Statistics on work relationships - ILO (PDF)

MEPICLS/2018 Statistics on work relationships Report for discussion at the Meeting of Experts on Labour Statistics in Preparation for the 20th International Conference of Labour Statisticians (Geneva, 5–9 February 2018) Department of Statistics Geneva, 2018   MEPICLS/2018 INTERNATIONAL LABOUR ORGANIZATION Department of Statistics Statistics on work relationships Report for discussion at the Meeting of Experts on Labour Statistics in Preparation for the 20th International Conference of Labour Statisticians (Geneva, 5–9 February 2018) Geneva, 2018 INTERNATIONAL LABOUR OFFICE, GENEVA  Copyright © International Labour Organization 2018 First edition 2018 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Licensing), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: [email protected]. The International Labour Office welcomes such applications. Libraries, institutions and other users registered with reproduction rights organizations may make copies in accordance with the licences issued to them for this purpose. Visit www.ilo.org to find the reproduction rights organization in your country. Statistics on work relationships, Report for discussion at the Meeting of Experts on Labour Statistics in Preparation for the 20th International Conference of Labour Statisticians (Geneva, 5–9 February 2018), International Labour Office, Department of Statistics, Geneva, ILO, 2018. ISBN 978-92-2-131546-9 (print) ISBN 978-92-2-131547-6 (Web pdf) Also available in French: Statistiques sur les relations d’emploi, Rapport soumis aux fins de discussion, Réunion d’experts sur les statistiques du travail en préparation de la vingtième Conférence internationale des statisticiens du travail (Genève, 5-9 février 2018), ISBN 978-92-2-231340-2 (print), ISBN 978-92-2-231341-9 (Web pdf), Geneva, 2018; and in Spanish: Estadísticas de las relaciones de trabajo, Reunión de expertos en el marco de los preparativos de la 20.ª Conferencia Internacional de Estadísticos del Trabajo (Ginebra, 5-9 de febrero de 2018), ISBN 978-92-2- 328505-0 (print), ISBN 978-92-2-328506 (Web pdf), Geneva, 2018. ILO Cataloguing in Publication Data The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications and digital products can be obtained through major booksellers and digital distribution platforms, or ordered directly from [email protected]. For more information, visit our website: www.ilo.org/publns or contact [email protected]. Printed by the International Labour Office, Geneva, Switzerland  MEPICLS-R-[STATI-171115-1]-En.docx iii Abbreviations and acronyms EU European Union ICLS International Conference of Labour Statisticians ICSaW International Classification of Status at Work ICSE International Classification of Status in Employment ILO International Labour Organization ISCO International Standard Classification of Occupations ISIC International Standard Industrial Classification of All Economic Activities SNA System of National Accounts UN United Nations   MEPICLS-R-[STATI-171115-1]-En.docx v Contents Page Abbreviations and acronyms............................................................................................................. iii 1. Introduction and background....................................................................................................... 1 Structure of the report ............................................................................................................. 2 Uses of statistics on work relationships .................................................................................. 3 Process of consultation and development of proposals........................................................... 3 Overview of the International Classification of Status in Employment (ICSE-93)................ 4 Impact of the 19th ICLS resolution concerning statistics of work, employment and labour underutilization ................................................................................ 5 The concept of work ..................................................................................................... 6 Forms of work............................................................................................................... 6 Alignment of the framework for work statistics with the System of National Accounts (SNA).............................................................. 7 Issues addressed in the revision of ICSE-93........................................................................... 7 Outline of the proposed new standards ................................................................................... 8 Main differences between the proposed new standards and ICSE-93 ................................... 10 Guidelines for data collection and measurement approach..................................................... 10 2. Conceptual framework for statistics on work relationships ....................................................... 11 Statistical units and work relationships................................................................................... 11 Refinement of the definition of job......................................................................................... 11 Categorization based on authority and economic risk ............................................................ 12 Type of authority .......................................................................................................... 12 Type of economic risk .................................................................................................. 13 Supporting concepts................................................................................................................ 13 Corporations ................................................................................................................. 14 Quasi-corporations........................................................................................................ 14 Households ................................................................................................................... 15 Household market enterprises....................................................................................... 15 Entrepreneurs................................................................................................................ 15 3. Status in employment .................................................................................................................. 16 Summary of differences between ICSE-93 and the proposed ICSE-18................................. 17 Definitions and explanatory notes for categories in the two hierarchies of the International Classification of Status in Employment ................................................. 19 Independent workers..................................................................................................... 19 Dependent contractors .................................................................................................. 20 Employees..................................................................................................................... 21 Contributing family workers......................................................................................... 21  vi MEPICLS-R-[STATI-171115-1]-En.docx 4. International Classification of Status at Work (ICSaW-18)........................................................ 23 Status at work categories and the SNA production boundaries .............................................. 26 5. Cross-cutting variables and categories ........................................................................................ 28 Duration of the job or work activity and hours of work.......................................................... 29 Contract type........................................................................................................................... 29 Domestic workers.................................................................................................................... 29 Multi-party work relationships................................................................................................ 31 6. Data sources and future work ...................................................................................................... 34 Appendix ........................................................................................................................................... 35 Draft 20th International Conference of Labour Statisticians resolution concerning statistics on work relationships..................................................................................................... 35 References ......................................................................................................................................... 55  MEPICLS-R-[STATI-171115-1]-En.docx 1 1. Introduction and background 1. International standards for labour statistics serve two main purposes: to provide up-to-date guidelines for the development of national official statistics on a particular topic; and to promote international comparability of the resulting statistics. Periodic revision and update of these standards are needed to ensure that they adequately reflect new developments in labour markets in countries at different stages of development, and that they incorporate identified best practices and advances in statistical methodology so as to best meet emerging policy concerns. 2. The current international standard for statistics on work relationships is the International Classification of Status in Employment (ICSE-93), adopted in 1993 as a resolution of the 15th International Conference of Labour Statisticians (ICLS). It provides only five substantive categories and defines the widely used distinction between self-employment and paid employment. Its revision was mandated at the 19th ICLS in order to address a wide range of concerns. 3. A central concern is that the five substantive categories defined in ICSE-93 do not provide sufficient information to adequately monitor the changes in employment arrangements that are taking place in many countries and are not sufficiently detailed to monitor various forms of non-standard employment. A variety of new, or non-standard, arrangements that aim to increase flexibility in the labour market are also generating a need for statistical information to monitor the impact of these arrangements on workers and the functioning of the labour market. Many of these arrangements entail the transfer of economic risk from enterprises to workers and are leading to uncertainty about the boundary between self-employment and paid employment. 4. An important focus of work to revise ICSE-93 has therefore been to develop proposals that will support the provision of more comprehensive and internationally comparable statistics on the growth of non-standard forms of employment. Non-standard employment may in some cases be voluntary and have positive outcomes for both workers and employers. In many cases, however, it is associated with job and income insecurity. It may also “pose challenges for enterprises, the overall performance of labour markets and economies as well as societies at large”. 1 5. Non-standard employment refers to employment arrangements that deviate from the “standard employment relationship”, understood as work that is full time, indefinite, formal, and part of a subordinate relationship between an employee and employer. These non- standard employment arrangements include: ■ temporary employment, such as through fixed-term contracts and casual or daily work; ■ part-time and on-call work; and ■ multi-party employment arrangements such as labour hire, dispatch, and brokerage, temporary agency work and subcontracted labour. 6. While the provision of statistics on part-time and on-call work are covered to a large extent through existing standards for the measurement of working time and working time arrangements adopted by the 18th ICLS in 2008, there are no current standards for statistics on the other types of non-standard employment. The 15th ICLS resolution does provide 1 ILO 2016.  2 MEPICLS-R-[STATI-171115-1]-En.docx advice on “the possible statistical treatment of particular groups” including those related to temporary employment, casual work and dependent self-employment. This advice is not formally part of the classification of ICSE-93, however. 7. To address this broad range of concerns this report presents proposals to replace ICSE-93 with a suite of statistical standards and classifications. A central element of these proposals is a revised International Classification of Status in Employment (ICSE-18). It includes ten categories to allow better identification of workers with non-standard employment arrangements including those with fixed-term and with casual and short-term contracts of employment, to address concerns about both the blurring of the boundary between paid employment and self-employment and to measure the growth of dependent self- employment. 8. The need for better statistics on various dimensions of non-standard employment is also provided through a series of cross-cutting variables and categories, which provide more detailed information on the degree of stability and permanence of the work. They cover topics such as duration of contract, multi-party employment arrangements, and job dependent social protection. A new International Classification of Status at Work (ICSaW-18) extends ICSE-18 to cover all forms of work. The proposals are integrated by a conceptual framework for statistics on work relationships which defines the key concepts, variables and classification schemes included in the new standards. 9. These standards are proposed as a resolution concerning statistics on work relationships to be reviewed and amended as necessary and considered for adoption as a resolution of the 20th International Conference of Labour Statisticians. The current draft of this resolution is provided in appendix to this report for consideration by participants in the Meeting of Experts on Labour Statistics in Preparation for the 20th International Conference of Labour Statisticians (Geneva, 5–9 February 2018). Structure of the report 10. In Chapter 1, we present background information on the revision work and the demand for statistics on employment relationships, an outline of the proposed new standards and approach to data collection and an overview of the current relevant standards. The remaining chapters are intended to serve as a guide to the draft resolution. Chapter 2 describes the conceptual framework and model that underpin the proposed classifications and statistical variables included in the new standards. Chapter 3 discusses the proposal for a revised International Classification of Status in Employment, while Chapter 4 covers the proposal for a new ICSaW-18. Chapter 5 is concerned with the proposed cross-cutting variables. Chapter 6 concludes the report by briefly discussing the sections of the resolution dealing with data sources and future work. 11. This present report, together with its appendix, represents a draft of the report and draft resolution to be submitted to the 20th ICLS. The report and draft resolution have been adapted from a more detailed paper on the conceptual framework for statistics on work relationships, which was developed and progressively updated in consultation with the working group. It is proposed to provide an updated version of the conceptual framework paper, as well as guidelines for data collection, as room documents during the 20th ICLS.  MEPICLS-R-[STATI-171115-1]-En.docx 3 Uses of statistics on work relationships 12. Statistics on the relationship between the worker and the economic unit in which, or for which, the person works, including statistics in which jobs are currently classified by status in employment, are used for a wide variety of purposes in both economic and social analysis. They provide information on the nature of the economic risk and authority that the employed population experiences at work, and on the strength and nature of the attachment of workers to the economic unit in which they are employed, and thereby provide an indicator of the prevalence of unstable or insecure employment situations. 13. Changes in status in employment distributions may also reflect the relationship between economic cycles and employment in higher risk, lower income, less secure jobs. For example, an increase in self-employment as a percentage of total employment may occur when workers who lose jobs in paid employment engage in various forms of self- employment. 14. Economic and labour market policy analysts use statistics on status in employment to assess the impact of self-employment and entrepreneurialism on employment and economic growth and to evaluate government policies and proposals related to economic development and job creation. 15. Statistics classified by status in employment are important for the identification of wage employment and its distribution and for the production and analysis of statistics on wages, earnings and labour costs. In some countries they are needed to estimate revenue from social contributions and assist in determining the level of contributions to be paid. 16. In social statistics, status in employment is an important explanatory variable in its own right and is used as an input variable in the production of statistics on informal employment and on the socio-economic status of persons and households. 17. Data classified by status in employment also provide an important input to national accounts. The income derived from employment of employees is treated in the System of National Accounts (SNA) as compensation of employees, whereas the income of the self-employed is treated as mixed income. 18. Reflecting these diverse uses, statistics on employed persons or jobs by status in employment are widely collected in household-based collections such as Labour Force Surveys, social surveys and population censuses as well as in employer surveys. The development and use of a consistent and coherent system of statistical standards for work relationships, including on status in employment, will therefore facilitate more meaningful comparisons of data from different sources (for example, household surveys with employer surveys or administrative sources where coverage may be limited to employees). Process of consultation and development of proposals 19. To assist in the development of proposals to replace ICSE-93, the ILO established a working group comprising producers and users of labour and economic statistics from national government agencies in all regions, intergovernmental agencies, and workers’ and employers’ organizations. This group has met four times from May 2015 to September 2017. To widen the consultation process and obtain feedback on the proposals developed by the working group, the ILO also conducted a series of preparatory regional meetings of labour statisticians, in all regions of the world from late 2016 and throughout 2017. These meetings focused on both relevance to the regional context and technical feasibility of the proposed new standards. Opportunities for testing of the proposals were identified in several countries and testing is ongoing.  4 MEPICLS-R-[STATI-171115-1]-En.docx Overview of the International Classification of Status in Employment (ICSE-93) 20. ICSE-93 classifies jobs with respect to the type of explicit or implicit contract of employment between the job holder and the economic unit in which he or she is employed. The following five substantive categories are specified: ■ Employees ■ Employers ■ Own-account workers ■ Members of producers’ cooperatives ■ Contributing family workers 21. While the self-employed are not defined as a substantive group in ICSE-93, the groups are defined with reference to the distinction between “paid employment jobs” and “self- employment jobs”. The last four groups listed above form the self-employed. The structure of ICSE-93 can thus be represented as follows: ■ Paid employment jobs – Employees ■ Self-employment jobs – Employers – Own-account workers – Contributing family workers – Members of producers’ cooperatives ■ Workers not classifiable by status 22. The final group, “Workers not classifiable by status”, includes “those for whom insufficient relevant information is available and/or who cannot be included in any of the preceding categories”. Since this group does not relate to any observable phenomenon, it is proposed to delete this category from the new standards, and replace it with guidelines on the treatment of missing or insufficient data. 23. The ICSE-93 also provides advice on “ the possible statistical treatment of particular groups” that are relevant for analysis of the changes that are taking place in the labour market and could potentially satisfy some of the unmet needs for statistics. Some of the groups represent subcategories of one of the specific ICSE-93 categories. Others may cut across two or more of these categories. It suggests that according to national requirements, countries may need and be able to distinguish one or more of the groups and may also create other groups. The advice provided covers the following groups: (a) owner-managers of incorporated enterprises; (b) regular employees with fixed-term contracts;  MEPICLS-R-[STATI-171115-1]-En.docx 5 (c) regular employees with contracts without limits of time; (d) workers in precarious employment; (e) casual workers; (f) workers in short-term employment; (g) workers in seasonal employment; (h) outworkers; (i) contractors; (j) workers who hold explicit or implicit contracts of “paid employment” from one organization, but who work at the site of and/or under instructions from a second organization which pays the first organization a fee for their services; (k) work gang (crew) members; (l) employment promotion employees; (m) apprentices or trainees; (n) employers of regular employees; (o) core own-account workers; (p) franchisees; (q) sharecroppers; (r) communal resource exploiters; (s) subsistence workers. 24. These groups are not organized into a coherent classificatory framework, however, and the advice provided in ICSE-93 resolution is not definitive about the treatment of some of the groups. For example, owner-managers of incorporated enterprises and contractors may be classified as employees or as self-employed workers according to national circumstances. As a result, international comparison and analysis of trends related to the mix between paid employment and various categories of self-employment are compromised, since national practices are not consistent. Based on the discussions at the 19th ICLS, the definitions and statistical treatment of several of these groups were identified as issues to be addressed in the review of ICSE-93. Impact of the 19th ICLS resolution concerning statistics of work, employment and labour underutilization 25. The 19th ICLS resolution concerning statistics of work, employment and labour underutilization (19th ICLS resolution 1) adopted in 2013, updated the previous international standards relating to statistics of the economically active population, employment, unemployment and underemployment (13th ICLS, 1982) and related guidelines. It  6 MEPICLS-R-[STATI-171115-1]-En.docx introduced the first international statistical definition of work and a number of features that are particularly relevant for the revision of ICSE-93, including: (a) a more refined concept and definition of employment that focuses on work for pay or profit to serve as the basis for the production of labour force statistics; (b) a comprehensive framework for work statistics that distinguishes between employment and other forms of work, including own-use production work, volunteer work, and unpaid trainee work; (c) operational definitions and guidelines to enable comprehensive measurement of participation and time spent in forms of work other than employment, particularly production of goods for own final use, provision of services for own final use, and volunteer work. 26. The 19th ICLS resolution notes that the standards should serve to facilitate the production of different subsets of work statistics for different purposes as part of an integrated national system that is based on common concepts and definitions. This objective is equally relevant for the new standards that will replace ICSE-93. 27. The specific elements of the 19th ICLS standards that are most relevant to the revision of ICSE-93 are the reference concepts for work statistics, including the definition of work itself, and the definitions of each form of work. The concept of work 28. According to the 19th ICLS, work comprises any activity performed by persons of any sex and age to produce goods or to provide services for use by others or for own use. It excludes activities that do not involve the production of goods or services (for example, begging and stealing), self-care (for example, personal grooming and hygiene) and activities that cannot be performed by another person on one’s own behalf (for example, sleeping, learning and activities for own recreation). Forms of work 29. Five mutually exclusive forms of work are identified for separate measurement. These forms of work are distinguished on the basis of the intended destination of the production (for own final use; or for use by others, i.e. other economic units) and the nature of the transaction (i.e. monetary or non-monetary transactions and transfers), as follows: (a) own-use production work comprising production of goods and services for own final use; (b) employment work comprising work performed for others in exchange for pay or profit; (c) unpaid trainee work comprising work performed for others without pay to acquire workplace experience or skills; (d) volunteer work comprising non-compulsory work performed for others without pay; (e) other work activities. 2 2 “Other work activities” include such activities as unpaid community service and unpaid work by prisoners, when ordered by a court or similar authority, and unpaid military or alternative civilian  MEPICLS-R-[STATI-171115-1]-En.docx 7 Alignment of the framework for work statistics with the System of National Accounts (SNA) 30. The concept of work and the forms of work were aligned with the SNA so as to ensure that all activities within the SNA production boundary could be separately identified and captured in statistics compiled according to the new standards. The 19th ICLS resolution 1 notes that: Own-use production of goods, employment, unpaid trainee work, a part of volunteer work and “other work activities” form the basis for the preparation of national production accounts within the 2008 SNA production boundary. Own-use provision of services and the remaining part of volunteer work complete the national production accounts, that is, beyond the 2008 SNA production boundary but inside the General production boundary. 3 31. The relationship between the forms of work and the production boundaries defined in the SNA is shown in figure 1. All the activities within the SNA production boundary were counted as employment according to the old standards for labour statistics, and were therefore within the scope of ICSE-93. Figure 1. Forms of work and the System of National Accounts 2008 Intended destination of production for own final use for use by others Forms of work Own-use production work Employment (work for pay or profit) Unpaid trainee work Other work activities Volunteer work of services of goods in market and non-market units in households producing goods services Relation to 2008 SNA Activities within the SNA production boundary Activities inside the SNA General production boundary Issues addressed in the revision of ICSE-93 32. Based on the discussions at the 19th ICLS and among members of the working group, the following key issues were identified as the most important to be addressed in revising ICSE-93: (a) the extension of the new statistical standards to cover all forms of work specified in the 19th ICLS resolution and to reflect the narrower definition of employment defined in that standard; (b) the need for an overarching conceptual framework to ensure coherence between the various classifications and variables that might be specified in the new standards and between the various domains of social, labour and economic statistics, and to facilitate the provision of harmonized statistics from different sources and domains; service, which may be treated as a distinct form of work for measurement (such as compulsory work performed without pay others). 3 ILO 2013c.