Thursday, May 11, 2006

Dole down - unemployment up 2

December 2005 Unemployment benefit = 51,426 Official unemployment rate = 3.6%
March 2006 Unemployment benefit = 44,549 Official unemployment rate = 3.9%

Hypothesis;

- the anomaly is caused by the lag between becoming unemployed and going on the dole
- the unemployed are on other benefits
- people went off the dole for reasons other than becoming employed eg went to Aussie
- the figures are wrong

11 comments:

Swimming said...

could it be that students who didnt re enrol in wanangas ended up back on the benefit, while others got jobs, influencing the increase in both figures?

Lindsay Mitchell said...

Dave, the dole figures decreased.

Anonymous said...

In the HLFS Labour force participation has increased 0.6% in the last quarter. This may have increased the number of unemployed.

The HLFS has unemployment at 86,000 - Almost double those on unemployment benefit.

The definitions of employed, unemployed and not in the labour force in the HLFS are quite important here. It is a survey designed to measure the utilisation of the labour resource in the economy, rather than who meets the criteria for a benefit, so comparing figures like this will often result in unusual result (like those you have pointed out).

Swimming said...

sorry, i meant the increase in the uynemployment rate.. and when I meant "the benefit" I didnt just mean the dole.
I wouldnt be surprised if many students went straight on to the DBP or sickness benefit claiming depression.

Do you know if the umemployment benefit figures inlclude those on a "training benefit"?

Lindsay Mitchell said...

Dave, no. They only include unemployment hardship (but not unemployment hardship student)

Swimming said...

Ah, thought so. Anyone know how many are on training benefits, as that could contribute to the dole decrease.

sagenz said...

the numerator and the denominator have both changed. if the labour force is larger and unemployed reduce you get what happened. no conspiracy here.

Lindsay Mitchell said...

Sorry Sagenz, You've lost me. The labour force grew but not as quickly as the number of unemployed. My point is, using the unemployment benefit drop as a measure of success is problematic and misleading. They aren't directly connected.

Anonymous said...

stuart is on the money. the rest of you are allowing ideology to cloud your thinking.

Lindsay Mitchell said...

Yes Stuart is right. I did a post about how the HLFS works http://lindsaymitchell.blogspot.
com/2006/02/unemployment-rate.
html here. (I've participated in the survey).

Because more people have been defined as "unemployed", ie available for and actively seeking work, the official rate has gone up.

(But Stats have recently made a change in how they are recording the information which has affected the outcome slightly as well. They experienced a "blip".)

Anyway, this morning I see the unemployment rise described in a headline "Dole queue grows as job numbers rise".

Well, that's wrong. The dole queue didn't grow.

There are three ways of measuring unemployment and the politician will always use the one that best suits his purpose. That's what I want people to be aware of.

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