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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Find related papers by JEL classification: C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
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Coles, Melvyn G & Smith, Eric, 1998.
"Marketplaces and Matching,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 239-54, February.
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