Audit questions data and independence of labour force survey

Besides pointing out inadequacies, the Royal Audit Authority’s (RAA) report has recommended the labour ministry to bring about changes in the existing process of conducting labour force survey reports (LFSR) for improvement.

The performance audit on employment generation and promotion initiatives, 2017 recommended the ministry to consider objectivity in conducting labour force survey, frequency of survey, reference period, and labour participation rate.

“The ministry should consider the option of obtaining actual and accurate date compared to small sample based date on employment scenario on which the current LFSRs are based,” the reported stated. “The lack of independent survey may raise doubts and undermine the credibility of the survey report even if the information provided in the survey report are actual and accurate.”

The labour force survey aims to provide a quantitative framework for the preparation of plans, programmes and formation of policies affecting the labour market. The 13th nationwide LFSR was published in 2015 where the overall current unemployment rate is reflected as 2.5 percent.

The report stated that the reference period taken to conduct the LFSR is the week preceding the date of the survey interview where a person is considered employed if the person has performed some work for wage or salary among others during the reference period.

The LFSR also considers a person employed if the person has a job or business but is temporarily absent from work and is going to resume work, according to the report.

LFSR defines unemployment as a person belonging to working age group, who during the reference period, did not work even for an hour and had no job or business but was available for and is seeking work.

Despite the survey being conducted scientifically, an independent agency has not conducted the survey, the RAA pointed out. “The very need of independence in reporting the scenario of employment has been defeated by survey being conducted and reported by the labour ministry, the lead implementing agency to tackle unemployment issues in the country.”

The report mentioned that as per the LFSR 2015, the number of unemployed is 8,660 persons. However, as per the records in the job portal system with the ministry, there were 17,135 unemployed persons as of June 30, 2016.

“Such differences in the number of unemployed persons can undermine the credibility, reliability and transparency in the statistics reported,” the report stated. “It would be desirable to conduct surveys more than once every year to capture the actual labour market information and scenario because the labour market doesn’t stay the same throughout the year.”

The report stated that the situation in the labour market is completely different during July and August and towards the beginning of the year due to students completing academic session at the end of the year.

“Considering the social dependency culture we have in our society and the frequency of the survey, the reference period could be revisited,” it said.

However, the ministry officials in their response to the audit authority said that the estimated number of unemployed persons at 8,660 was of December 2015 while the 11,152 from the job portal is as of June 30, 2016. “The comparison on these unemployed numbers from two sources would not be the same since one is an administrative data and the other is a sample survey.”

Yangchen C Rinzin 

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