Exact Unemployment Rate Indices
Conventional unemployment rate measures tend to overestimate the degree of labor underutilization if unemployment disproportionately affects less educated and generally less productive workers. Based on index number theory as well as on econometric techniques, this article proposes a number of alternative measures that are exact for specific labor aggregator functions. The results for the United States show that the conventional, unweighted unemployment rate overestimates the true rate by about 0.6 of a percentage point, or by almost 14%. Copyright 2003 Western Economic Association International.
Year of publication: |
2003
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Authors: | Greenwood, Michael J. ; Kohli, Ulrich |
Published in: |
Contemporary Economic Policy. - Western Economic Association International - WEAI, ISSN 1074-3529. - Vol. 21.2003, 2, p. 218-226
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Publisher: |
Western Economic Association International - WEAI |
Saved in:
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