The Labour Force Dynamics of the Marginally Attached*

Abstract

One of the most important measures of the state of the labour market is the unemployment rate. However, the standard definition of unemployment ignores an important group of people who are not employed but who want to work -the marginally attached workforce. The marginally attached are defined as those who are not employed, want to work but are not actively seeking work and therefore not classified as unemployed. The paper uses longitudinal data from the Survey of Employment and Unemployment Patterns (SEUP) to test whether the marginally attached are behaviourally distinct from the unemployed or those who are not attached to the labour force. We find that the labour force transitions of the marginally attached, on the whole, are between those of the unemployed and the unattached. Another finding is that the length of time over which the labour market dynamics are considered is crucial to our understanding of the labour market dynamics of the marginally attached. An implication of the findings of this paper is that a range of measures of potential labour supply should be considered, and that the measure used should depend on the specific question being asked.

Labour Underutilisation and Gender: Unemployment Versus Hidden-Unemployment

“…Limited work in Australia has also been carried out. Gray et al (2005) studying labour market transitions between 1994 and 1997 find that those who are marginally attached represent a distinctive labour market state, a finding also supported by the more recent work by Elliott and Dockery (2006). While most of these longitudinal studies do not focus specifically on gender, many do include gender as an independent variable in the analysis and are suggestive of gendered differences.…”

Exploring different measures of wage flexibility in a developing economy context: the case for Turkey

“…Jones and Riddell (1999) find that marginal attachment and non-attachment are distinct states and passive job search cannot be seen as a refrain from labor market attachment. Gray, Hunter, and Heath (2005) show that the marginally attached workers form a behaviorally distinct group and it emerges as a different category besides others. Garrido and Toharia (2004) conclude for Spain that although passive job seekers are behaviorally different than active seekers, they cannot be counted as inactive.…”

The ‘Peter Pan’ of Australian Economic Policy Research

“…However, in contrast to Indigenous Australians, many Maori have re‐found jobs after the 1991 recession. Put another way, Maori appear to be highly sensitive to the economic cycle (like many marginally attached groups, see Gray et al , 2005, for detailed description of labour market dynamics), but are obviously integrated into the New Zealand economy. Although Indigenous Australians also disproportionately concentrated among the ranks of the marginally attached and discouraged workers (Hunter & Gray, 2001), there appears to be no analogous trend for them to re‐enter the workforce during a prolonged period of macroeconomic growth.…”