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Does the ILO Definition Capture All Unemployment?

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  • Andrea Brandolini

    ()
    (Bank of Italy, Economic Research Department)

  • Piero Cipollone

    ()
    (Bank of Italy, Economic Research Department)

  • Eliana Viviano

    ()
    (Bank of Italy, Research Department, Milan Branch)

Abstract

The labour market status of many non-working 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 ILO definition of unemployment. In this paper we examine by non-parametric 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 non-participants. 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 only available in the Italian Labour Force Survey to derive a measure of search intensity which 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.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 529.

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Date of creation: Dec 2004
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Handle: RePEc:bdi:wptemi:td_529_04

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Keywords: unemployment; ILO classifications; transition probabilities;

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  1. Stephen R. G. Jones & W. Craig Riddell, . "The Measurement Of Unemployment: An Empirical Approach," Canadian International Labour Network Working Papers 09, McMaster University.
  2. Guiso, Luigi & Parigi, Giuseppe, 1996. "Investment and Demand Uncertainty," CEPR Discussion Papers 1497, C.E.P.R. Discussion Papers.
  3. 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.
  4. Stephen R. G. Jones & W. Craig Riddell, 2006. "Unemployment and Nonemployment: Heterogeneities in Labor Market States," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 314-323, May.
  5. Christopher J. Flinn & James J. Heckman, 1982. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," NBER Working Papers 0979, National Bureau of Economic Research, Inc.
  6. 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.
  7. Karen Mumford & Peter N. Smith, . "The Hiring Function Reconsidered: On Closing The Circle," Discussion Papers 96/45, Department of Economics, University of York.
  8. 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.
  9. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
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