Small Area Labour Markets

Recent changes to the geographic structure 

As of the September quarter 2023 edition of SALM, the SA2 estimates are now based on the Australian Bureau of Statistics (ABS) 2021 Australian Statistical Geography Standard (ASGS).

Due to changes in the ASGS between the 2016 and 2021 editions, there are a number of breaks in the series for SALM estimates at both the SA2 and LGA level. For more information, please see the SALM 2021 ASGS Changeover Guide in the Geography section of the SALM Methodology page.

Methodology improvements/series revisions

The September quarter 2024 release of SALM introduces an improved approach to using Estimated Resident Population (ERP) data to model the labour force at the SA2 level. The new process smooths the impact of changes in the SA2 population between each annual ERP release by incrementally phasing in the population data over the year, using a weighted average of the relevant ERP figures. For more information about the methodology underpinning this process, please contact the SALM inbox at SALM@jobsandskills.gov.au.

The impact on the SALM estimates for the vast majority of regions is negligible, with the improvements largely occurring in the unsmoothed series. For those regions with large population changes between ERP estimates, however, this approach improves the quality of their labour force and unemployment rate estimates. The SALM data have been revised back to the December quarter 2010 in the smoothed series and the March quarter 2010 in the unsmoothed series to reflect these changes.

Changes to mutual obligation requirements in some areas

Mutual obligation requirements are tasks and activities that people agree to undertake while they are receiving certain types of income support, including the JobSeeker Payment and Youth Allowance (other). From time-to-time, and for a range of reasons, these requirements can be suspended. During the September quarter 2021, for example, mutual obligation requirements were temporarily paused in areas affected by the Delta COVID-19 variant and associated lockdowns. More recently, mutual obligation requirements have also been suspended in various regions affected by natural disasters.

The suspension of mutual obligation requirements can have an impact on the SALM data. This is because the ABS only considers someone to be unemployed if they are actively looking for work. When mutual obligation requirements are suspended, it is possible that some job seekers may not have undertaken the job search that they normally would have, in which case they would be classified as not in the labour force rather than unemployed.

For more information on mutual obligation requirements, please see the Services Australia website.

Using SALM data - with caution

When using and interpreting SALM data

• Be aware movements may reflect statistical volatility rather than underlying changes in the labour market 
• Always use the latest SALM publication
• Where possible, use year-on-year comparisons
• Where possible, use the smoothed estimates
• Be aware that SALM smoothed estimates lag changes in labour market conditions
• Do not derive employment estimates
• Use other data sources in addition to SALM

SALM data can be volatile

Unemployment and unemployment rate estimates at the SA2 and LGA level can be volatile. This is especially the case for SA2s and LGAs that are located within a Statistical Area Level 4 where the ABS Labour Force Survey (LFS) data are also highly volatile. SALM users should take particular care where:

• There are large movements in SALM data
• SA2s and LGAs have a small labour force (less than 1000)

Always use the latest SALM publication, even for earlier periods

Always use the current SALM publication, as SALM data, even for earlier periods, can be revised.

The ABS rebenchmarks its LFS estimates on a quarterly basis to ensure that they are based on the most up-to-date population information. These revisions are reflected in the latest SALM estimates.

When new Census benchmarks become available, SALM estimates are revised back a number of years to reflect these new benchmarks.

Where possible, use year-on-year comparisons

Quarterly movements in the SALM data may not reflect actual changes in the labour market. We recommend considering year-on-year comparisons in the data.

Where possible, use the smoothed estimates

We recommend that SALM users analyse the smoothed SALM data, given the high degree of volatility that is inherent in small area estimates.

SALM smoothed estimates lag changes in labour market conditions

The smoothed SALM series is created by applying an average to four quarters of unsmoothed data. This means that changes in the smoothed SALM series will lag actual changes in labour market conditions.

While the unsmoothed data are likely to be more responsive to changes in labour market conditions, they are also subject to high levels of statistical variability.

Interpret the unsmoothed SALM series with caution. Even large movements could reflect statistical variability rather than actual changes in labour market conditions.

Do not derive employment estimates

It is not appropriate to derive employment from the figures in SALM. See the SALM Methodology page for more details.

Use other data sources in addition to SALM

We recommend that users also consider other sources of information at the small area level. This is particularly the case for SA2s exhibiting high levels of volatility. Other useful sources of data include:

• The ABS Census of Population and Housing
• Income support payment data