LABOR FORCE INDICATORS OF THE PHILIPPINES1 Janice R.

Ybaez2

I.

INTRODUCTION

1.1 General Background In the Philippines, labor force data are derived from the Labor Force Survey (LFS) conducted quarterly on a nationwide sample basis by the National Statistics Office as a module of the Integrated Survey of Households (ISH). The current ISH series started as a household survey series under the Philippine Statistical Survey of Households (PSSH) in 1956 as a joint project of the Philippine Government and the United States Government through its International Cooperation Agency (ICA), now known as USAID. The first household survey conducted under PSSH was in May 1956. This was followed by the surveys in October 1956, March, May and October 1957. There was only one survey round conducted for the years 1958 to 1961 while the surveys were undertaken twice a year from 1962 to 1969. Beginning 1971, the LFS was undertaken quarterly and the biggest change occurred on the reference period; a change from past week to past quarter reference period. In 1987, there was a decision by the National Statistical Coordination Board that the reference period for employment statistics be reverted back to the past week. The last series of the past quarter reference period was for the first quarter of 1987. However, to continue the past quarter series and to provide a link with the past week series, it was also decided that the third quarter round be devoted to gather the employment status of the labor force using the past quarter as reference together with the regular LFS using the past week as the reference period. 1.2 Objectives of the Survey The Labor Force Survey (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, including provinces and key cities.

Paper presented in the Joint OECD/ESCAP Workshop on Key Economic Indicators held on May 22-25, 2000 in Bangkok, Thailand Statistician IV, National Statistics Office, Philippines.

1.3 Scope and Coverage The current LFS uses the new sampling design constructed from the listings of the 1995 Census of Population (POPCEN). The survey covers 41,000 household deemed sufficient to provide more precise and reliable estimates at the provincial/key city levels. The survey involves the collection of data on demographic and socio-economic characteristics of the population in general. The reporting unit is the household which means that the statistics emanating from this survey refers to the characteristics of the population residing in the private households. Persons who belong to the institutional population are not within the scope of the survey.

II.

SURVEY DESIGN

2.1 Sampling Design The sampling design of the Labor Force Survey uses the new master sample design starting July 1996. The development of the master sample aimed to meet the demand for an expanded scope and coverage of household surveys. It is also envisioned to address the need for more reliable estimates at detailed levels of data disaggregation as well as to optimize the limited resources available. The multi-stage sampling design of the master sample consists of an expanded sample that provides reliable estimates at provincial level and a core sample that provides reliable estimates at the regional level. The expanded sample consists of 3,416 barangays/EAs while the core sample which is a subsample of the expanded sample consists of 2,247 barangays/EAs. 2.1.1 Domains The urban and rural areas of cities and municipalities with a population 150,000 or more are considered as separate domains. The urban and rural areas of each of the 77 provinces are likewise treated as domains. The current survey covers 77 provinces, 30 cities and 20 key municipalities. 2.1.2 Sampling Frame The frames for the first and second stages of sample selection were based mainly on the results of the 1995 (POPCEN). The 1995 POPCEN list of barangays with the household and population counts is used in the first stage sample selection. Information needed for the explicit and implicit stratification of

barangays included in the frame, however, are based on the 1990 Census of Population and Housing and other administrative reports from field offices of NSO. The enumeration areas which constitute the secondary stage sampling units are those that were formed during the 1995 POPCEN. Isolated barangays and/or barangays that are difficult and expensive to reach are excluded from the sampling frame. However, critical areas or barangays with peace and order problem that is generally temporary in nature are included in the frame. The frame for the third stage sample selection is the list of households from the 1995 POPCEN. 2.1.3 Stratification Scheme Barangays in each domain were explicitly stratified into urban or rural. The barangay is the smallest political subdivision in the country and is considered as the basic geographic enumeration area in the LFS. Within the urban/rural barangay stratum in each of the provincial domains, the barangays were implicitly stratified by municipal district, serpentine ordering of municipalities, and grouping of the barangay based on accessibility. The implicit stratification ensured better geographic coverage of the sample. 2.1.4 Sample Selection The multi-stage sampling design of the master sample involves the selection of the sample barangays for the first stage, selection of sample enumeration areas or EAs for the second stage, and the selection of sample households for the third stage in each stratum for every domain. The sample barangays were selected systematically with probability proportional to size from the list of barangays that were implicitly stratified. The preliminary count of households based on the results of the 1995 POPCEN was used. The selection of sample EAs for the second stage was also done systematically with probability proportional to size. The EAs are those that were formed during the 1995 POPCEN. An EA is a physical delineated portion of the barangay. For barangays that were not divided into EAs, the barangay was treated as an EA.

2.1.5

Sample Size The new master sample consists of an expanded sample of 3,416 sample barangays/EAs (2,045 urban and 1,371 rural) and a core sample of 2,247 sample barangays/EAs. The number of sample households per sample barangay/EA for both the urban and rural areas is fixed at 12 which is considered optimum. At present, there are about 41,000 sample households covered by the LFS.

2.2 Questionnaire Design The LFS questionnaire is a structured questionnaire covering demographic and economic characteristics of individuals. The questionnaire covers the following topics:
A.

Demographic Characteristics Sex Age Whether head of household or non-head Marital status Highest grade completed

C. Unemployed Persons Whether available for work or not Whether looking for work or not Job search method Number of weeks looking for work Reason for not looking for work

B. Employed Persons Usual occupation Primary occupation Kind of industry Class of worker Nature of employment Normal working hours per day Total hours worked in a week Whether wanting more hours of work or not

2.3 Method of Collection Personal interview is used as a means for gathering information asked for in the questionnaire. NSO Statistical Coordination Officers and Statistical Researches serve as interviewers during the operations. Supervision and monitoring of survey operations are done by the Regional Directors/Provincial Statistics Officers of NSO, most of

whom have experience and have undergone training on various types of surveys and censuses. 2.4 Data Processing A decentralized data processing is adopted for the LFS. This means that the field offices have the major responsibility of doing manual processing and machine processing of the LFS returns in their respective jurisdictions. Data processing involves two stages: manual processing and machine processing. Manual processing refers to the manual editing and coding of questionnaires. This is done prior to machine processing which entails code validation, consistency checks as well as tabulation. Enumeration is a very complex operation and oftentimes it happens that accomplished questionnaire have some omissions and implausible or inconsistent entries. Editing is meant to correct these errors. For purposes of operational convenience, field editing is usually done. The interviewers are required to review the entries at the end of each interview. Blank items which are applicable to the respondents are verified and filled out. Before being transmitted to the central office, all questionnaires are edited in the field offices. Coding, encoding, completeness checking and verification of geographic identification are done in the field offices. Preliminary tabulations and clean data files (in diskettes) for each region are transmitted to the Central Office for further processing and consolidation.

III.

CONCEPTS, DEFINITIONS AND EXPLANATIONS

3.1 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. 3.2 Work Work means something a person does during the past week, for pay in cash or in kind, in any establishment, office, farm, private home or for profit or without pay on a family farm or enterprise. In addition to the above, any activity that a person does during the past week in relation to minor activities in home gardening, raising of crops, fruits, poultry, etc., fishing for home consumption and manufacturing for own use are also considered work. However, there must be some harvests 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 in order that these activities will be considered work.

3.3 In the Labor Force This refers to population 15 years old and over who are either employed or unemployed in accordance with the definitions described below. 3.4 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 job but not at work. Those who have a job or business but are not at work because of temporary illness/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 enumerators visit, are considered employed. 3.5 Underemployed. Underemployed persons included 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. 3.6 Unemployed. Unemployed persons include all those who, during the reference period are 15 years old and over as of their last birthday who have no job/business and actively looking for work. Also considered as unemployed are persons without a job or business who are reported not looking for work because of their belief that no work was available or because of temporary illness/disability, bad weather, pending job application or waiting for job interview. 3.7 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 those persons who are not looking for work because of reasons such housekeeping, schooling, etc. Examples are housewives, students, disabled or retired persons.

3.8 Determination of Employment Status. The employment status of person 15 years old and over is determined on the basis of answers to a series of interrelated 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 the survey means that a person reported to his place of work or performed his duties/activities for at least one hour during the reference week. If a person reported that he did some work, not counting chores around the house, he is still considered in the employed category although most of his time was devoted to household chores. All persons not identified by the above question as employed 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 work at all during the past week but may actually have jobs or businesses 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; regular and temporary teachers, excluding substitutes, during summer vacation who still receive pay and who expect 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 at any time during the past week?" This question is asked to determine who among those who had no job/business had really done something to look for work. If a person looked for work, he or she is classified as unemployed, otherwise the next question asked is to determine whether a person 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 is valid in which case the person is unemployed. If the reason specified is schooling, housekeeping, too young/old, or retired/permanent disability or other reasons not considered valid, then the person is excluded from the labor force.

IV.

INDICATORS DERIVED FROM LFS The following indicators are usually derived from the results of the survey. These indicators are used to study the labor structure of the country and to keep track of the behavior of employment, unemployment, and underemployment

4.1 Labor Force Participation Rate (LFPR) Labor Force Participation Rate is the proportion of economically active population (employed + unemployed) to the total working age population multiplied by 100. LFPR = (Employed + Unemployed)/Pop'n. 15 yrs old & over) x 100

4.2 Employment Rate Employment rate is the proportion of the total employed to the total labor force multiplied by 100. Employment Rate = (Total employed/total labor force) x100. 4.3 Unemployment Rate Unemployment Rate = (Total number of unemployed/total labor force) x 100 4.4 Underemployment Rate Underemployment Rate = (Total number of underemployed/total employed) x 100

V.

AVAILABILITY OF RESULTS
Preliminary results of the Labor Force Survey are made available to all media outlets in the form of press release 45 days after the enumeration. The preliminary results include the labor force levels as well its indicators at the national and regional levels. A special release is made available 15 days after the press release.. Labor force information is also published in the form of Integrated Survey of Households Bulletin which is available 2 to 4 months after press release. NSO publications, which contain information on labor force by region, are the Monthly Bulletin of Statistics, Journal of Philippine Statistics and the Philippine Yearbook. More detailed cross classification/tabulation on labor force are available in the form of unpublished tables.

VI. OTHER SOURCES OF EMPLOYMENT AND UNEMPLOYMENT DATA In addition to LFS as a source of employment statistics, these data can also be obtained from the various establishment surveys conducted by the NSO. These two surveys are undertaken independently and therefore no direct link with each other. However, theoretically, the employment data obtained from the establishment surveys are supposed to be a subset of what is obtained from the (LFS), considering that the household survey is supposed to cover all employed persons while establishment surveys cover only employment in the organized sector. Similarly, unemployment statistics, administrative records or reports are also used for determining the magnitude of unemployment in the Philippines. The number of workers displaced due to establishment closure or retrenchment are provided through the establishment termination reports submitted by employers to the Department of Labor and Employment (DOLE).

VII. SPECIAL PROBLEMS Problems to be covered in this paper will only include those that are due to the limitation of the LFS design and those that are of administrative in nature. Among the problems identified are the following: a) The present design of the questionnaire does not address the current demand for labor force statistics that will accurately capture the dynamics and movements in and out of the labor market. b) Some of the concepts adopted in the LFS do not conform to the ILO resolutions on labor force and inconsistent with the System of National Accounts (SNA). In order to address the above problems, there should be a study focusing on the operational definitions of 1) work for profit category; 2) employment status of those absent from work for pay or self-employment; 3) unemployment in consideration of including availability criterion; 4) underemployment and its various forms; 5) the expansion of the coverage of the LFS to cover data items on child labor, informal sector, home-based workers, earnings, new entrants, multiple job holders and subcontractors. c) The regular conduct of the survey and timely release of publications have always been affected by the insufficient budget allocated by the government for this specific survey.