Employment, Self-Employment and Economic Activity Rates from the Annual Population Survey

Introduction

The Annual Population Survey (APS) is a survey of households in Great Britain with the purpose to provide information on key social and socio-economic variables between the 10-yearly censuses. The results in this research monitor are based on findings from the APS and from its predecessor the Labour Force Survey.

The complete range of available data sets from the Annual Population Survey for all areas of the country can be downloaded from the NOMIS website. This particular article looks at local employment, self-employment and economic activity results from the APS.

For the year to December 2007, there was a national total of 280,128 people surveyed for the Annual Population Survey, and in the broader Lancashire NUTS-2 area, 6,160 interviews took place. District authority results in particular are not based on large numbers of interviews and therefore are liable to wide margins of error.

National and Regional Context

The employment rate is one of the economic indicators that economists use to help understand the state of the economy. In this article the employment rate is presented as the proportion of the population of working age (16-59 for females and 16-64 for males) who are in employment. Other things being equal, regions or areas with higher employment rates are more likely to have higher standards of living because they will have a higher percentage of the population generating income.

The six-year period from 2002 to 2007 reveals that at the national level, the employment rate has remained relatively stable at around 74.2% to 74.5%. In comparison, for the North West region employment rates over the same period have consistently been below 73%, with the latest 2007 result being 72.3%.

Lancashire

For the 14-district Lancashire NUTS-2 area, that includes the two unitary authorities of Blackburn with Darwen and Blackpool, the six-year period saw employment rates occupy the middle ground between the higher GB rates and the lower North West rates. Given the sample size of the Labour Force Survey, it is only possible to derive a broad indication of employment rates at the broader Lancashire level rather than to be able to accurately monitor yearly changes.

The problem of data accuracy becomes far more acute at the local authority level therefore the district and unitary authority results should be viewed with extreme caution. At the district level, the sample size can be quite small, e.g., the 2007 result for Rossendale was based on just 161 respondents.

The broad indications are that high employment rates appear to be consistently recorded in Chorley, Fylde Ribble Valley and South Ribble, whilst the East Lancashire authorities of Blackburn with Darwen, Hyndburn, Burnley and Pendle have patterns of low employment rates. Blackpool also has a recorded pattern of low employment rates.

Self-Employment, Historical Context and Recent Results

At the national level, self-employment as a proportion of the adult population has grown over the last twenty years. The period 1986 to 1990 in particular saw a high rate of growth with the proportion rising from 6.3% to 7.9%. This growth in self-employment in the 1980s was attributed to government incentives such as the small business start-up scheme, the growth in long-term unemployment, the expansion of the service sector, where self-employment is more prevalent, coupled with the decline in manufacturing, and the shift towards contracting-out of services by large employers.

In general, the self-employed are more commonly associated with skilled trade occupations i.e., in the Construction sector, also business activity industries such as Banking, Finance and Insurance. There is also a geographic tendency towards higher self-employment levels in London and the South East.

Self-employment is generally entered into most frequently after the age of 30. This is partly due to the need for people to acquire sufficient experience and financial resources. The proportion of the self-employed therefore is found to increase with age, especially for those over the retirement ages of 59/64.

Table 2 has self-employment data for Great Britain and the two Lancashire areas. For the past few years at the national level, the Annual Population Survey figures have suggested a rate of self-employment of around 13.0%. For the Lancashire County Council (NUTS-3) area, and the broader Lancashire NUTS-2 area that includes the two unitary authorities, the impression is of noticeably lower self-employment rates than the GB average.

Economic Activity Rates

The APS results for the percentage of working people who are economically active reveal that activity rates in the broader Lancashire area have been consistently below the national average of around 78.6%. Excluding the two unitaries, the figures for the Lancashire County Council area are in most instances between the lower Lancashire NUTS-2 results and the higher rates recorded at the national level.

Economic activity rates incorporate people who are seeking work but who may not have a job. They are therefore higher than the employment rates detailed in Table 1.