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Singapore Employment Situation - 3rd Quarter 2004

Explanatory Notes

Employment

Administrative records. The self-employed component is estimated from the Labour Force Survey.

The employment data comprises all persons in employment i.e. employees and the self–employed. It covers active Central Provident Fund (CPF) contributors, work pass holders and the self-employed. It excludes males who are serving their 2-year full-time national service liability in the Singapore Armed Forces, Police and Civil Defence Forces.

Employment change refers to the difference in the employment level at the end of the reference period compared with the end of the preceding period.

This data series allows the user to identify individual industries where employment is growing or stagnating. An analysis of the data over time also helps in understanding the impact of economic cyclical and structural changes on the demand for workers. Detailed data are published in the quarterly Labour Market Report.

The change in employment over time is the net result of increases and decreases in employment i.e. net of inflows and outflows of workers. Users should not mistake an increase in employment as gross job creation.

Unemployment

Labour Force Survey

The survey covers the population living in private households on the main island of Singapore.

It excludes construction workers living in worksites; persons commuting daily from abroad to work in Singapore; persons living in dormitories or workers’ quarters at the workplace; persons living in institutional households; and persons on board ships and boats.

Unemployed Persons refer to persons aged 15 years and over who were without work during the survey reference period but were available for work and were actively looking for a job.

They include persons who were not working but were taking steps to start their own business or taking up a new job after the reference period.

Unemployment Rate is defined as the percentage of unemployed persons to the total number of economically active persons (i.e. employed and unemployed persons) aged 15 years and over.

The unemployment rate is probably the best-known measure of the labour market. It measures unutilized labour supply and is useful in the study of the economic cycle as it is closely related to the fluctuations in the business cycle. Detailed data are published in the quarterly Labour Market Report and the annual Report on Labour Force in Singapore.

Unemployment can have frictional, cyclical and structural elements. As it takes time for job seekers and employers to find a match, there is always a certain level of frictional unemployment due to people changing jobs and from new entrants looking for work for the first time. Unemployment can also be structural e.g. arising from a mismatch between the job seekers and the job openings available. With structural unemployment, even if job vacancies and job seekers coexist in the labour market, they may not be matched over a long period of time. Finally, unemployment can be cyclical. This occurs when there is a general decline in demand for manpower as aggregate demand for goods and services falls in the event of a cyclical downturn or recession. Unlike structural and frictional unemployment where the problem is in matching job openings with job seekers, cyclical unemployment occurs when there are not enough jobs to go around.

Unemployment can vary due to changes in demand or supply of manpower. Unemployment can decline if more people succeed in securing employment or when the unemployed persons stop to look for a job and leave the labour force either temporarily (e.g. to take up training) or permanently (e.g. to retire). Conversely, unemployment may rise due to increases in labour supply from new entrants or re-entrants to the labour market. It will also rise if more people quit their jobs to look for alternative employment or if there is an increase in layoffs.

Retrenchment

Labour Market Survey

The survey covers private sector establishments each with at least 25 employees.

Retrenchment refers to the termination of employment of a permanent employee due to redundancy.

Data on retrenchment are useful in the analysis of re-structuring or ailing industries. Detailed data are published in the quarterly Labour Market Report.

The number of persons retrenched (flow) should not be confused with persons unemployed (stock). Not all persons retrenched will be unemployed as some will be re-employed or decide to leave the workforce. Similarly, the pool of unemployed persons comes not only from retrenchments, but also from new entrants to the labour force such as school leavers and the economically inactive who decide to re-join the workforce.

Source: Ministry of Manpower Press Release 1 Nov 2004