Background Notes

Purpose

The purpose of this release is to provide a detailed series of monthly unemployment estimates. The release contains both monthly unemployment rates and monthly unemployment volumes. These outputs now replace the seasonally adjusted Standardised Unemployment Rate (SUR) as the definitive measure of monthly unemployment.

Calculation of Monthly Estimates:

The Quarterly National Household Survey (QNHS) provides benchmark estimates of employment and unemployment for each quarter since the beginning of 1998. These quarterly benchmark estimates are then used to compile monthly data using the Proportional Denton method. The main characteristic of this method is that the monthly Live Register series is used as an indicator to disaggregate the quarterly QNHS unemployment series into a monthly series in such a way as to minimise the differences between two consecutive months. It also ensures that the average of three months in a particular calendar quarter is equal to the corresponding QNHS estimate.

For months where the quarterly unemployment data is not yet available, the ratio of the QNHS monthly estimate to the Live Register monthly estimate (i.e. the benchmark to indicator ratio) is forecast forward in order to extrapolate a monthly QNHS estimate. The monthly series is revised each quarter when the latest quarterly data becomes available. This approach adheres to agreed international practice.

Seasonal Adjustment:

To correct for typical seasonal patterns, the data series included have been concurrently seasonally adjusted. This seasonal adjustment is completed by applying the X-12-ARIMA model, developed by the U.S. Census Bureau. In the case of these monthly unemployment estimates, seasonal adjustment is conducted using the indirect approach, where each individual series is independently adjusted. To preserve consistency between the individual and aggregate series, the series for gender, age group and total monthly unemployed are then created from these component series. The series for monthly unemployment rates are likewise created from these component series.

One-Parent Family Payment (OFP)

The One-Parent Family Payment is a social welfare payment for men and women who are younger than 66 and bring up children without the support of a partner and meet certain other criteria. Claimants on this scheme are not counted as part of the Live Register.

From July 2013 new rules came into operation reducing the age limits for the One-Parent Family Payment. This means that some people no longer qualify for the payment and may avail of other schemes or supports.

As a consequence, approximately 2,800 people in July 2015 previously receiving the One-Parent Family Payment, made a claim for Jobseekers Allowance (JA) and are therefore included in the Live Register figures which are used to extrapolate a monthly QNHS estimate as the quarterly unemployment data is not yet available. It can be noted that the inclusion of these additional persons in July 2015 has a marginal impact on the production of the estimated monthly unemployment volume and rate.

Additional Background Information:

Further information regarding the QNHS and Live Register series are available from each respective release.