June 08, 2015 / 12.07pm /National Bureau of Statistics
In computing the unemployment rate, the total population is divided into labour force (currently active) and non‐labour force (not currently active). The labour force population covers all persons aged 15 to 64 years.
The definition of unemployment therefore covers persons (aged 15–64) who during the reference period were currently available for work, actively seeking for work but were without work.
A person is regarded as employed if he/she is engaged in the production of goods and services, thereby contributing to the Gross Domestic Product (GDP) in a legitimate manner, which is a component of the national accounts and receives any form or amount of compensation for that activity.
The category of persons considered not in the labour force include those not between 15‐64(economic active population) as well as those within the economically active population i.e 15‐64, who are unable to work, not actively seeking for work or choose not to work and/or are not available for work.
Examples of these are voluntary full time housewives, underage children 14 and below, adults above 65, full time students, those in active military service, physically challenged and incapacitated persons whose in‐capitation prevents them from working.
Growth in the labour force therefore fluctuates and depends on the decisions by members of the economically activate population on whether to work or not which varies across different cultures, religion, as well as various academic, economic and family considerations.
There is no standard definition of unemployment as various countries adopt definitions to suit their local priorities. Virtually all countries however use the International Labour Organization (ILO) definition, or a variant of it to compute unemployment.
The ILO definition covers persons aged 15–64 who during the reference period (usually the week preceding the survey period for at least one hour), were available for work, actively seeking for work, but were unable to find work.
The Nigerian National Bureau of Statistics like most countries in the world now uses a variant of the ILO definition such that the unemployment is the proportion of those in the labour force (not in the entire economic active population, nor the entire Nigerian population) who were actively looking for work but could not find work for at least 20 hours during the reference period to the total currently active (labour force) population.
Accordingly you are unemployed if you did absolutely nothing at all or did something but not for up to 20 hours in a week. Underemployment however occurs if you work less than full time which is 40 hours but work at least 20 hours on average a week and /or if you work full time but are engaged in an activity that underutilizes your skills, time and educational qualifications.
Accordingly rural farmers only farming seasonally will be considered underemployed if they only work on their farms during the planting and harvests period and do nothing in between. If farmers are however working in dry and wet season as is the case recently they will be considered involved in full employment.
This applies to drivers, cook, bankers, teachers etc who in most case work well over 40 hours and hence are considered fully employed as their working hours and often skills meet the adopted methodology.
It is important to note that the pervasive international definition of unemployment, underemployment or employment is not a function of the quantity/suitability of wages earned, nor on whether the person involved in a particular job or economic activity is looking for another job or unhappy with his current job.
Rather employment, underemployment and unemployment are treated as a function of a person’s involvement or otherwise in economic activity even if that activity is aimed at making ends meet.
The suitability of wages is covered under other quality of living standards indicators such as poverty etc and not in determining whether one is employed, unemployed or underemployed which is a function of economic engagement.
Highlights of Unemployment and Underemployment in Q1 2015
In Q1 2015, the labour force population increased to 73.4 million from 72.9million in Q4 2014, representing in an increase in the labour force by 0.69%. This means 504,596 economically active persons within 15‐64 entered the labour force i.e. were able and willing and actively looking for work between January 1 and March 31 2015
Within the same period, the total number in full employment (did something for at least 40hours) increased by 0.88%. The number of underemployed in the labour force during the review quarter however, declined by 6.46% resulting in a reduction in the underemployment rate to 16.6% (12.2mn) from 17.9% (13.1mn) in Q4 2014.
The number of unemployed in the labour force, on the other hand increased by 861,110 persons or 18.43% between Q4 2014 and Q1 2015 resulting in an increase in the unemployment rate to 7.5% in Q1 2015 from 6.4% in Q4 2015. Accordingly there were a total of 17.7 million people between ages 15‐65 either unemployed or underemployed in the labour force in Q1 2015.
The fact that the number of people that became unemployed (861,110 people) in the first quarter 2015 exceed the number of people that entered the labour force within the same period (504,596 persons) is an indication that some persons previously working in full employment lost their jobs while others previously underemployed and doing temporary, or part time work ended whatever they were doing and accordingly now didn’t have anything to do for at least 20 hours a week during the reference period.
Evidence of the latter case may be seen in the drop in the underemployment rate and simultaneous rise in unemployment analysed below
Unemployment and Underemployment by Age
Unemployment and underemployment was highest for persons in the labour force between the ages of 15-24 and 25-34 which represents the youth population in the labour force. The unemployment rate within the review period was highest for those within the ages of 15-24 (13.7% in Q1 2015, up from 11.7% in Q4 2014), while the underemployment rate for those within the ages 15-24 was 30.6%.
For those in the labour force within the ages of 25-34 however, unemployment rose to 8.2% in Q1 2015 from 6.9% in Q4 2014, while underemployment stood at 17.7% in Q1 2015 from 19.0% in Q4 2014.
Accordingly 44.3% of Nigerians in the labour force (not entire population) aged 15-24 were either unemployed or underemployed, while another 25.9% aged 25-34 were either unemployed or unemployed in Q1 2015.
Unemployment and Underemployment by Gender
Unemployment and underemployment was higher for women than men in Q1 2015. While 8.9% of women in the labour force (those between 15-65 willing, able and actively working or searching for work) were unemployed in Q1 2015, up from 7.5% in Q4 2014, while another 19.6% of women in the labour force were underemployed in Q1 2015.
On the other hand, 6.3% of males were unemployed in Q1 2015, up from 5.4% in Q4 2014, while another 13.9% of males in the labour force were underemployed.
1. Labour Productivity per Hour Drops to N624.22 in Q1 2015 - NBS
2. NBS Unemployment Committee Report Review – May 14, 2015
3. Welcome Address by Dr. Yemi Kale at the Unemployment Methodology Review Forum NBS H/Quarters, Abuja – May 14, 2015
4. Presentation of Labour Statistics based on Revised Concepts & Methodology for Computing Labour Statistics in Nigeria – May 14, 2015