Estimating zero-hours contracts

The method changes, but the overall estimate is similar.

Aeons ago in 2013, zero-hours contracts were a political focal point. Zero-hours contracts are employment which offers no set hours of work.

The question arises: how many people are on this kind of contract? The Office for National Statistics asks a flexible working question in labour surveys:

Some people have special working hours arrangements that vary daily or weekly. In your (main) job is your agreed working arrangement any of the following…

Respondents can say they are on a “zero hours contract” or eight other options. There are two different measures of people on zero hours contracts. The lower measure is only if it is someone’s ‘main’ employment.

If someone has a zero hours contract, analysts consider them employed — even if they did not work in that week. This classification matches international definitions.

The Labour Force Survey asks people about their jobs. Employees on this kind of contract may not have recognised the technical term. There was likely under-reporting of zero hours contracts by respondents:

Comparisons with 2012 and earlier years are complicated by a large increase between 2012 and 2013 that appeared to be due mainly to increased recognition and awareness of “zero-hours contracts”.

In 2014, the ONS started asking about these contracts in business surveys. By November 2016, there were around 1.7m contracts with people at work in the last fortnight. This was a little below double the 2016 estimate of people on zero hours contracts — at around 900,000.

All year round

The Labour Force survey is a panel survey. Households stay in the sample for five consecutive quarters. If people do not respond, researchers use answers from the last quarter instead. Circumstances are unlikely to change between one quarter and three months later.

Before 2020, the question on flexible working was in two rounds: April to June and October to December. Statisticians used to adjust the figure to try and account for this issue.

It was a UK-wide alteration. The assumption was the proportion of imputations was the same as all those in employment.

Now, the flexible working question is in labour surveys all year round.

In total, the two methods produce very similar estimates.

Under the surface, there was overestimation of zero hours contracts for those aged 65 and over. This is counter-balanced by underestimation among those aged 16 to 34.

Measuring flexible work is important for understanding modern labour markets.

This blog looks at the use of statistics in Britain and beyond. It is written by RSS Statistical Ambassador and Chartered Statistician @anthonybmasters.

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