5-6 October 2016 BECH Building Luxembourg

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1 EUROPEAN COMMISSION EUROSTAT Directorate F: Social statistics Unit F-3: Labour market and lifelong learning Doc.: Eurostat/F3/LAMAS/53/16 WORKING GROUP LABOUR MARKET STATISTICS Item 4.5 of the agenda New strategy for annual JVS 5-6 October 2016 BECH Building Luxembourg

2 1. PURPOSE OF THIS DOCUMENT The purpose of this document is: (1) to inform LAMAS of the shortcomings of the current annual JVS data collection and (2) to propose to discontinue this data collection while encouraging countries to transmit the same breakdowns through at least one quarterly transmission per year. 2. BACKGROUND Eurostat collects job vacancy statistics at both quarterly and annual frequencies. Whereas the quarterly data collection is regulated by EU legislation, annual data are transmitted on a gentlemen s agreement basis. Quarterly data on the number of job vacancies and occupied posts are collected for enterprises with 1 employee or more and all NACE sections B to S. Whereas quarterly JVS data are a Principal European Economic Indicator which, as a leading variable, contributes to the identification and analysis of business cycles, annual data were meant to provide structural information by region and occupation. In practice however, few Member States deliver annual job vacancy data as illustrated in the table below: Table 1

3 As already pointed out in document 4.1 presented at the LAMAS-LMI meeting of January 2016, it can be concluded that the overall data coverage is not satisfactory: only 9 countries transmit data both by ISCO and by NUTS (I or II) whereas three more transmit either some regional breakdown (3 countries) or some ISCO detail (PT). At the LAMAS-LMI meeting, only one country, namely Malta, committed to extend its data coverage to ISCO and NUTS in the annual data collection. Belgium, Denmark France, Ireland, Italy, Luxembourg, the Netherlands and the UK informed that they did not plan to provide additional breakdowns for the annual data collection among others because it would require increasing the sample size and the reporting burden. Indeed, most countries do not have a dedicated annual survey but rather a quarterly questionnaire that include variables on occupations and regions. The double transmission of (EU-regulated) quarterly data and (not regulated) annual results is not optimal. Users consulting annual data are disappointed by the low country coverage that hampers cross-country analyses. On the ESS side, this double data collection creates additional burden with e.g. a double production chain being maintained by Eurostat. 3. ELEMENTS FOR A NEW STRATEGY Job vacancy statistics will remain the main source of information on the demand side of the labour market as also highlighted in the report of the European Statistical Advisory Committee (ESAC) on data gaps in labour market statistics 1. As regards quarterly data, Eurostat is working towards swifter transmission and validation of JVS data by moving to the SDMX standards for both data collection and dissemination. There are also short-term plans to publish quarterly data by NACE section and, when all countries cover the whole economy, to publish the number of vacancies and occupied posts alongside the job vacancy rate 2. From the above analysis, it can be concluded that most Member States have decided not to invest on annual surveys that would provide results by ISCO and NUTS as currently collected by Eurostat on an optional basis. Moreover, it might not be opportune to invest 1 Statement on data gaps in labour market statistics of 25 September 2015: 2c66eb-89f5-4eef-8c8e-504fef7e See the draft report to the European Parliament and to the Council: 2

4 in such annual surveys that are both costly and burdensome at a moment when new techniques become available. Importance of JVS data by occupation and region On the other hand, to understand the functioning of labour markets and to reduce skill mismatches and unemployment (and its duration), institutional users such as DG EMPL of the Commission need detailed information on both the demand and the supply sides. The need for such detailed data on labour demand is fully attested in the context of the Europe 2020 growth strategy and in the Commission priorities, namely: The Commission priorities (namely Jobs, growth and investment, Deeper and fairer economic and monetary union, and Migration) stress the need to reach economic recovery and focus on employment and social performance, the need to coordinate stronger economic policies within the European Semester, and the need for new policies on migration. Boosting labour demand and its improved structure is a key to address these priorities. In the latest employment guidelines, a part of the integrated guidelines adopted in 2015, the Council calls Member States to boost demand for labour (Guideline 5) and to enhance the functioning of labour markets (Guideline 7). These guidelines reinforce the need for better information on labour demand and job matching in order to address the EU policies. The European pillar of social rights, preliminarily outlined in 2016, will include active support for employment: increasing employment opportunities, improving job matching, supporting skills development, and transitions between jobs. Since the situation differs among sectors, regions and occupations (also skill levels and types of education), information on vacancies according to these characteristics would be particularly useful for the monitoring of current and future skill shortages and mismatches, occupational and geographical labour mobility, efficiency of matching demand and supply, labour market developments in terms of job creation, regional cohesion issues. 3

5 Alternative sources Some alternative ways of collecting JVS data are also explored in the context of Big Data. For instance, JVS data could be collected in the future by robots that would crawl the web and count the number of posted vacancies. The success of such methods will probably depend on the level of standardization reached for posted vacancies. Indeed, if the latter are identified by unique identification numbers, this would avoid double-counting which is the main current drawback of the current automatic methods. Ideally, a standard template for the posting of vacancies should also include the ISCO occupation and NUTS region to provide an alternative to surveys. Whereas Big data has the potential for providing results with detailed breakdowns, the totals will still need to be benchmarked against aggregates collected through the current quarterly surveys. However, as these new techniques will most likely need some years before delivering reliable results, one should also explore interim solutions if the annual data collection is discontinued. For instance, countries are encouraged to include, one quarter per year, the ISCO and NUTS variables in their quarterly questionnaire. Germany has already developed such a two-tier system by which more firms are surveyed and more questions asked every fourth quarter of the year. Under this scenario, the countries concerned could transmit quarterly JVS data by ISCO and NUTS, be it for one quarter per year only, instead of annual data. To open this possibility, Eurostat has already included the ISCO and NUTS dimensions in the new Data Structure Definition for Job Vacancy Statistics that is being tested this year. 4. PROPOSAL On the basis of the above analysis, Eurostat proposes to discontinue the annual data collection of JVS data. Countries that collect quarterly data by ISCO or NUTS, be it for one quarter per year, are invited to transmit this additional information through the quarterly transmission as made possible by the revised Data Structure definition. 4

6 The LAMAS working group is invited: - To agree on discontinuing the annual data collection for Job Vacancy Statistics; - To mention if any ISCO or NUTS information is collected from their quarterly survey, be it for one quarter per year; - To agree on providing ISCO and NUTS information, when available and on an optional basis, through the quarterly transmission of JVS data. 5