PSUs per replicate.  Batanes with very small PSUs formed will have 3 PSUs per replicate but will be covered twice a year only (i.e., January and July rounds only).  For other HUCs, San Juan City and Lucena City will have 3 and 5 PSUs per replicate while the other urban areas, Pateros, and City of Isabela will also have 3 PSUs per replicate while Cotabato City will be allocated with 5 PSUs per replicate.
 
For instance, in Cagayan with 1008 PSUs formed.  A total of 1008/6 = 168 possible systematic samples of size 6 or 168 R groups or replicates can be made.  The 168 replicates formed are then sorted at random so that the first 4 replicates will be in the first round, next 4 in the second round, and so on.
 
 
Sample Allocation Scheme 
 
For each domain, a total of 4 sample replicates will be allotted for each survey round.  However, the total number of sample SSUs will be allotted proportionately to the measure of size of the PSU.  Thus, a PSU with only 100 HHs would have less number of sample HHs than PSUs with 400 HHs but on the average there will be 12 sample HHs allotted for each PSUs in Highly Urbanized Cities (HUCs) and an average of 16 sample HHs for every PSUs in province domains. 
 
A total national sample of 42,768 sample HHs (rounds with Batanes sample) or 42,576 sample HHs (rounds without Batanes sample) will be allotted per survey round. 
 
Estimation Procedure

Base weight Computation
 
The base weight is computed as the inverse of selection Probability
 
Where:
 
A – total number of PSUs in the domain
a -  number of sample PSUs in the domain
 
 
For housing units with at most 3 households the base weight is computed as:
 
 
For housing units with more than 3 households the base weight is computed as:
 
Where:
 
 
Estimation of Total
 
Regional Total
 
 
Where:
 
 
Provincial/HUC Total
 
 
Where
 
 
Replicate Total
 
 
Thus, the provincial/HUC total can be also expressed as
 
 
Estimation of Variance
 
Replicate Total
 
Where:
 
 
Provincial/HUC Total
 
 
Base Weight Adjustment
 
Base weight will be adjusted to take into account cases of unit non-response.  Further adjustment will be made also so that the final weighted estimates will conform to the known population count/value.
 
Enhancement of Estimation Procedure
 
Enhancements were made to simplify estimation of totals and variance and for a more user-friendly microdata file.  In this process, the four replicates are merged into one set of sample for the province/HUC to get rid of the individual estimation of replicate totals and variances. 
 
Base Weight
 
 
Estimation of Total and Rates
 
 
Rates will be computed as for example employment rate
 
Base Weight Adjustment
 
The base weight will be adjusted for unit non-response using weighting class adjustment as adjustment factor.  The adjustment will be made within province/HUC using the following adjustment factor:
 
 
* - using base weight
 
The non-response adjustment is the product of the base weight and the adjustment factor, that is, 
 
 
Further adjustment will still be made by calibration to conform to known population counts/values.
 
For example, the 10-year interval age group and sex distribution from projected population by provinces is given in this table:
 
The population adjustment factor by class (age group-sex category) is:
 
 
The final weight or the calibrated weight is the product of non-response adjusted weight and the population adjustment factor, that is,
 
Estimation of Variance
 
Estimator of Variance at the regional level
 
Treating the provinces/HUCs as strata within the region, the estimate of the regional total variance is,
 
Estimator of variance of rates
 
Taylor Series Linearization Method will be used 
 

Where

Model-Assisted Variance

Instead of purely design-based variance, model-assisted variance will be used

Calibration improves efficiency and GREG is asymptotically unbiased.

3.2 Method of Collection
 
Computer Aided Personal Interviewing using Tablet was deemed most applicable for the LFS owing to the complexity of the questionnaire, the details required, and the level of education of respondent in sample households.
 
PSA Statistical Coordination Officers (SCOs) and Statistical Researchers (SRs) served as interviewers during the operations.  Supervision and monitoring of survey operations were done by the Regional Directors (RDs)/Provincial Statistics Officers (PSOs) of PSA.
 
3.3 Questionnaire Design
 
The items of information presented in this report were derived from a structured questionnaire covering demographic and economic characteristics of individuals.  Refer to Appendix B for detailed information on the items included.  This was then translated into electronic format using Computer Aided Data Collection System (CADaCS).
 
3.4 Data Processing
 
Enumeration was a very complex operation and it may happen that accomplished electronic questionnaires may have some omissions and implausible or inconsistent entries.  Editing was meant to correct these errors. 
 
For purposes of operational convenience, field editing was done.  The interviewers were required to review the entries at the end of each interview.  Blank items, which were applicable to the respondents, were verified and filled out.  Also, applicable code for each item should be properly entered.  Before being transmitted to the regional office, all electronic questionnaires were edited in the field offices.
 
Machine processing involved all operations that were done with the use of a computer and/or its accessories, that is, from completeness check to tabulation. 
 
Machine editing was preferred to ensure correctness of encoded information. Errors done during data gathering were identified using a consistency check computer program and were given necessary corrections as per verification of the field offices. 
 
Preliminary and final tabulations were done at the Central Office. 
 
3.5 Publication of Results
 
Published in this report are data on labor force which provide details for analytical use at the regional and national levels.  Unpublished figures for more detailed cross- classification can be obtained from the Income and Employment Statistics Division, Social Sector Statistics Service, PSA.
 

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