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Unemployment and Non-Employment: Heterogeneities in Labour Market States

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  • Stephen R.G. Jones
  • W. Craig Riddell

Abstract

Determining how to distinguish between unemployment and non-participation is important and controversial. The conventional approach employs a priori reasoning together with self-reported current behaviour. This paper employs an evidence-based classification of labour force status using information about the consequences of the behaviour of the nonemployed. We find that marginal attachment—defined as desiring work, although not searching—is a distinct labour market state, lying between those who do not desire work and the unemployed. Furthermore, there are important heterogeneities within these non-employment states. Two subsets of non-participants—both engaged in “waiting”—display behaviour similar to the unemployed.

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File URL: http://socserv.mcmaster.ca/econ/rsrch/papers/archive/2002-05.pdf
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Bibliographic Info

Paper provided by McMaster University in its series Department of Economics Working Papers with number 2002-05.

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Length: 46 pages
Date of creation: May 2002
Date of revision:
Handle: RePEc:mcm:deptwp:2002-05

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  1. Olivier Jean Blanchard & Peter Diamond, 1992. "The Flow Approach to Labor Markets," NBER Working Papers 4000, National Bureau of Economic Research, Inc.
  2. Stephen R. G. Jones & W. Craig Riddell, 1999. "The Measurement of Unemployment: An Empirical Approach," Econometrica, Econometric Society, vol. 67(1), pages 147-162, January.
  3. Melvyn Coles & Barbara Petrongolo, 2003. "A Test Between Unemployment Theories Using Matching Data," CEP Discussion Papers dp0570, Centre for Economic Performance, LSE.
  4. 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.
  5. Coles, Melvyn G & Smith, Eric, 1994. "Marketplaces and Matching," CEPR Discussion Papers 1048, C.E.P.R. Discussion Papers.
  6. Stephen R. G. Jones & W. Craig Riddell, 1998. "Unemployment and Labor Force Attachment: A Multistate Analysis of Nonemployment," NBER Chapters, in: Labor Statistics Measurement Issues, pages 123-155 National Bureau of Economic Research, Inc.
  7. Kim B. Clark & Lawrence H. Summers, 1979. "Labor Market Dynamics and Unemployemnt: A Reconsideration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(1), pages 13-72.
  8. 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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