Labour market statistics: what’s been going wrong?

The quality and trustworthiness of economic statistics have been in the news on both sides of the Atlantic. Many of the issues have emerged since the pandemic, in particular as a result of low survey response rates. This form of data collection remains essential for understanding the labour market.


No one who pays attention to news about the economy will have missed the recent spell of stories about the quality of economic statistics, not just in the UK but also internationally.

From the results of the main survey of the UK labour market being pulled ahead of their scheduled publication in October 2023 to the sacking of the commissioner of a leading US statistical agency in August 2025, it seems that there has been a constant series of stories about economic data quality across the globe.

What are the big challenges of economic data collection, what has happened in the UK with the Labour Force Survey (LFS) and what should be done? These questions are the focus of this article.
How are economic statistics produced?

Most of our economic statistics come from, and have always come from, surveys of individuals, households and businesses. There are good reasons for this – primarily that the sort of information that we need to measure and understand particular phenomena are rarely collected otherwise.

Take a simple question: how many people in the UK are unemployed?

You might think that the answer is the number of people receiving unemployment benefits. This measure is referred to as the ‘claimant count’, and it can be calculated using data held by the government to administer these payments – what’s known as ‘administrative data’.

But what about people who are unemployed but not claiming unemployment benefit? What about those in receipt of unemployment-related benefits because their pay is low? Do we want to include them in the calculation of the unemployed?

And what if the government redefines the eligibility criteria for unemployment benefit: does this mean that people who are no longer eligible now stop being ‘unemployed’?

In practice, we need a measure that is not sensitive to how governments define benefit eligibility. We also want to capture those who are unemployed but not claiming unemployment-related benefits.

This is why the unemployment rate is based on a definition provided by the International Labour Organization (ILO) where the unemployed are: Those who are without a job, who have been actively seeking work in the past four weeks and who are available to start work in the next two weeks.
Those out of work who have found a job and who are waiting to start it in the next two weeks.

This is a broader measure of unemployment than the claimant count, and one that cannot be ascertained from administrative data. We need a survey to learn about people's availability and job search activity.

Countries typically run a survey to produce a measure using this definition of unemployment, providing a metric that is comparable across countries. In the UK, this is called the Labour Force Survey (LFS). It is this survey that has been the focus of much criticism in recent months.

In constructing estimates of other key labour market metrics, similar issues emerge, including when measuring employment, self-employment and hours worked. While administrative data might provide us with insights that are ‘good enough’ for some purposes, they are not – as things stand – able to provide the information necessary to construct measures consistent with the ILO definitions. We still need surveys.



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