Abstract
This paper investigates how alternative measures of unemployment may be derived from information on unemployment duration. It begins by listing various properties that unemployment indices should satisfy, and shows how ‘duration profiles’ can usefully represent unemployment data. Theorem 1 establishes that unemployment indices are unanimous iff the duration profiles do not intersect. Two families of unemployment indices are examined in detail. Both allow unemployment to be decomposed across population subgroups. In addition, they can be expressed as the product of three components reflecting the contributions of the unemployment rate, mean unemployment duration, and differences in duration among the unemployed.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Aczel, J.: Lectures on Functional Equations and Their Applications. Academic, New York (1966)
Akerlof, G.A., Main, B.G.M.: Unemployment spells and unemployment experience. Am. Econ. Rev. 70, 885–893 (1980)
Akerlof, G.A., Main, B.G.M.: An experience-weighted measure of employment and unemployment duration. Am. Econ. Rev. 71, 1003–1011 (1981)
Atkinson, A.B.: On the measurement of inequality. J. Econ. Theory. 2, 244–263 (1970)
Clark, K.B., Summers, L.H.: Labor market dynamics and unemployment: a reconsideration. Brookings Pap. Econ. Act. 1, 13–72 (1979)
Cowell, F.A., Kuga, K.: Additivity and the entropy concept: an axiomatic approach to inequality measurement. J. Econ. Theory. 25, 131–143 (1981)
Disney, R.: Recurrent spells and the concentration of unemployment in Great Britain. Econ. J. 89, 109–119 (1979)
Foster, J.E., Shorrocks, A.F.: Poverty orderings and welfare dominance. Soc. Choice Welf. 5, 179–188 (1988)
Hurd, M.: A compensation measure of the cost of unemployment to the unemployed. Q. J. Econ. 94, 225–243 (1980)
Kaitz, H.B.: Analyzing the length of spells of unemployment. Mon. Labor Rev. 93, 11–20 (1970)
Paul, S.: An illfare approach to the measurement of unemployment. Appl. Econ. 24, 739–743 (1992)
Marshall, A.W., Olkin, I.: Inequalities: Theory of Majorization and Its Applications. Academic, New York (1979)
Salant, S.W.: Search theory and duration data: a theory of sorts. Q. J. Econ. 91, 39–57 (1977)
Sen, A.K.: Poverty: an ordinal approach to measurement. Econometrica 44, 219–231 (1976)
Sen, A.K.: Issues in the measurement of poverty. Scand. J. Econ. 81, 285–307 (1979)
Sengupta, M.: Unemployment Duration and the Measurement of Unemployment. Mimeo, University of Canterbury, New Zealand (1990)
Shorrocks, A.F.: The class of additively decomposable inequality measures. Econometrica 48, 613–625 (1980)
Shorrocks, A.F.: Ranking income distributions. Economica 50, 3–17 (1983)
Shorrocks, A.F.: Inequality decomposition by population subgroups. Econometrica 52, 1369–1385 (1984)
Shorrocks, A.F.: Spell Incidence, Spell Duration and the Measurement of Unemployment. J. Econ. Inequal. (2008, in press). doi:10.1007/s10888-008-9090-3
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Shorrocks, A. On the measurement of unemployment. J Econ Inequal 7, 311–327 (2009). https://doi.org/10.1007/s10888-008-9089-9
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10888-008-9089-9