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Reconciling workless measures at the individual and household level: theory and evidence from the United States, Britain, Germany, Spain and Australia

  • Paul Gregg
  • Rosanna Scutella
  • Jonathan Wadsworth

Individual and household based aggregate measures of worklessness can, and do, offer conflicting signals about labour market performance. We outline a means of quantifying the extent of any disparity, (polarisation), in the signals stemming from individual and household-based measures of worklessness and apply this index to data from 5 countries over 25 years. Built around a comparison of the actual household workless rate with that which would occur if employment were randomly distributed over household occupants, we show that in all the countries we examine, there has been a growing disparity between the individual and household based workless measures. The polarisation count can be decomposed to identify which household groups are exposed to workless concentrations and can also be used to test which individual characteristics account for any excess worklessness among these household groups. We show that the incidence and magnitude of polarisation varies widely across countries, but that in all countries polarisation has increased. For each country most of the discrepancies between the individual and household workless counts stem from within-household factors, rather than from changing household composition.

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File URL: http://eprints.lse.ac.uk/19954/
File Function: Open access version.
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 19954.

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Length: 45 pages
Date of creation: May 2004
Date of revision:
Handle: RePEc:ehl:lserod:19954
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Web page: http://www.lse.ac.uk/

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  1. Peter Dawkins & Paul Gregg & Rosanna Scutella, 2002. "Employment Polarisation in Australia," Melbourne Institute Working Paper Series wp2002n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  2. Danziger, Leif & Katz, Eliakim, 1996. "A theory of sex discrimination," Journal of Economic Behavior & Organization, Elsevier, vol. 31(1), pages 57-66, October.
  3. Jo Blanden & Paul Gregg & Lindsey MacMillan, 2007. "Accounting for Intergenerational Income Persistence: Noncognitive Skills, Ability and Education," School of Economics Discussion Papers 0307, School of Economics, University of Surrey.
  4. Elizabeth Clark-Kauffman & Greg J. Duncan & Pamela Morris, 2003. "How Welfare Policies Affect Child and Adolescent Achievement," American Economic Review, American Economic Association, vol. 93(2), pages 299-303, May.
  5. Paul Gregg, 1996. "It Takes Two: Employment Polarisation in the OECD," CEP Discussion Papers dp0304, Centre for Economic Performance, LSE.
  6. repec:nsr:niesrd:72 is not listed on IDEAS
  7. Juhn, Chinhui & Murphy, Kevin M, 1997. "Wage Inequality and Family Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 72-97, January.
  8. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 546-72, July.
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