Appendix 1
Measuring employment and unemployment in Canada and in the United States: An overview of the surveys

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Statistics Canada Labour Force Survey (LFS)

The Labour Force Survey (LFS) is a monthly survey of households conducted by Statistics Canada. It provides monthly estimates of employment and unemployment that are among the most timely and important indicators used to measure the performance of the Canadian economy for the purposes of managing growth, counter-cyclical and anti-inflationary policies. The LFS is the official source for the unemployment rate in Canada. It is also used to administer the federal Employment Insurance Program.

Since its inception in 1945, the objectives of the LFS have been to divide the working-age population into three mutually exclusive groups—employed, unemployed, and not in the labour force—and to provide descriptive and explanatory data on each of these categories. In order to do so, the LFS follows guidelines established by the International Labour Organization (ILO). For employed people, the survey collects information on the job characteristics such as whether the person is an employee or self employed, the industry and occupation of that job, hours worked and their earnings. In addition, the LFS provides contextual information on their demographic, family and education characteristics.

Data from the survey provides information on major labor market trends such as shifts in employment across industrial sectors and occupational groups, average weekly earnings, hours worked, labor force participation, and unemployment rates.

The LFS is a panel survey of dwellings, where each month a new sample of household members is selected to participate for six consecutive months. The total monthly sample size is about 56,000 households. Estimates are produced for Canada, provinces, territories and major sub-provincial regions including metropolitan areas and employment insurance economic regions.

For more detailed information, see Guide to the Labour Force Survey, Statistics Canada.

Statistics Canada Survey of Employment, Payrolls and Hours (SEPH)

The Survey of Employment, Payrolls and Hours (SEPH), also conducted by Statistics Canada, provides a monthly portrait of the amount of earnings as well as on the total number of jobs. Its strength is in the information it provides on payroll employment, earnings and hours by detailed industry classifications.

The data provide the principal input to labour income estimates and support the production of real gross domestic product and nominal gross domestic product.  SEPH data are also used by the Canada Revenue Agency (CRA), to revise the maximum pensionable earnings and retirement savings plan contribution limits, and by the private sector, for contract escalations and wage rate determinations.

First conducted in 1918, Canada’s monthly payroll survey has evolved greatly over the years. In the 1990s, to reduce respondent burden and improve the quality of certain estimates, Statistics Canada began substituting survey data with data from payroll deduction remittance forms (PD7) submitted monthly by establishments (businesses) to Canada Revenue Agency.

Over time, the administrative data, in essence a census of Canada’s one million establishments, became the main source of information for what is now called SEPH for the total number of employees and total payroll. The Public Sector Employment Survey provides information for general government services at the provincial and federal levels. The main survey component of SEPH, called the Business Payrolls Survey (BPS), provides additional information on hours worked and earnings that are combined with the administrative data using regression techniques. The BPS sample has during this time declined from 70,000 to 15,000 establishments. The trade-off for better employment estimates from greater use of administrative data is an increase in the timeline for releasing the employment estimates.

Estimates are released for Canada, the provinces and territories. Detailed breakdowns by industry follow the North American Industry Classification System (NAICS).

For more detailed information, see Guide to the Survey of Employment, Payrolls and Hours, Statistics Canada.

U.S. Bureau of Labor Statistics Current Employment Statistics (CES)

The Current Employment Statistics (CES) survey is a federal-state cooperative program. The Bureau of Labor Statistics works with state employment security agencies^{Note 1} to collect data each month on employment, hours and earnings from a sample of non-farm establishments.

The data provide the first economic indicator of current economic trends each month. They are inputs to many gauges of the U.S. economy including the overall health of the economy, earnings trends and wage-push inflation and short-term fluctuations in demand. They are also input to other major economic indicators such as personal income, industrial production and productivity measures. They inform other areas of business and research for public policy, wage negotiations and economic research and planning.

Conducted since 1939, data produced from the CES survey include non-farm employment series for all employees, production and nonsupervisory employees, and women employees, as well as average hourly earnings, average weekly hours, and average weekly overtime hours (in manufacturing industries) for both all employees and production and nonsupervisory employees.

The survey frame for the CES is the Bureau of Labor Statistics Longitudinal Database, which contains employer records for about nine million establishments (businesses) in the United States. Each month the CES surveys approximately 143,000 businesses and government agencies, representing about 588,000 worksites. Estimates at the national, state and metropolitan levels are generated independently from the sample frame. Modeling techniques are used when there are sampling limitations, including certain metropolitan areas and industry groupings. Detailed breakdowns by industry follow the North American Industry Classification System (NAICS).

For more detailed information, see Technical Notes for the Current Employment Statistics Survey, Bureau of Labor Statistics.

U.S. Bureau of Labor Statistics Current Population Survey (CPS)

The Current Population Survey (CPS) is a monthly survey of housing units (also referred to as households) conducted by the U.S. Census Bureau for the Bureau of Labor Statistics. It provides the most comprehensive measure of national employment and unemployment, including the national unemployment rate, and is the primary source of data on employment status and characteristics of the labour force, emerging trends, and changes. The data are used as a measure of potential labour supply, for providing determining factors affecting changes in labour force participation of different population groups and for evaluation of wage rates and earnings trends for specific demographic groups.

Conducted since 1940, the CPS provides information on employment, unemployment, persons not in the labour force, hours of work, earnings, and other demographic and labour force characteristics.

The CPS is a monthly panel survey of about 60,000 housing units. The survey asks about the employment status of household members, enabling an allocation of the working-age population into three mutually exclusive groups—employed, unemployed, and not in the labour force. Each month a new sample of housing units is selected to participate for four consecutive months. They then drop out of the sample for the next eight months, and are interviewed again in the following four months. Housing units are in the CPS sample two additional months and over a longer period than the LFS. With this approach, households report on the same four months for two consecutive years, improving the accuracy of the month-to-month and year-to-year change estimates.

While the CES produces national estimates of employment, the CPS provides an integrated set of national employment and unemployment estimates. At this national level and state, both sets of employment estimates are fairly consistent. Regional estimates of employment and unemployment are generated through the Local Area Unemployment Statistics (LAUS) program. This program models current and historic data from the CPS, the CES and state employment insurance systems to produce estimates from the state level to counties and certain cities and towns.

For more detailed information, see Design and Methodology: Current Population Survey, U.S. Census Bureau, 2006.

Notes