economic forum; thursday 14 july 2016

ONS Economic Forum Email: [email protected] Twitter: @ONS #ONSeconomy

ONS Economic Forum 14 July 2016

1

ONS Economic Forum – July 2016

09.45 Introduction & Welcome

10.00 ONS: Economic Statistics and Analysis

Strategy: Enhanced Financial Accounts

10.40 Refreshment break

11.10 What’s New

11.50 What’s Next

Agenda


2

Introduction and welcome

Joe Grice, Director and Chief Economist

Jonathan Athow, Deputy National Statistician for Economic Statistics


3

ONS's Economic Statistics and Analysis

Strategy: Enhanced Financial Accounts

Frankie Kay, Director of Economic Statistics Transformation

Louisa Nolan, Enhanced Financial Accounts Development


4

Economic Statistics Transformation

Frankie Kay, Director of Economic Statistics Transformation


5

Economic Statistics Transformation Drivers

The Economic Statistics

Transformation Programme

addresses issues and

recommendations from a number

of recent reviews.

• Barker / Ridgeway –

National Statistics

Quality Review 2014

• Johnson - UK

Consumer Prices Stats –

A Review 2015

• Bean - Independent

Review of UK Economic

Statistics 2016

• ESA 10 – European

System of Accounts

6

EST - What we need to do

Develop our capability:

economic and analytical skills

Harness new data sources:

principally admin data

Re-engineer our production

processes / use new IT platforms

Develop new products and

insights into UK economy

Partnerships to access additional

expertise

7

EST - What we need to do

• Economic Statistics and

Analysis Strategy sets

down 10 key analytical

priority areas

• Essentially turns Bean

into ‘bitesize’ chunks of

research and activity

• Sets our research

priorities, to be updated

regularly

8

Economic Statistics and Analysis Strategy

• Measurement of gross domestic product (GDP)

• Measurement of services sector activities

• Information below whole economy level

• Measurement of the labour market

• Measurement of prices

• Measuring the modern economy – the digital revolution

• Beyond GDP – broader measures of welfare and activity

• Enhanced analytical capability to interrogate and understand

large underlying datasets

• Understanding the productivity puzzle

• Exploiting administrative data and a wide range of other data

sources

9

EST - Improving Capability

Internal capability External Capability

Economist Recruitment –

London

Economist & Analyst Recruitment –

Newport & Titchfield

ONS Data Campus Economic Statistics Centre of

Excellence

ONS Economic Experts Working

Group

ONS Fellows

10

Data access legislation - overview

• Strands included in DCMS Digital Economy Bill

• First and second readings in House of Commons,

mid to late Summer 2016

• Committee scrutiny and readings in House of Lords,

Autumn 2016 onwards

• Two distinct strands: Statistics and Sharing for

Research Purposes

11



12

The Enhanced Financial Accounts:

UK Flow of Funds

Louisa Nolan, Enhanced Financial Account Development


13

The Enhanced Financial Accounts A collaboration between ONS and the Bank of England

• Motivation for enhancing the UK’s financial accounts (‘flow of

funds’)

• What is flow of funds?

• An emerging picture of UK interconnections

• What are our objectives and priorities?

• How do UK financial statistics compare with other G7 countries?

• The timeline for delivery

• Next steps

14

• After last economic crisis, international consensus that flow of funds statistics would

improve financial stability and prudential analysis:

• Bank of England

• Barker Review of the UK National Accounts, 2014

• IMF: Special Data Dissemination Standard plus (SDDS+) - data for financial

market participants to assess economic situation in countries with access to

capital markets

• IMF: G20 Data Gaps Initiative - 20 recommendations to enhance economic

and financial statistics

• Independent Review of UK Economic Statistics, Bean, 2016

• Important for UK given size of financial sector

Motivation

15

UK has large financial balance sheets

0

500

1000

1500

2000

2500

2007 2008 2009 2010 2011 2012 2013 2014

pe

rce

nta

ge

o

f n

om

ina

l G

DP

UK

France

Canada

US

Germany

Italy

source: OECD

Total asset levels as proportion of nominal

GDP, by G7 country

16

What is flow of funds? The financial accounts: financial balance sheets, £ billion, 2014

0 2000 4000 6000 8000 10000 12000 14000

Non-financial corporations

Monetary financial institutions

Other financial institutions

Insurance corporations and pension funds

Central government

Local government

Households and NPISH

Rest of the world

assets

Monetary gold and SDRs

Currency and deposits

Debt securities

Loans

Equity and investment fund shares/units

Insurance pension and standardised guarantees Financial derivatives and employee stock options Other accounts receivable

0 2000 4000 6000 8000 10000 12000 14000


Monetary financial institutions

Other financial institutions

Insurance corporations and pension funds

Central government

Local government


Rest of the world

liabilities

Monetary gold and SDRs

Currency and deposits

Debt securities

Loans

Equity and investment fund shares/units

Insurance pension and standardised guarantees

Financial derivatives and employee stock options

Other accounts payable

source: ONS 17

What is flow of funds?

• ‘flow of funds is the flow of money (finance) between various sectors of the economy’

includes, but is not limited to, whom-to-whom statistics: for each sector and asset,

the corresponding sectors holding the liabilities are identified

• for the UK, the Enhanced Financial Accounts (aka ‘flow of funds’) means:

improving the quality, coverage and granularity of the UK’s financial

accounts, including whom-to-whom statistics

covers stocks, transactions, revaluations and other changes in volume, and

property income where relevant

An emerging picture of UK interconnections

• visualisation – see Identifying sectoral interconnectedness in the UK economy

18

http://onsvisual.github.io/dvc317/sankey_instr/index.html

http://onsvisual.github.io/dvc317/sankey_instr/index.html

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/nationalaccountsarticlestheukflowoffundsproject/identifyingsectoralinterconnectednessintheukeconomy




The policy imperative:

• high quality flow of funds statistics are required to inform macro-prudential policy

• reduce risk of financial instability

• understand combined behaviour / interconnections between sectors and

instruments

• enable a more effective analysis of financial stability risk

• inform effective policy to alleviate these risks

But also...

• understanding market sector e.g. unsecured / secured loans

• how are businesses funding investment in financial and non-financial assets?

• what is the impact of changes in credit conditions?

• household wealth

• change in sources of financial wealth over time

• impact on savings and consumption

• shadow banking and alternative finance

• trends in growth of e.g. hedge funds, peer-to-peer lending

What can we use flow of funds for?

19

What do we want to do?

• improve the data in the visualisation:

• identify unknown counterparties

• more sector breakdowns

• more instrument breakdowns for w2w

• improved data sources, including for counterparty allocations

• meet need for these data identified by the Bank of England, IMF and Financial

Stability Board in the wake of the economic crisis

• deliver the IMF’s SDDS+ and G20 Data Gaps Initiative for the UK

• improve flexibility to new or ad hoc demands

• improve metadata

• improve access for researchers

20

Financial corporations and international interactions

are important to the UK

0 500 1000 1500

Financial corporations

General Government



Rest of the world

percent of nominal GDP

United States

United Kingdom Italy

Germany

France

Canada

source: OECD

Total asset levels as proportion of nominal GDP,

by G7 country and sector

21


Public corporations

Private corporations Non-commercial real estate SME Large

Commercial real estate Financial corporations Monetary Financial

Institutions (MFI) Central Bank

Other monetary financial institutions

Other deposit taking-corporations

Ring-fenced Other UK-owned Foreign-owned Money market funds (MMF) Financial corporations

except MFIs and Insurance corporations and pension funds (ICPFs)

Non-MMF investment funds

Collective investment schemes excl. hedge funds

Institutional Open-ended Leveraged

Unleveraged Closed-ended Leveraged Unleveraged Retail Open-ended Leveraged Unleveraged Closed-ended Leveraged Unleveraged Exchange traded funds Hedge funds Private equity

funds Buyout

Other Other financial

intermediaries, except MFIs and ICPFs

Financial vehicle corporations engaged in securitisation transactions Security and derivative dealers Financial

corporations engaged in lending

Include a split of type of lending e.g. mortgages, auto, consumer credit, business)

Specialised financial corporations (incl. central counterparties) Financial auxiliaries

Captive financial institutions and money lenders

Insurance companies and pension funds

Insurance companies Life insurance General insurance Pension funds Defined benefit Defined contribution General government Central government

Local government Social security funds (to be confirmed)

Households and NPISH Households

Non-profit institutions serving households (NPISH)

currently

published

to be published

2017

Enhanced

Financial

Accounts

proposals

22

Priorities issue sector(s)

whom-to-whom statistics for debt and equity securities all

more detailed sector breakdowns, especially other financial corporations all

private non-financial corporations: data quality improvement, industry

breakdowns private non-financial corporations

households: breakdown by income quintile, and breakdown of loans by

use households

who owns UK government debt? government + holders of

government debt

what proportion of UK assets are foreign-controlled? all

how big is the UK hedge fund sector? other financial institutions

other financial corporations, including shadow banking other financial institutions

breakdown of bank lending to the rest of the world by country monetary financial institutions

money market funds monetary financial institutions

alternative finance, e.g. peer-to-peer lending households, private non-financial

corporations, other financial

institutions 23

International context

• How do UK financial statistics compare with other G7 countries?

• What have we learned from other countries’ approaches to

financial accounts?

24

country Canada France Germany Italy Japan UK US UK Flow of

Funds proposals

name of

financial

accounts

outputs

Financial Flow

Accounts

Financial and

Wealth

Accounts

Financial

Accounts

whom-to-whom

statistics

Financial

Accounts

whom-to-whom

statistics

Financial

Accounts

whom-to-whom

statistics

Flow of Funds

Accounts

Statistics

Financial

Accounts Flow of Funds Flow of Funds

published

by Statistics

Canada Banque de

France Deutsche

Bundesbank Banca d'Italia Bank of Japan

Office for

National

Statistics

US Federal

Reserve Bank

Office for

National

Statistics

reporting

framework SNA2008

ESA10

Euro area

accounts

ESA10

Euro area

accounts

ESA10

Euro area

accounts

SNA1993

(SNA2008 from

March 2016) ESA10 SNA2008 ESA10

number of

sectors 30 15 15 15 45 11 (2017) 35 30 -40

instrument

breakdowns 40 37 37 37 51 37

33 (does not

include

financial

derivatives at

present)

additional

breakdowns by

type e.g. debt

securities,

secured /

unsecured

loans, purpose

of loans

breakdowns by

original and

residual maturity

whom-to-

whom

statistics? some key instruments key instruments key instruments

household

savings & loans

domestic debt

securities

limited in

financial

accounts

experimental

statistics cover

most financial

instruments

limited full counterparty

matrices

25

The EU picture – lessons learned

European Central Bank, Portugal, Austria, France, Ireland – visits in 2015

• other countries are already compiling from micro data and produce w2w statistics

• record-level databases are desirable, such as security-by-security databases

• the UK is unusual in that ONS, as the National Statistical Institution produces the

financial accounts, rather than the Central Bank

• unique international identifiers make compilation easier

firms: Legal Entity Identifier (LEI) and Euro Groups Register for firms

transactions: International Securities Identification Number (ISIN) can track both

issuers and holders

• a range of technology is used to compile financial accounts:

Excel, SAS, R, Python, and commercial database solutions

26

Enhanced Financial Accounts – the approach

• record-level data from administrative, regulatory and commercial data sources:

• reduces the burden on businesses

• more complete population coverage than sampled surveys -> robust estimates

of lower-level aggregates

• micro-prudential approaches can be based on the same record-level data as

aggregates to inform macro-prudential policy;

• higher-level aggregates will be based on the same data source as lower-level

data

• flexible to evolving requirements and ad hoc demands, without requiring the

lengthy process of survey (questionnaire) development.

• publish experimental statistics and working papers early and incrementally

• likely to be revisions and inconsistencies

• property income where relevant – e.g. dividends and interest

• new technology

27

Progress to date

date type item

13 Jul 2015 article Introduction, progress and future work

6 Nov 2015 article Comprehensive review of the UK financial accounts

10 Mar 2016 article Identifying sectoral interconnectedness in the UK economy

6 Nov 2015 experimental

statistics experimental flow of funds (whom-to-whom) statistics

12 Jan 2016 experimental

statistics Historical estimates of financial accounts and balance sheets

30 Jun 2016 improvement estimation of deposits with monetary financial institutions

30 Jun 2016 improvement levels of UK listed shares and mutual funds

30 Jun 2016 improvement levels of UK bonds

28

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/nationalaccountsarticles/2015-07-13

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/nationalaccountsarticles/theukflowoffundsprojectcomprehensivereviewoftheukfinancialaccounts





http://webarchive.nationalarchives.gov.uk/20160105160709/http:/www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm:77-410669





https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/nationalaccountsarticles/historicalestimatesoffinancialaccountsandbalancesheets

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/nationalaccountsarticles/historicalestimatesoffinancialaccountsandbalancesheets

2016 2017 2018 2019 2020

data acquisition, exploration and analysis

potential survey redevelopment and implementation

publication of experimental statistics and technical papers

build systems

incremental improvements to the National Accounts

full implementation into the National Accounts

data

acquisition

exercise full flow of

funds matrix

experimental

statistics

BB16 update

to flow of

funds

experimental

statistics

Timetable for delivery

29

2016 2017 2018 2019 2020

data acquisition, exploration and analysis

potential survey redevelopment and implementation

publication of experimental statistics and technical papers

build systems

incremental improvements to the National Accounts

full implementation into the National Accounts

data

acquisition

exercise full flow of

funds matrix

experimental

statistics

BB16 update

to flow of

funds

experimental

statistics

Timetable for delivery

30

Next steps

date item

14 July 2016 Economic Statistics Transformation Programme: Developing the

Enhanced Financial Accounts (UK Flow of Funds)

Economic Statistics Transformation Programme: Flow of funds - the

international context

8 August 2016 update the experimental flow of funds statistics

late summer 2016 historic household balance sheets, back to 1920s

autumn 2016 commercial data acquisition process

Blue Book 2017 revaluation and other changes in volume

number of economic sectors to increase from 9 to 11

31

Questions?

[email protected]


32



33

What’s New

Darren Morgan, National Accounts Coordination


34

Blue and Pink Book 2016


35

GDP Current Price (£m): previously published v

Blue Book 2016

Levels revised up, average per year:

1997-2009 +£49.6bn (4.3%), 2010-2014 +£9.1bn (0.6%), 2015 +£4.9bn (0.3%)

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2000000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Second estimate of GDP: Quarter 1 (Jan to Mar) 2016 Final Blue Book 2016 Current Price Estimates

36

GDP Current Price (%): previously published v

Blue Book 2016

……..but growth rates revised down, average per year:

1997-2011, -0.4 percentage points, 2012-2015 zero

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Revision Second estimate of GDP: Quarter 1 (Jan to Mar) 2016 Final Blue Book 2016 Current Price Estimates 37

Real GDP (%): previously published v Blue Book

2016

1998 to 2015: average growth unrevised at +2.0%

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Revision Second estimate of GDP: Quarter 1 (Jan to Mar) 2016 Final Blue Book 2016 Chained Volume Measure Estimates

38

Real GDP, Seas. Adj. (%): previously published v

Blue Book 2016

Q2 1997 to Q1 2016: average quarterly growth rate unrevised at +0.5%

average quarterly revision -0.01 percentage points, absolute revision 0.10 percentage points

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1997Q

2

1997Q

4

1998Q

2

1998Q

4

1999Q

2

1999Q

4

2000Q

2

2000Q

4

2001Q

2

2001Q

4

2002Q

2

2002Q

4

2003Q

2

2003Q

4

2004Q

2

2004Q

4

2005Q

2

2005Q

4

2006Q

2

2006Q

4

2007Q

2

2007Q

4

2008Q

2

2008Q

4

2009Q

2

2009Q

4

2010Q

2

2010Q

4

2011Q

2

2011Q

4

2012Q

2

2012Q

4

2013Q

2

2013Q

4

2014Q

2

2014Q

4

2015 Q

2

2015 Q

4

Revision Second estimate of GDP: Quarter 1 (Jan to Mar) 2016 Final 2016 Chained Volume Measure Estimates 39

GDP economic downturn and recovery

• 2008/09 downturn: same length and similar depth, was -6.1%, now -6.3%

• strength of recovery:

• GDP pre-downturn peak re-attained in Q3 2013, one quarter later

• in Q1 2016: GDP 7.0% above pre-downturn peak, was 7.2%

• in Q1 2016: GDP per capita 0.9% above pre-downturn peak, was 1.1%

40

Balance of Payments: Current Account (£m):

previously published v Pink Book 2016

-120000

-100000

-80000

-60000

-40000

-20000

0

20000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Revision Final Blue Book 2016 Current Price Estimates Quarter 4 (Oct-Dec) 2015 Current Price Estimates 41

Balance of Payments: Net International Investment

Position (£m): previously published v Pink Book 2016

-500000

-400000

-300000

-200000

-100000

0

100000

200000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015


Household and NPISH saving ratio (%): previously

published v Blue Book 2016

-2

0

2

4

6

8

10

12

14

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015


Economic Well Being (Q1 2013 = 100): latest indicators, Q1

2016

94

96

98

100

102

104

106

108

110

2013 2014 2015 2016

GDP per head

Real net national disposable income per head

Real gross household (only) disposable income per head

44

Impact of new HPI - price

45

Impact of new HPI - growth

46

Environmental Accounts - Woodland

The value of UK woodland was estimated at £6.4

billion in 2014

0

1000

2000

3000

4000

5000

6000

7000

2009 2010 2011 2012 2013 2014

Recreation Air filtration Carbon sequestration Biomass for timber

47

Use of VAT data - update

• Fifth article published 12 July

• significant changes to results systems required to deliver pilot in Sep 2016

• ONS developing new economic statistics results platform. current IT systems not part of long-term plans.

re-direct resources from tactical short-term aim to strategic delivery in the medium-term.

• pilot will not commence in September 2016 only ever tactical for 10 industries

• aim to use VAT turnover in National Accounts by the end of 2017 re-directing resources to exploit the new results platform

• in interim a series of research articles (start in September 2016) include VAT turnover data under development

clear commentary on methodological improvements required before use in 2017

48

https://www.ons.gov.uk/economy/grossdomesticproductgdp/methodologies/vatupdatejuly2016


Scope (key)

• Decoupling Households and Non-Profit Institutions Serving Households

• Increased detail in the financial sector

• Improved measurement of bonds and shares

• Incorporation of data from improved surveys

• New Construction Prices

• Introduction of more administrative data

49


Timing

• September 2017: GDP, Balance of Payments and UK Economic Accounts consistent with Blue/Pink Book

• Blue and Pink Book: October 2017

Communication

• Start in September 2016: similar approach to 2014 and 2015

50

Improved approach to publishing

economic statistics


51

Improved approach to publishing economic

statistics

Why?

• staccato approach: can lead to daily, and different(!), economic conclusions

• improve the quality of the product we ‘offer’‘

Key Proposals

• ‘six theme days’: Short term indicators, National Accounts/Balance of Payments, Public Finances, Labour Market, Inflation and Productivity

Index of Production, Construction Output, UK Trade, Turnover of Production and

Services Industries……and Index of Services?

Services Producer Price Indices and Index of Private Housing Rental

52


statistics

Key Proposals (cont.)

• improved ‘product’ quality

far shorter but more insightful statistical releases

overarching economic narrative on each theme day

‘state’ of the economy at the end of each month

• better accessibility

53


statistics

Benefits

• orderly, controlled release of data

• clearer, higher quality economic narrative

• earlier (mainly) release of data

• more coherent public discussion and economic debate

Timing of implementation

• working to January 2017

Next Steps

• short article setting out key changes

• notes on affected releases

• engage….. 54

What’s Next?

Dr Philip Wales, Head of Productivity


55

Outline

• Plans for Productivity Statistics

• Trends in self-employment

56

Productivity Plans

The measurement of productivity is at the heart of the Bean

Review:

‘The Review was prompted by the growing difficulty of measuring

output and productivity accurately in a modern, dynamic and

increasingly diverse and digital economy’

Bean (2016), paragraph 1.2

As published in the Economic Statistics and Analysis

Strategy (ESAS) and the recent Productivity Bulletin, ONS is

developing plans to implement the recommendations of Bean

(2016).

57

Productivity Plans

At the start of 2016, productivity publications involved:

• labour productivity bulletin (Q)

• Quality of labour input (QALI) (A)

• Volume index of capital services (VICS) (A)

• Multi-factor Productivity estimates (MFP) (A)

• Public Service Productivity (A)

As well as bi-annual international comparisons articles and

ad hoc micro-data analysis articles.

58

Productivity Plans

Key recommendations of Bean related to productivity (as

distinct from those relating to the measurement of output):

1. More agile, timely estimates of productivity

2. New measures of productivity

3. Greater use of existing micro-data sets

4. Exploit alternative sources of data

59

Productivity Plans

Over the coming year, ONS will:

1. Redevelop the existing labour productivity system

2. Multi-factor productivity

Timeliness

Granularity

3. Deliver quarterly estimates of public service productivity

60

Productivity Plans

Labour Prod.

Capital Prod.

QALI VICS MFP Int.

Comp. Regional

Prod. PSP

2016 8 July

6 October

2017 6 January

7 April

July

October

2018 January

April

61

Productivity Plans

4. Annual Respondents Database (ARD) development

5. Management Practices Survey

6. Administrative data for productivity analysis

7. Infrastructure statistics

62

Infrastructure

• Infrastructure is regarded as central to the productivity

performance of an economy: enabling the exchange of

goods, services and information in an efficient and cost-

effective manner.

• However, recent work by Grice et al (forthcoming) suggests

that there is relatively little quantitative evidence of:

(a) the flow of investment in infrastructure assets

(b) the resulting ‘stock’ of infrastructure assets, and

(c) the services which flow from this stock into production

63

Infrastructure

18%

28%

2%

52%

Energy,Water, Flood

Transport

Comms

Roads etc

Estimated composition of net infrastructure assets, 2014

Source: Grice et al. (forthcoming), based on Whole of Government Accounts 64

Infrastructure

• ONS proposes to undertake the work required to produce

estimates of the flows (investment and depreciation), stocks

and the services derived from infrastructure assets in the UK.

• Over the next few months ONS plans to seek user views as

to the potential uses and usefulness of these statistics. While

the potential application of these data to existing analyses of

productivity is clear, ONS would like to hear from potential

users of these data. A period of consultation on this work will

follow.

65

Self Employment

• While the measurement of the numerator – output – is key

for productivity, understanding changes in the denominator

are as important.

• The performance of the labour market has been one of the

defining characteristics of the UK’s recent economic

recovery. The strength of employment has been explained in

part by the growing number of self-employed workers.

• This trend was the subject of an article published by ONS

yesterday.

66

Self Employment – key findings

• Self employment has risen strongly – both in absolute

numbers of workers and as a share of total employment –

over recent years.

• This trend is one which pre-dates the economic downturn

itself. Part-time self-employment growth has been a key part

of this story

67

Self Employment

Source: ONS

Number of self employed workers (millions)

2.5

3.0

3.5

4.0

4.5

5.0

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Millions

68

Source: ONS

Share of self employed workers in total employment and self employed

hours in total hours (%)

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Self-employment share Ratio of self-employed hours in total hours

Self Employment

69

Contributions to the change in the share of employment accounted for by self

employment relative to 2007 (percentage points)

Source: ONS

Self Employment

70




over recent years.



of this story

• Key characteristics of the self-employed: tend to be older,

based in London and the South East, increasingly

concentrated in business services & finance.

71

Part-time self-employment Share of all employment by sex and age accounted for by PTSE male (Panel A),

female (Panel B) and total (Panel C), 2001, %

2015

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

16-24

25-34

35-44

45-54

55-64

65+

% of total employment

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

16-24

25-34

35-44

45-54

55-64

65+

% of total employment0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

16-24

25-34

35-44

45-54

55-64

65+


72

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

16-24

25-34

35-44

45-54

55-64

65+


0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

16-24

25-34

35-44

45-54

55-64

65+

% of total employment0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

16-24

25-34

35-44

45-54

55-64

65+


Part-time self-employment Share of all employment by sex and age accounted for by PTSE male (Panel A),

female (Panel B) and total (Panel C), 2015, %

2001 73




over recent years.



of this story

• Key characteristics of the self-employed: tend to be older,

based in London and the South East, increasingly

concentrated in business services & finance.

• A majority of these workers – in particular part-time self-

employed workers – appear broadly content with the labour

market status.

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Part time self employment Contributions to the growth of PTSE, by reason for working PT, 2001- 2015

75

Part time self employment

Change in part-time self-employment as a proportion of total employment, by job

seeking status, percentage points, relative to 2007

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Part-time self-employed flows

• One possible window on the quality of the labour which is flowing into the

part time self employed is to examine the earnings of those transitioning

between employment and self employment.

• Using the 5Q longitudinal datasets, we can compare the first-period

distribution of earnings among those who moved from employment to self

employment with those who move from one employee job to another over

the same time period.

Q1 Q5

pre-transition earnings

Newly PTSE

Newly PTEE

77

Part-time self-employed inflow: Median hourly earnings prior to transitioning into part-time self-employment and part-time

employee position

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

£ per hour Inflow: PTSE Inflow: PTEE

78


• Rise in self-employment due to net in-flows from

unemployment and other employment exceeding net

out-flow to inactivity

79


Gross inflow and outflow to and from PTSE as a fraction of all SE, rolling four

quarter average, %

0

1

2

3

4

5

6

7

1999 2001 2003 2005 2007 2009 2011 2013 2015

%

PTSE Inflow PTSE Outflow

80


Composition of the net flow by previous LM status, % of self employed, ages 16 to

69, percentage points

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

1999 2001 2003 2005 2007 2009 2011 2013 2015

U Inac EE FTSE Other PTSE: netflow

81


• Rise in self-employment due to net in-flows from

unemployment and other employment exceeding net

out-flow to inactivity

•Growing ‘churn’ between part- and full-time

• Consistent with workers changing their patterns of

retirement – moving to self-employment and particularly part-

time self-employment before becoming inactive.

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Questions ?

[email protected]

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economic forum; thursday 14 july 2016

Economy & Finance