Understanding statistics on employment, unemployment and earnings

A lot of information is available on the state of the UK labour market – numbers and rates of people employed and unemployed, the types of employment undertaken, average earnings, and so on.

This briefing explains the meaning of different concepts and identifies the key measures and sources to use. It also addresses some common misunderstandings and areas where the statistics need to be interpreted with particular care.

It includes information on 

• Labour market status
• Labour market surveys
• Employment by sector and industry
• Under employment and zero-hours contracts
• Unemployment and the claimant count
• Earnings

Labour market status

All people aged 16 and over may be classified to one of three labour market groups: employment, unemployment or economic inactivity. People aged under 16 are not included in labour market statistics.

• A person is counted as employed if they did any paid work in a given week. This includes those who were:
  • temporarily away from work
  • doing unpaid work for their own or a family member’s business
  • on government-supported training and employment programmes and engaging in any form of work, work experience or work-related training.
• Someone is unemployed if they are not in work but are looking for work (having done so at some point during the past four weeks) and are available to start work in the next fortnight.
• A person who is neither employed nor unemployed is economically inactive. This means that they are not in paid work, and are not looking for work. This may be because someone is retired, looking after family or home, or a student, among other reasons.

Together, those in employment and those who are unemployed comprise the group of people who are economically active.