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By What Measure? A Comparison of French and U.S. Labor Market Performance with New Indicators of Employment Adequacy

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  • David R. Howell
  • Anna Okatenko

Abstract

The unemployment rate is conventionally relied upon to measure national employment performance, and has been the main indicator justifying comprehensive labor market reforms, generally in the direction of deregulation and benefit reduction. The starting point of this working paper is that a well-functioning labor market should produce not just enough jobs, but enough “decent” jobs. We compare U.S. and French performance according to three indicators, calculated from each country’s main household survey for 1993-2005 by age, gender and education group. With low wages defined as less than 2/3 of the full-time median and inadequate hours defined as working involuntarily part-time, we calculate: 1) the low-wage share of employment; 2) the underemployed share of the labor force; and 3) the adequately employed share of the working age population. France performs well above the U.S. on all three indicators, particularly for less-educated workers, and the French advantage has grown substantially since the late 1990s. In 2005 the underemployed share of the male labor force with less than a high school degree was 64% in the U.S. and just 23% in France; for the female labor force, these figures were 84% in the U.S. and 41% in France. The adequately employed share of the prime-age (25-54) population with just a high school degree was 64% for U.S. men and 80% for French men; among women, these rates were 39% for the U.S. and 63% for France. These results indicate that accounting for adequate pay and hours of work has large effects on the measurement of labor market performance. The authors conclude by recommending that indicators such as these, and not just the unemployment rate, should have a central place in discussions of national labor market reform.This paper was revised in November 2008.

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Bibliographic Info

Paper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp174_revised.

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Date of creation: 2008
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Handle: RePEc:uma:periwp:wp174_revised

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Keywords: labor supply; labor demand; wages; unemployment;

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References

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  1. David BESCOND & Anne CHÂTAIGNIER & Farhad MEHRAN, 2003. "Seven indicators to measure decent work: An international comparison," International Labour Review, International Labour Organization, vol. 142(2), pages 179-212, 06.
  2. Lucie Davoine & Christine Erhel, 2006. "Monitoring Employment Quality in Europe: European Employment Strategy Indicators and Beyond," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00272015, HAL.
  3. Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
  4. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas," Economic Policy, CEPR & CES & MSH, vol. 21(45), pages 5-59, 01.
  5. Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, 01.
  6. Stephen R. G. Jones & W. Craig Riddell, . "The Measurement Of Unemployment: An Empirical Approach," Canadian International Labour Network Working Papers 09, McMaster University.
  7. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Economics Department Working Papers 486, OECD Publishing.
  8. Dharam GHAI, 2003. "Decent work: Concept and indicators," International Labour Review, International Labour Organization, vol. 142(2), pages 113-145, 06.
  9. Howell David R. & Baker Dean & Glyn Andrew & Schmitt John, 2007. "Are Protective Labor Market Institutions at the Root of Unemployment? A Critical Review of the Evidence," Capitalism and Society, De Gruyter, vol. 2(1), pages 1-73, May.
  10. David Howell, 2005. "Beyond Unemployment," Challenge, M.E. Sharpe, Inc., vol. 48(1), pages 5-28, January.
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Cited by:
  1. Philippe Askenazy & Eve Caroli & Jérôme Gautié, 2009. "Un panorama des bas salaires et de la qualité de l'emploi peu qualifié en France," PSE Working Papers halshs-00567693, HAL.
  2. Carola Grün & Wolfgang Hauser & Thomas Rhein, 2010. "Is Any Job Better than No Job? Life Satisfaction and Re-employment," Journal of Labor Research, Springer, vol. 31(3), pages 285-306, September.
  3. David R. Howell, 2010. "Institutions, Aggregate Demand and Cross-Country Employment Performance: Alternative Theoretical Perspectives and the Evidence," Working Papers wp228, Political Economy Research Institute, University of Massachusetts at Amherst.

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