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Does The Ilo Definition Capture All Unemployment?

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  • Andrea Brandolini

    (Bank of Italy.)

  • Piero Cipollone

    (Bank of Italy. piero.cipollone.)

  • Eliana Viviano

    (Bank of Italy.)

Abstract

The labour market status of many nonworking persons is at the boundary between unemployment and inactivity. Like the unemployed, they seek and are available for work; unlike them, their last search action was not recent enough to meet the International Labour Office definition of unemployment. In this paper we examine by nonparametric tests how the transition probabilities of these out-of-the-labour-force job seekers differ from those of the unemployed as well as the other nonparticipants. First, using data from the European Community Household Panel, we show that in most EU countries these job seekers constitute a distinct labour market state. Second, we rely on information available only in the Italian Labour Force Survey to derive a measure of search intensity that we use to break down the out-of-the-labour-force job seekers. On the basis of their transition probabilities, the most active are indistinguishable from the unemployed. (JEL: J64, J22, R23) Copyright (c) 2006 by the European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 4 (2006)
Issue (Month): 1 (03)
Pages: 153-179

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Handle: RePEc:tpr:jeurec:v:4:y:2006:i:1:p:153-179

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  1. Luigi Guiso & Giuseppe Parigi, 1999. "Investment And Demand Uncertainty," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 185-227, February.
  2. Flinn, Christopher J & Heckman, James J, 1983. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 28-42, January.
  3. Mumford, Karen & Smith, Peter N, 1999. " The Hiring Function Reconsidered: On Closing the Circle," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 343-64, August.
  4. Stephen R. G. Jones & W. Craig Riddell, . "The Measurement Of Unemployment: An Empirical Approach," Canadian International Labour Network Working Papers 09, McMaster University.
  5. Sergi Jiménez-Martín & Franco Peracchi, 2002. "Sample attrition and labor force dynamics: Evidence from the Spanish labor force survey," Spanish Economic Review, Springer, vol. 4(2), pages 79-102.
  6. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
  7. Garrido, Luis & Toharia, Luis, 2004. "What does it take to be (counted as) unemployed? The case of Spain," Labour Economics, Elsevier, vol. 11(4), pages 507-523, August.
  8. Stephen R.G. Jones & W. Craig Riddell, 2002. "Unemployment and Non-Employment: Heterogeneities in Labour Market States," Department of Economics Working Papers 2002-05, McMaster University.
  9. Füsun Gönül, 1992. "New Evidence on Whether Unemployment and out of the Labor Force are Distinct States," Journal of Human Resources, University of Wisconsin Press, vol. 27(2), pages 329-361.
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