Labour market flows

The purpose of this report is to describe transitions between the three labour market statuses employed, unemployed and inactive. These flow figures represent the number of people moving from one category to another during a period of time. The traditional labour market statistics on the other hand, presents the number of people in each category at one point in time.

The analysis is based on the Labour Force Survey (LFS). However, when analyzing advantages and disadvantages using the LFS, we also use register-based labour market statistics.

In general, the figures for labour market flows are much larger than when we compare the stocks between two points in time. The number of people changing status to or from unemployment is particularly large. According to the LFS, a total of 88.000 people were unemployed in 4th quarter 2013. At the same time, the LFS showed an inflow to unemployment of 56.000 people from 4th quarter 2012, and an outflow of 60.000 people, while only 19.000 were unemployed at both points in time. The movements into and out of employment were also large, with an inflow of 179.000 and an outflow of 171.000 people during the same period. However, of the total number of employed people, the vast majority were employed at both points in time.

The LFS is a sample survey covering about 24.000 people. Since each individual participate in 8 consecutive quarters, the labour market transitions can both be measured between two consecutive quarters and between the same quarters in two consecutive years. In this report we have mainly focused on the latter. There are two main elements of uncertainty when using the LFS as a source for labour market flows. One is connected to the sample. From one year to another, half of the sample participates at both points in time. The other problem is that the LFS does not cover changes in the population, i.e. people moving into and out of the group of residents in Norway between 15 to 74 years. As a result, the number of people moving into and out of the different labour market statuses does not necessarily add up to the stock change between two points in time.

The number of employees based on the register-based employment statistics showed an increase of 30.000 people from November 2012 to November 2013. The increase was a result of a population change of 18.000 people, and 12.000 more people moving into than out of employment.

Since register-data cover population changes, consistency between stock changes and flow figures is obtained. This could imply that the registers are a better source for flow statistics compared to the LFS. On the other hand, the registers do not measure unemployment according to international recommendations. Besides, the LFS is used internationally, and there is ongoing work in the EU on how to measure labour market flows based on the LFS. In Norway, we will for national purposes to a large extent use register-data to make flow statistics.