Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?

Flinn, Christopher J.; Heckman, James J.

doi:10.1086/298002

Cited by 283 publications

(157 citation statements)

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“…Flinn and Heckman (1983) analysed conditional and unconditional transition probabilities between the two states and concluded that they are essentially different. In the United Kingdom, however, Joyce, Jones, and Thomas (2003) found that many subgroups of the inactive have the same transition probability to employment as the unemployed.…”

Section: Disaggregating Inactivitymentioning

confidence: 99%

Labour market flows: Facts from the United Kingdom

2012

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This paper documents a number of facts about worker gross flows in the United Kingdom for the period between 1993 and 2010. Using Labour Force Survey data, I examine the size and cyclicality of the flows and transition probabilities between employment, unemployment and inactivity, from several angles. I examine aggregate conditional transition probabilities, job-to-job flows, employment separations by reason, flows between inactivity and the labour force and flows by education. I decompose contributions of job-finding and job-separation rates to fluctuations in the unemployment rate. Over the past cycle, the job-separation rate has been as relevant as the job-finding rate.JEL Classification: E24; J60.

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Section: Disaggregating Inactivitymentioning

confidence: 99%

Labour market flows: Facts from the United Kingdom

2012

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“…Those who do not report looking for work in the past four months are then asked "even though you were not looking for work in the four weeks ending Sunday, would you like to have a regular paid job at the moment" -using this question one can divide the non-searchers into two categories -those who do not want work and those who do 4 . Of course, one might wonder what exactly it means to want work in an abstract sense but not search for it but, in practice, those who report they do want work are more likely to enter employment than those who do not want work even though neither group is recorded as searching for work in the past 4 weeks (see Flinn and Heckman, 1983; Jones and Riddell, for statistical attempts to discriminate between these different labour market states). I think it is probably best to think of those who want work but have not searched in the past 4 weeks as having a low level of search activity (e.g.…”

Section: Datamentioning

confidence: 99%

You can't always get what you want: The impact of the UK Jobseeker's Allowance

Manning

2009

Labour Economics

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In 1996 the UK made major changes to its welfare system for the support of the unemployed with the introduction of the Jobseeker's Allowance. This tightened the work search requirements needed for eligibility for benefit. It resulted in large flows out of claimant status, but, this paper concludes, not into employment. The movement out of claimant status was largest for those with low levels of search activity. But, this paper finds no evidence of increased job search activity as a result of this change.

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“…The logic of what we do closely resembles previous work by Flinn and Heckman (1983), Jones and Ridell (1999) and Brandolini et al (2004). As the approach taken in this paper, the above mentioned research looks for behavioural similarities between some benchmark groups whose labour market state is known on the one hand, and groups whose labour market state is unclear on the other.…”

Section: General Set-upmentioning

confidence: 65%

Choosing among alternative classification criteria to measure the labour force state

Battistin¹,

Rettore²,

Trivellato³

2005

Working Paper Series

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Current labour force counting relies on general guidelines set by the International Labour Office (ILO) to classify individuals into three labour force states: employment, unemployment and inactivity. However, the resulting statistics are known to be sensitive to slight variations of operational definitions prima facie consistent with the general guidelines. In this paper two alternative classification criteria are considered: a 'strict' criterion followed by Eurostat, which results from a stringent interpretation of the ILO guidelines, and a 'mild' criterion followed by the Italian Statistical Office up to 1992. We first show that the labour force statistics resulting from the two classification criteria differ considerably. We then discuss the relative merits of the two criteria by comparing those individuals whose classification depends on the criterion adopted to individuals whose classification is common across criteria. Similarities are established with respect to characteristics known to be relevant to the labour force state to assess which benchmark group individuals whose state is questionable look like the most. An application is presented to samples of married women from the Italian Labour Force Survey from five survey occasions between 1984 and 2000. Results are neatly in favour of the 'mild' criterion and are rather robust to changes in the business cycle, the participation rate, local labour market conditions and the questionnaire design. 1 EXECUTIVE SUMMARYCurrent labour force counting relies on general guidelines set by the International Labour Office to classify individuals into three labour force states: employment, unemployment and inactivity. However, the resulting statistics are known to be sensitive to slight variations of operational definitions prima facie consistent with the general guidelines. It follows that the operational criterion adopted does matter, changing the pattern of unemployment and participation rates over time and attenuating or emphasizing differences across regions. For this reason, the issue of measuring unemployment has been given considerable attention in several countries. For example, the Bureau of Labor Statistics in the United States adopted since the late 70s a set of alternative unemployment indicators, known as U1-U7. The topic has been reconsidered in the mid 90s, when a new set of alternative measures has been introduced. The same problem has been carefully dealt with also in the United Kingdom, with emphasis on the production of survey-based monthly rates.In this paper two alternative classification criteria are considered: a 'strict' criterion followed by Eurostat, which results from a stringent interpretation of the guidelines set by the International Labour Office, and a 'mild' criterion followed by the Italian Statistical Office up to 1992. We first show that the labour force statistics resulting from the two classification criteria differ considerably. We then discuss the relative merits of the two criteria by comparing those individuals whose...

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Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?

Abstract: This paper formulates and tests the hypothesis that the categories unemployed and out of the labor force are behaviorally distinct labor force states. Our empirical results indicate that they are. In the empirically

Cited by 283 publications

References 4 publications

Labour market flows: Facts from the United Kingdom

Labour market flows: Facts from the United Kingdom

You can't always get what you want: The impact of the UK Jobseeker's Allowance

Choosing among alternative classification criteria to measure the labour force state

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