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Unemployment and the Composition of Labour Slack: An International Comparison
Author(s) -
Neubourg Chris
Publication year - 1990
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.1990.tb00231.x
Subject(s) - unemployment , economics , labour economics , labour supply , unemployment rate , construct (python library) , macroeconomics , computer science , programming language
The present statistical apparatus allows us to construct a single indicator of the degree of non‐utilisation of labour resources that mitigates the shortcomings of the traditional unemployment rate. This paper defines a method to measure aggregate labour slack, and applies it to post‐1973 data for four countries: Canada, the Netherlands, Sweden and the U.S.A. The estimates take into account non‐utilised labour resources due to unemployment, to changes in the number of hours actually worked and to changes in registered labour force participation. Since changes in and the manipulation of working time schedules on the one hand, and of labour supply on the other, have become more frequent over the last few decades, it is highly relevant to investigate international and intertemporal differences in the non‐utilisation of labour resources by means of a ratio that accounts for these changes. Unemployment is ill‐suited for this purpose, and therefore a labour slack estimate is constructed, which takes working time developments and changes in labour force participation into consideration. The estimate is cyclically more sensitive and more internationally comparable than the traditional unemployment rate.