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Economic activity

Concepts and definitions
A.
Economically active population (paras. 2.165-2.200)
1.
Usually active population
2.
Currently active population, or labour force
 
i.
Employed population
 
ii.
Unemployed population
B.
Population not economically active (paras. 2.201-2.208)
1.
Population not usually active
2.
Population not currently active (in other words, population not in the labour force)
C.
Time worked (paras. 2.209-2.211)
D.
Occupation (paras. 2.212-2.220)
E.
Industry (paras. 2.221-2.225)
F.
Status in employment (paras. 2.226-2.235)
G.
Income (paras. 2.236-2.238)
H.
Institutional sector of employment (paras. 2.239-2.244)
I.
Place of work (paras. 2.245-2.247)
   
 

A. Economically active population (paras. 2.165-2.200)

The economically active population comprises all persons of either sex who provide or are available to provide the supply of labour for the production of economic goods and services, as defined by the System of National Accounts (SNA), during a specified time reference period. Activities are within the production boundary defined by the SNA1 if they comprise (a) production of goods or services supplied or intended to be supplied for sale in the market; (b) own-account production of all goods retained by their producers; and (c) own-account production of housing services by owner-occupiers and of domestic and personal services produced by paid domestic staff. Own-account production of goods and services includes for example, production of agricultural products and their subsequent storage; production of other primary products such as mining of salt, cutting of peat, supply of water; processing of agricultural products; and other kinds of processing such as weaving of cloth, dressmaking and tailoring; production of footwear, pottery, utensils or durables; making of furniture or furnishings; and major renovations, extensions to dwellings, replastering of walls or re-roofing by owners of owner-occupied dwellings.2

Domestic or personal services provided by unpaid household members for final consumption within the same household are excluded from the production boundary and hence are not considered to be economic activities. (Examples are (a) the cleaning, decoration and maintenance of the dwelling occupied by the household, including small repairs of a kind usually carried out by tenants as well as owners; (b) the cleaning, servicing and repair of household durables or other goods, including vehicles used for household purposes; (c) the preparation and serving of meals; (d) the care, training and instruction of children; (e) the care of sick, infirm or old people; and (f) the transportation of members of the household or their goods.)

The economically active population can be measured in many different ways, and the 1982 recommendations of ILO include, in particular, two useful ways of measuring the economically active population. One approach uses the usually active population, measured in relation to a long reference period such as a year, and the other uses the currently active population or, equivalently, the labour force, measured in relation to a short reference period such as one week or one day.

The "current activity" measure is the one used as the basis for international comparisons of the economically active population, employment and unemployment.

A.1 Usually active population

The usually active population comprises all persons above a specified age whose activity status, as determined in terms of the total number of weeks or days during a long specified period (such as the preceding 12 months or the preceding calendar year) was either “employed” or “unemployed”, as defined below.

A.2 Currently active population, or labour force

The currently active population, or the labour force, comprises all persons above a specified age, whose activity status based on a brief reference period such as one week was either employed or unemployed, as defined in the paragraphs that follow.

A.2.i Employed population

The employed comprise all persons above a specified age who, during a short reference period of either one week or one day, were in one of the following categories:

  (a) Paid employment:
    (i)
At work: persons who during the reference period performed some work for wage or salary, in cash or in kind;
    (ii)
With a job but not at work: persons who, having already worked in their present job, were temporarily not at work during the reference period and had a formal attachment to their job as evidenced by, for example, a continued receipt of wage/salary, an assurance of return to work following the end of the contingency, an agreement on the date of return following the short duration of absence from the job, and so on;
     
  (b) Self-employment:
    (i)
At work: persons who during the reference period performed some work for profit or family gain, in cash or in kind;
    (ii)
With an enterprise but not at work: persons with an enterprise, which may be a business enterprise, a farm or a service undertaking, who were temporarily not at work during the reference period for some specific reason.

According to the present international recommendations, the notion of some work should be interpreted as work for at least one hour during the reference period.

A.2.i Unemployed population

The unemployed comprise all persons above a specified age who during the reference period were:

(a)
Without work, in other words, not in paid employment or self-employment, as defined above;
(b)
Currently available for work, in other words, were available for paid employment or self-employment during the reference period;
(c)
Seeking work, in other words, took specific steps in a specified recent period to seek paid employment or self-employment. The specific steps may have included registration at a public or private employment exchange; application to employers; checking at worksites, farms, factory gates, markets or other places of assembly; placing or answering newspaper advertisements; seeking assistance of friends and relatives; looking for land, building, machinery or equipment to establish one’s own enterprise; arranging for financial resources; applying for permits and licences, and so forth. It would be useful to distinguish first-time job-seekers from other job-seekers in the classification of the unemployed.

In general, to be classified as unemployed, a person must satisfy all three of the above criteria. However, in situations where the conventional means of seeking work are of limited relevance, where the labour market is largely unorganized or of limited scope, where labour absorption is, at the time, inadequate, or where the labour force is largely self-employed, the standard definition of unemployment may be applied by relaxing the criterion of seeking work. Such a relaxation is aimed primarily at those developing countries where the criterion does not capture the extent of unemployment in its totality. With this relaxation of the criterion of seeking work, which permits in extreme cases the criterion’s complete suppression, the two basic criteria that remain applicable are “without work” and “currently available for work”.

B. Population not economically active (paras. 2.201-2.208)

The population not economically active comprises all persons, irrespective of age, including those below the age specified for measuring the economically active population, other than those classified as economically active.

B.1 Population not usually active

The population not usually active comprises all persons not classified either as employed or as unemployed. It includes the following four groups:

(a)
Students: persons of either sex, not classified as usually economically active, who attended any regular educational institution, public or private, for systematic instruction at any level of education;
(b)
Homemakers: persons of either sex, not classified as usually economically active, who were engaged in household duties in their own home, for example, housewives and other relatives responsible for the care of the home and children (domestic employees, working for pay, however, are classified as economically active;
(c)
Pension or capital income recipients: persons of either sex, not classified as usually economically active, who receive income from property or investments, interests, rents, royalties or pensions from former activities, and who cannot be classified as students or homemakers;
(d)
Others: persons of either sex, not classified as usually economically active, who are receiving public aid or private support, and all other persons not falling into any of the above categories.

B.2 Population not currently active (not in the labor force)

The population not currently active or, equivalently, persons not in the labour force, comprises all persons who were neither employed nor unemployed during the short reference period used to measure current activity. It includes

(a)
persons in attendance at educational institutions,
(b)
persons engaged in household duties,
(c)
persons in retirement, old age and so forth and
(d)
persons inactive for other reasons, including disability.

 

The term “attendence at an educational institution” refers to attendance at any regular educational institution, public or private, for systematic instruction at any level of education, or temporary absence for relevant reasons corresponding to those specified for persons temporarily not at work. The term “engaged in household duties” refers to engagement in household duties in one's own home. Domestic servants working for pay in somebody else's home are to be classified as economically active.

C. Time worked (paras. 2.209-2.211)

Time worked is the total time actually spent producing goods and services, within regular working hours and as overtime, during the reference period adopted for economic activity in the census. If the reference period is short, for example, the week preceding the census, time worked should be measured in hours. If the reference period is long, for example, the 12 months preceding the census, time worked should be measured in units of weeks, or in days where feasible. Time worked also includes time spent in activities that, while not leading directly to produced goods or services, are still defined as part of the tasks and duties of the job, such as preparing, repairing or maintaining the workplace or work instruments. In practice, it will also include inactive time spent in the course of performing these activities, such as time spent waiting or standing by, and in other short breaks. Longer meal breaks and time spent not working because of vacation, holidays, sickness or conflicts (for example, strikes and lockouts) are excluded.

D. Occupation (paras. 2.212-2.220)

Occupation refers to the type of work done during the time-reference period by the person employed (or the type of work done previously, if the person is unemployed), irrespective of the industry or the status in employment in which the person should be classified. For purposes of international comparisons, countries classify occupations in accordance with the latest revision available of the International Standard Classification of Occupations (ISCO).

E. Industry (paras. 2.221-2.225)

Industry refers to the activity of the establishment in which an employed person worked during the time-reference period established for data on economic characteristics (or last worked, if unemployed). For purposes of international comparisons, countries classify the industrial characteristics of active persons according to the most recent revision of the International Standard Industrial Classification of All Economic Activities (ISIC).

F. Status in employment (paras. 2.226-2.235)

Status in employment refers to the status of an economically active person with respect to his or her employment, that is to say, the type of explicit or implicit contract of employment with other persons or organizations that the person has in his/her job. The basic criteria used to define the groups of the classification are the type of economic risk, an element of which is the strength of the attachment between the person and the job, and the type of authority over establishments and other workers that the person has or will have in the job. Care should be taken to ensure that an economically active person is classified by status in employment on the basis of the same job(s) as used for classifying the person by "occupation", "industry" and "sector".

The International Classification of Status in Employment (ICSC) classifies the economically active population by status in employment as follows:

(a)
Employees, among whom it may be possible to distinguish between employees with stable contracts (including regular employees) and other employees;
(b)
Employers;
(c)
Own-account workers;
(d)
Contributing family workers;
(e)
Members of producers' co-operatives;
(f)
Persons not classifiable by status.

G. Income (paras. 2.236-2.238)

In light of the conceptual underpinning for the new international standards concerning the economically active population, income may be defined in terms of

  (a)
monthly income in cash and/or in kind from the work performed by each active person or
  (b) the total annual income in cash and/or in kind of households regardless of source.

The income from employment of economically active persons includes wages and salaries of employees, income of members from producers' cooperatives and the entrepreneurial income of employers and own-account workers operating business and unincorporated enterprises. In addition to the income from employment of its economically active members, the total income of the household includes, for example, the interest, dividends, rent, social security benefits, pensions and life insurance annuity benefits of all its members.

H. Institutional sector of employment (paras. 2.239-2.244)

The Institutional sector of employment relates to the legal organization and principal functions, behaviour and objectives of the enterprise with which a job is associated. Following the definitions provided in the System of National Accounts (SNA) the following institutional sectors may be distinguished:

  (a)

Corporation, comprising non-financial and financial corporations (in other words incorporated enterprises, private and public companies, joint-stock companies, limited liability companies, registered cooperatives, limited liability partnerships, and so forth) and quasi-corporations, as well as non-profit institutions, such as hospitals, schools and colleges, that charge fees to cover their current production costs;

  (b)
General government, comprising central, state and local government units together with social security funds imposed or controlled by those units, and non-profit institutions engaged in non-market production controlled and financed by government, or by social security funds;
  (c)
Non-profit institutions serving households comprising units engaged in the production of non-market goods and services for households and whose main resources are from voluntary contributions;
  (d)
Households (including unincorporated enterprises owned by households) comprising unincorporated enterprises directly owned and controlled by members of private and
institutional households (made up of persons staying in hospitals, retirement homes, convents, prisons and so forth, for long periods of time), either individually or in partnership with others. Partners may be members of the same household or from different households.

I. Place of work (paras. 2.245-2.247)

Place of work is the location in which a currently employed person performed his or her job, and where a usually employed person performed the primary job used to determine his/her other economic characteristics such as occupation, industry, and status in employment.

Place of work may have the following response categories, or a variation thereof necessitated by national circumstances:

  (a)
Work at home: in addition to those whose economic activities are conducted from units or offices within the home, this category includes farmers who work and live on their farms, persons working and living at work camps, and those engaged in own-account production of goods;
  (b)
No fixed place of work: this category should be restricted to persons whose work involves travel in different areas and who do not report daily in person to a fixed address, for example, itinerant traders or hawkers, travelling salesmen and long-distance lorry drivers;
  (c)

With a fixed place of work outside the home: this category includes the remaining employed population. Also included in this group are persons who do not have a fixed place of work but who report to a fixed address at the beginning of their work period (for example, bus drivers, airline pilots and stewards), and individuals who travel to work, on a regular basis, across the border to a neighbouring country.

Notes:

1 Commission of the European Communities, International Monetary Fund, Organisation for Economic Cooperation and Development, United Nations and World Bank, System of National Accounts 1993 (United Nations publication, Sales No. E.94.XVII.4), para. 6.18.

2 Ibid., paras. 6.24 and 6.25.

United Nations Statistics Division - Demographic and Social Statistics