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    Jobs and Skills Australia produces quarterly Small Area Labour Markets (SALM) estimates of unemployment and the unemployment rate at the Statistical Area Level 2 (SA2) and Local Government Area (LGA) level - for more information on what SA2s and LGAs are, see the geography section.

    This page outlines the methodology used to produce the SALM estimates. The latest SALM data are available from the main Small Area Labour Markets page.

    Overview

    Small Area Labour Markets (SALM) presents estimates based on the Structure Preserving Estimation (SPREE) methodology.

    The purpose of SPREE is to produce small area unemployment, unemployment rate and labour force estimates that reflect the regional disparities of the Centrelink data, while being consistent with ABS Labour Force Survey estimates.

    Given the level of disaggregation involved, the small area figures produced by SPREE are smoothed (i.e., averaged) over four quarters, to dampen the variability inherent in the small area estimates.

    Source data

    Four primary data sources are used to produce the SA2 and LGA estimates in SALM:

    1. Current recipients of Youth Allowance (other), and current recipients of Newstart Allowance or JobSeeker Payment who are not on a zero rate of payment, by SA2;
    2. ABS Labour Force Survey data by ABS Statistical Area Level 4 (SA4). The ABS LFS samples private and non-private dwellings (approximately 24,000 dwellings) across Australia, resulting in a sample of around 50,000 people. More details about the methodology underpinning this survey are included in the ABS publication, Labour Force, Australia;
    3. Participation rate data at the SA2 level from the Census of Population and Housing (the latest Small Area Labour Markets (SALM) data use the 2021 Census, while estimates between the March quarter 2014 and the March quarter 2019, inclusive, use 2016 Census benchmarks and estimates prior to the March quarter 2014 use 2011 Census benchmarks); and
    4. The latest estimated resident population (ERP) estimates for persons aged 15 and over by sex by SA2 from the ABS release Regional population by age and sex.

    How SALM estimates are produced

    Estimating unemployment

    SALM produces unemployment estimates using an iterative process.

    • Step one apportions ABS unemployment at the SA4 level across each of the SA2s within that region based on the distribution of Centrelink JobSeeker/Newstart and Youth Allowance (other) beneficiaries at the SA2 level by sex.
    • Step two benchmarks the estimates produced in step one to ABS unemployment estimates by age, sex and marital status at the Greater Capital City Statistical Area (GCCSA) level.

    These steps are repeated until the SALM unemployment estimates for the SA2s in each SA4 match the published ABS unemployment figures, and the age/sex/marital status groups in each GCCSA, for those regions and groups.

    Estimating the labour force

    Labour force size estimates are produced by:

    • taking the participation rate for each SA2 from the Census. If an SA2 does not have a participation rate, the participation rate for the SA3 is used as a proxy;
    • applying this to the latest available ABS estimated resident population (ERP) data for persons aged 15 and over for the SA2, to produce a labour force weighting for the SA2 within the SA4; and then
    • allocating the total labour force for each ABS SA4 to the SA2s within that region according to the labour force weighting.

    By using Census participation rates and the latest available ERP, the SA2 labour force estimates reflect any changes in the distribution of population within each SA4 that have occurred since the last Census.

    Please note that the ABS generally only publishes up-to-date ERP estimates for the latest (2021) edition of the ASGS. Where ERP data for an earlier ASGS are needed but not published on these boundaries by the ABS (for example, 2022 ERP on the 2016 ASGS for SALM estimates prior to the September quarter 2023) a population-weighted correspondence is used to produce the required figures on the appropriate ASGS.

    Calculating the unemployment rate

    Consistent with ABS methodology, unemployment rate estimates are produced by calculating the level of unemployment as a proportion of the labour force.

    Producing LGA estimates

    LGA estimates are produced by apportioning SA2 unemployment and labour force estimates using the latest available SA2 to LGA correspondence from the ABS.

    Employment should not be derived from SALM

    The SALM data are synthetic estimates based on ABS unemployment and Centrelink JobSeeker and Youth Allowance (other) beneficiary numbers and labour force data from the Labour Force Survey and the Census. The production of SALM does not involve the use of any data that enables reliable modelling of employment at the small area level. Nor does SALM attempt to estimate employment for either SA2’s or LGA’s. Accordingly, employment estimates should not be derived from these SALM statistics. For more information, please email the SALM inbox at SALM@jobsandskills.gov.au.

    Greater disaggregations not available

    Due to the significantly more pronounced variability of the data disaggregated below the SA2 or LGA level, it is not possible to derive reliable estimates for smaller population groups.

    Accordingly, it is also not possible to estimate reliable unemployment and unemployment rate estimates for particular groups, such as sex or age cohorts, within an SA2 or LGA.

    The geographical structure used for Small Area Labour Markets

    From the September quarter 2023 edition of SALM, the SA2 estimates are based on the ABS 2021 ASGS.

    Due to changes in the ASGS between the 2016 and 2021 editions, there were a number of breaks in series at the SA2 level. As the production of smoothed SALM data requires four consecutive quarters of unsmoothed estimates, smoothed data for those SA2s and Local Government Areas that experienced a break in the unsmoothed series (between the June and September quarter 2023) will only be available starting from the June quarter 2024. For the September quarter 2023, the only available estimates for these SA2s are from the unsmoothed series.

    • For more information on the ASGS changeover, please see the SALM 2021 ASGS Changeover User Guide available on this page. Similarly, the unsmoothed SALM estimates can also be downloaded further down on this page.

    Estimates are not available for all SA2s and LGAs

    Most SA2s and LGAs have a complete time series of data, with smoothed SALM estimates available from the December quarter 2010 onwards. For some regions, however, the available time series is shorter, while for other regions no estimates are available at all.

    There are 3 reasons why data are not available for every SA2 and LGA:

    • A break in series: some SA2s and LGAs have a ‘break in series’ so that only a partial time series is available. Most of these series breaks were the result of SALM transitioning to a new edition of the ASGS, as detailed above. SALM moved from the 2011 to the 2016 ASGS in the June quarter 2019, and from the 2016 to the 2021 ASGS in the September quarter 2023.
    • The SA2 is considered too small: there are around 120 SA2s which Jobs and Skills Australia considers have too small a population for the production of reasonable estimates.
    • Other factors: rarely, even though the region has a sufficiently large population, the methodology used in SALM will not produce estimates considered appropriate for publishing. This is why no estimates have been published for the SA2 and LGA of Aurukun since the June quarter 2017.

    Smoothed estimates are not always available for published SA2s and LGAs

    Four quarters of consecutive data are required to produce a smoothed SALM estimate at the SA2 or LGA level. Breaks in series can result in a number of quarters for which a smoothed estimate is not available for an SA2 or LGA, even if it would otherwise be published. 

    For example, smoothed estimates for SA2s or LGAs that experienced a break in the unsmoothed series between the March and June quarters 2019, due to the changeover to the 2016 ASGS, are only available starting from the March quarter 2020. Similarly, smoothed estimates for SA2s or LGAs that experienced a break in the unsmoothed series between the June and September quarters 2023 will not be available until the June quarter 2024.

    For the September quarter 2023, and the June quarter 2019 to the December quarter 2019, the only available estimates for those SA2s or LGAs that have experienced a break are from the unsmoothed series. As is always the case for unsmoothed data, significant caution should be exercised when examining these figures, as they exhibit far greater volatility than the smoothed series.

    Impact of corresponded ERP data on the SA2 estimates

    The ABS is no longer producing ERP data on earlier editions of the ASGS. As SALM SA2 estimates up to the June quarter 2023 are based on either the 2016 or 2011 edition of the ASGS, it has been necessary to use a correspondence to produce ERP estimates for those SA2s which have experienced any geographic changes between the earlier editions of the ASGS and the 2021 ASGS (even if those changes were not large enough to constitute a break in series in SALM).

    While the use of corresponded data may have had a small impact on the labour force and unemployment rate estimates for a small number of the affected SA2s, analysis undertaken by Jobs and Skills Australia suggests this will not have been significant. For more information please contact SALM@jobsandskills.gov.au.

    Unsmoothed SALM estimates

    The smoothed SALM figures are Jobs and Skills Australia’s official estimates of unemployment and the unemployment rate at the SA2 and LGA levels. It is recognised, however, that some advanced users may need access to the unsmoothed estimates, which are used to produce the official figures, and these are provided.

    The unsmoothed series can exhibit very high levels of variability. Accordingly, we advise exercising extreme caution when using the unsmoothed series, whether it is using point-in-time estimates or interpreting quarter-to-quarter (or even year-to-year) changes.

    SALM Unsmoothed LGA Datafiles (ASGS 2023) - September quarter 2023

    SALM Unsmoothed LGA Datafiles (ASGS 2023) - September quarter 2023.xlsx531687

    Download

    SALM Unsmoothed LGA Datafiles (ASGS 2023) - September quarter 2023

    SALM Unsmoothed LGA Datafiles (ASGS 2023) - September quarter 2023.csv543223

    Download

    SALM Unsmoothed SA2 Datafiles (ASGS 2021) - September quarter 2023

    SALM Unsmoothed SA2 Datafiles (ASGS 2021) - September quarter 2023_0.xlsx2236484

    Download

    SALM Unsmoothed SA2 Datafiles (ASGS 2021) - September quarter 2023

    SALM Unsmoothed SA2 Datafiles (ASGS 2021) - September quarter 2023_0.csv2253274

    Download

    Geography

    Statistical Area Level 2 (SA2)

    There are around 2,500 SA2s in Australia (approximately 2,300 of which have estimates published in SALM).

    • The SA2s are a geographical unit that aggregate to the Statistical Area Level 4s in the Australian Bureau of Statistics’ (ABS) 2021 Australian Statistical Geography Standard (ASGS).
    • ABS Labour Force Survey data are based on the ASGS.

    SA2 boundary changes

    The SA2 structure used in SALM is based on the availability of input data for the latest edition of the ASGS. It normally takes 1-3 years after a new ASGS has been released for input data to be available on the latest ASGS.

    The ABS generally changes SA2 boundaries every five years, during Census years. SALM currently uses the SA2 structure from the 2021 ASGS.

    Changes between different editions of the ASGS

    SA2 estimates are based on the 2021 ASGS, as at the September quarter 2023 edition of SALM.

    Due to changes in the ASGS between the 2016 and 2021 editions, there were a number of breaks in series at the SA2 level. These were due, largely, to SA2s being split into multiple, smaller SA2s, although there were also a small number of other breaks.

    More information on the changeover from the 2016 ASGS to the 2021 ASGS is available in the SALM 2021 ASGS Changeover User Guide, which is available for download below.

    SALM 2021 ASGS Changeover User Guide

    salm_2021_asgs_changeover_user_guide.pdf525498

    Download

    For changes that took place between the 2011 and 2016 editions of the ASGS (SALM moved from the 2011 ASGS in the March quarter 2019 to the 2016 ASGS in the June quarter 2019), please see the SALM 2016 ASGS Changeover User Guide – 2022 Update, which is available for download, below.

    SALM 2016 ASGS Changeover User Guide – 2022 update

    salm_2016_asgs_changeover_user_guide_-_2022_update.pdf392377

    Download

    Local Government Areas (LGAs)

    There are around 540 LGAs in Australia.

    • LGAs are based on the boundaries of the smallest government units (local councils) in Australia.
    • Jobs and Skills Australia produces the SALM LGA estimates using the latest available SA2 to LGA correspondence from the ABS.

    LGA boundary changes

    LGA boundaries are determined by the governments of the states and the Northern Territory.

    While there are often only minor, if any, changes year-to-year, sometimes there can be more substantial adjustments to this structure.

    SALM transitions to a new LGA structure when a correspondence between SA2s and the new LGA structure is available from the ABS.

    Boundary changes usually only lead to a small proportion of LGAs having a break in series. There can, however, be a larger number of breaks when moving to a new ASGS, as occurred between the June and September quarters 2023 (see the SALM 2021 ASGS Changeover Guide, above, for more details).

    Smoothed data are not published for regions with a break in series until the fourth quarter after the break. 

    SALM estimates have been based on the 2023 LGA structure since the June quarter 2023 release of SALM. There were only minor differences between this and the previous LGA structure – see the ABS ASGS page on the LGA structure for more details.

    2011 and 2016 ASGS SA2 and LGA estimates

    Jobs and Skills Australia maintains SALM SA2 and LGA estimates, based on the previous (2011 and 2016) editions of the ASGS.

    Due to 2021 Census-related population rebenchmarking, 2011 ASGS SA2 estimates from the September quarter 2016 up to the March quarter 2019 have been revised for the September quarter 2023 release. Similarly, 2016 ASGS SA2 estimates from the June quarter 2019 up to the June quarter 2023 were also revised. If users need to obtain the revised SA2 or LGA estimates for past quarters, based on the 2011 and/or 2016 ASGS (for example, for areas that have had a break in series), please email the SALM inbox at SALM@jobsandskills.gov.au.