Nigeria Labour Force Survey – Key Definitions

NBS – April 2023

Table 1. List of key labour market definitions

Nigeria Labour Force Survey – Frequently Asked Questions

NBS – April 2023

Why has there been a two-year gap between the publication of previous labour statistics and the new Nigeria Labour Force Survey (NLFS) data?

The main reason for the delay between the previous labour statistics in Nigeria and the upcoming release of the new NLFS is that NBS has been investing the time to carefully collaborate with international organisations, including the World Bank and International Labour Organisation (ILO), to create a sustainable model for producing labour statistics. This model should allow for the production of labour statistics in Nigeria not just for a year, or a few years, but decades.

Why is it impossible to construct trends for key labour market statistics by comparing the new NLFS data with previous NBS labour market data?

Many of the key tenets of the methodology for the NLFS have changed compared with previous labour market surveys in Nigeria. Four changes are worth particular attention. First, the questionnaire has been improved to match international best practices. Second, the sampling approach has been revised, based now on the updated listing of buildings and structures provided by the National Population Commission (NPC) ahead of the upcoming census. Third, the continuous data collection schedule is very different from the quarter-specific surveys that were undertaken previously. Fourth, significant efforts have been taken to reduce proxy response, including reorganizing the fieldwork to run from Wednesday to Sunday each week so that those respondents not available for interview during the main working days can be reached.

Further to this, the pandemic provided a huge shock to labour markets around the world, including in Nigeria, making it difficult to compare results over the previous three years.

Why does running the survey through a continuous methodology guarantee that the data will be of high quality?

The NLFS has adopted a continuous methodology, where field teams are collecting data throughout the year. This differs from the previous design, where four separate data collection efforts were planned for each quarter: this approach had not been implemented for four consecutive quarters within a calendar year since 2017.

The continuous methodology presents four main advantages. Firstly, with data constantly being collected, the fieldwork can be spread out more and the work can be implemented with smaller teams, reducing capacity constraints and survey burden on NBS. Secondly, the approach allows for real-time monitoring of data quality, which enables issues to be fixed and data collection to improve while the survey is being implemented. Thirdly, the continuous methodology means that the same enumerators and field-team staff will work permanently on the NLFS, making it easier to manage the survey. Fourthly, the continuous collection approach has been adopted in many other settings with high-quality labour force statistics, including in developed countries: using this approach enables Nigeria to follow best international practices and set an example for other countries in Sub-Saharan Africa.

How is unemployment now being measured in Nigeria?

The precise definition of the unemployment rate adopted in the new NLFS – which conforms to best international practices – represents the share of the labour force who are (1) not employed, (2) actively searching for work, and (3) available for work.

1. Being employed means working for pay or profit (so not subsistence agriculture) for at least one hour (the “one-hour criterion”) in the previous seven days or being temporarily absent from such an activity. Being not employed is the opposite of this.
2. Active search means that the individual must have taken specific actions to search for a job or start a business in the previous four weeks.
3. Availability means that the individual must have been available to work in a job or start a business last week or would be able to do so in the next two weeks.

It is helpful to look at other countries in the region when interpreting the measure of unemployment coming in the new NLFS. The average modelled ILO unemployment rate estimate for the Western and Central Africa region for 2021 was around 5 percent.

Why is the one-hour criterion being used to define employment (and hence unemployment)?

The one-hour criterion for defining employment has five main advantages. In particular, the one-hour criterion:

1. Ensures that all forms of employment are included in accordance with priority rules of the ILO labour force framework – this includes short-term work, casual work, standby work, and other irregular employment.
2. Means that employment, unemployment, and inactivity (being out of the labour force) are mutually exclusive and exhaustive categories.
3. Ensures that there is coherence between national accounts and employment statistics: the aggregate level of total labour input corresponds to measures of total production.
4. Allows measures of unemployment produced by the NLFS to be compared internationally.
5. Makes it possible to precisely separate those who are in time-related underemployment (partial lack of work), as a sub-category of employment.

How are poverty and unemployment related?

Data from the 2018/19 Nigerian Living Standards Survey (NLSS) suggest that poverty and unemployment may be inversely correlated at the state level in Nigeria, because people living below the poverty line cannot support themselves through extended periods of active job search. They need to work in order to provide for their household. This should be borne in mind when interpreting the results of the NLFS.

Poverty is more closely associated with the quality of jobs that people do – including whether they hold wage jobs, the hours they work, the occupations and activities in which they engage, and markers of job formality.

Does the NLFS cover employment in the informal sector?

Individuals that are employed in the informal sector, including in small-scale self-employment activities, are counted as employed in NLFS. Employment covers all individuals who are working for pay or profit, meaning those who worked for pay or profit for at least one hour in the last seven days, as well as those who are temporarily absent from such activities.

The definition of pay and profit is broad. It refers to any type of remuneration that is:

1. In cash or in kind (including wages or salaries for time worked or profits from sale or barter of goods)
2. Already paid or expected to be paid (remuneration that is payable)
3. Paid directly to the person performing the work or indirectly to/through a household member

Why are the occupation and activity classifications – otherwise known as, employment by sector – not being released in the first report?

NBS is investing the time to check and clean the International Standard Classification of Occupations (ISCO) and International Standard Industrial Classifications (ISIC) codes collected in the NLFS extremely carefully to ensure they are accurate. These indicators provide crucial information on the composition of the labour market and the Nigerian economy at large, so it is important to make sure they are completely reliable. Statistics on occupation and activity will be provided later in the year.

How is underemployment being captured in the NLFS?

The NLFS adopts a time-based measure of underemployment, in line with ILO standards. Underemployment covers those employed individuals working one hour or more but less than 40 hours per week who are willing to work more hours and who are available to do so.

Why will the report focus only on shares or percentages rather than absolute numbers?

With only one quarter of data and with the census not yet complete, the sampling weights used for the new NLFS do not allow a certain estimate of the full working-age population to be produced. Further data and checks will be needed before this is possible. However, it is possible to calculate the shares and percentages associated with different labour market indicators based on those sampling weights that can already be calculated. This is the approach taken in the report.