4 ms·

Little known fact on unemployment: https://en.wikipedia.org/wiki/Unemployment#Limitations_of_definition https://en.wikipedia.org/wiki/Unemployment#Limitations_

by guerby 6y ago

Little known fact on unemployment: https://en.wikipedia.org/wiki/Unemployment#Limitations_of_definition https://en.wikipedia.org/wiki/Unemployment#Limitations_of_de... "For the fourth quarter of 2004, according to OECD (Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the US and 7.4% in France. At the same time and for the same population, the employment rate (number of workers divided by population) was 86.3% in the US and 86.7% in France. That example shows that the unemployment rate was 60% higher in France than in the US, but more people in that demographic were working in France than in the US, which is counterintuitive if it is expected that the unemployment rate reflects the health of the labour market." More unemployment by the official measure (normalized OECD) but ... more people working relative to given population.

oconnor663 6y ago
Is this because the denominator for the unemployment rate (but not the employment rate) is specifically people looking for work?
- guerby 6y ago
  Yes, unemployment is 1 - employed / (employed + looking for work), "looking for work" is really hard to measure objectively (changing a word or order of words in the question asked in the survey change it by quite a bit). employed in a given group / total population of a given group is more objective. There's still a bit of hacking of this one with for example "non institutionalized population" excluding people in jail (not negligible in the USA) https://www.census.gov/glossary/#term_Civiliannoninstitutionalizedpopulation https://www.census.gov/glossary/#term_Civiliannoninstitution... What baffles me is that there's no deep study of the "inactive" population, while the number of inactive has been raising continously for a few decades now in the USA, yellow line here: http://guerby.org/images/bls-men-25-54-200912.png http://guerby.org/images/bls-men-25-54-200912.png Understanding what the inactive are doing is probably key to understand current time (un)employment.
bovine3dom 6y ago
I'm not sure this is that unintuitive once you know what unemployment means technically: the key aspect of the definition of unemployment is that to be unemployed you have to be actively searching for work. If more of your population is actively searching for work, as opposed to less, it stands to reason that more people might eventually find work.
- guerby 6y ago
  Then you may have to question "lower unemployment is better": for example is the explanation for the France/USA unemployment difference that more USA people have completely given hope of finding a work and are rejected by society? In the media it's always "super high unemployment in old Europe, super good low unemployment in the USA".
  - bovine3dom 6y ago
    My hunch is that the USA has low employment due to its terrible healthcare for poor people; I get the impression that people there get sick and then fall out of the labour market permanently. I think we may be consuming different media. The narrative I hear is (prepandemic) "the UK has record low unemployment but this is bad because it is low quality work with high underemployment".

by guerby 6y ago

oconnor663 6y ago

Is this because the denominator for the unemployment rate (but not the employment rate) is specifically people looking for work?

guerby 6y ago
Yes, unemployment is 1 - employed / (employed + looking for work), "looking for work" is really hard to measure objectively (changing a word or order of words in the question asked in the survey change it by quite a bit). employed in a given group / total population of a given group is more objective. There's still a bit of hacking of this one with for example "non institutionalized population" excluding people in jail (not negligible in the USA) https://www.census.gov/glossary/#term_Civiliannoninstitutionalizedpopulation https://www.census.gov/glossary/#term_Civiliannoninstitution... What baffles me is that there's no deep study of the "inactive" population, while the number of inactive has been raising continously for a few decades now in the USA, yellow line here: http://guerby.org/images/bls-men-25-54-200912.png http://guerby.org/images/bls-men-25-54-200912.png Understanding what the inactive are doing is probably key to understand current time (un)employment.

bovine3dom 6y ago

I'm not sure this is that unintuitive once you know what unemployment means technically: the key aspect of the definition of unemployment is that to be unemployed you have to be actively searching for work. If more of your population is actively searching for work, as opposed to less, it stands to reason that more people might eventually find work.

guerby 6y ago
Then you may have to question "lower unemployment is better": for example is the explanation for the France/USA unemployment difference that more USA people have completely given hope of finding a work and are rejected by society? In the media it's always "super high unemployment in old Europe, super good low unemployment in the USA".
- bovine3dom 6y ago
  My hunch is that the USA has low employment due to its terrible healthcare for poor people; I get the impression that people there get sick and then fall out of the labour market permanently. I think we may be consuming different media. The narrative I hear is (prepandemic) "the UK has record low unemployment but this is bad because it is low quality work with high underemployment".