On the measurement of unemployment

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.