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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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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. 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.
  2. Coles, Melvyn & Petrongolo, Barbara, 2003. "A Test between Unemployment Theories Using Matching Data," IZA Discussion Papers 723, Institute for the Study of Labor (IZA).
  3. Jones, S.R.G. & Riddell, W.C., 1993. "The Measurement of Unemployment: An Empirical Approach," UBC Departmental Archives 93-48, UBC Department of Economics.
  4. 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.
  5. 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.
  6. Blanchard, Olivier Jean & Diamond, Peter, 1992. "The Flow Approach to Labor Markets," American Economic Review, American Economic Association, vol. 82(2), pages 354-59, May.
  7. 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.
  8. Coles, Melvyn G & Smith, Eric, 1994. "Marketplaces and Matching," CEPR Discussion Papers 1048, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. Elena Stancanelli, 2007. "Evaluating the impact of the French tax credit on the employment rate of women," Documents de Travail de l'OFCE 2007-33, Observatoire Francais des Conjonctures Economiques (OFCE).
  2. Lene Kromann, 2009. "Does Employee Body Weight Affect Employers' Behavior?," Economics Working Papers 2009-04, School of Economics and Management, University of Aarhus.
  3. Yashiv, Eran, 2006. "U.S. Labor Market Dynamics Revisited," IZA Discussion Papers 2455, Institute for the Study of Labor (IZA).
  4. Per Krusell & Toshihiko Mukoyama & Richard Rogerson & Aysegul Sahin, 2009. "A Three State Model of Worker Flows in General Equilibrium," NBER Working Papers 15251, National Bureau of Economic Research, Inc.
  5. 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.
  6. Aysit Tansel & H.Mehmet Tasçi, 2010. "Hazard Analysis Of Unemployment Duration By Gender In A Developing Country: The Case Of Turkey," Working Papers 2010/6, Turkish Economic Association.
  7. Tindara Addabbo & Anna Maccagnan, 2011. "The Italian Labour Market and the Crisis," Center for the Analysis of Public Policies (CAPP) 0086, Universita di Modena e Reggio Emilia, Dipartimento di Economia Politica.
  8. Andrea Brandolini & Piero Cipollone & Eliana Viviano, 2006. "Does The Ilo Definition Capture All Unemployment?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 153-179, 03.
  9. Riddell, W. Craig & Song, Xueda, 2011. "Education, Job Search and Re-employment Outcomes among the Unemployed," IZA Discussion Papers 6134, Institute for the Study of Labor (IZA).
  10. Katharine Bradbury, 2006. "Measurement of unemployment," Public Policy Brief, Federal Reserve Bank of Boston.
  11. Di Addario, Sabrina, 2011. "Job search in thick markets," Journal of Urban Economics, Elsevier, vol. 69(3), pages 303-318, May.
  12. Peder Pedersen & Torben Schmidt, 2011. "What is unemployment in Europe? Concepts and measurement in the European community household panel," Empirical Economics, Springer, vol. 40(3), pages 705-728, May.
  13. Gürbüz, Ayça Akarcay & Polat, Sezgin & Ulus, Mustafa, 2013. "Should I stay or should I go? Exploring transition to discouragement," GIAM Working Papers 13-4, Galatasaray University Economic Research Center.
  14. Alena Bicakova, 2006. "Market vs. Institutions: The Trade-off Between Unemployment and Wage Inequality Revisited," Economics Working Papers ECO2006/31, European University Institute.

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