Unemployment Indicators

Footnotes to the appendix

"Constance Sorrentino, “International comparisons of unemployment indi-
cators,” Monthly Labor Review, March 1993, pp. 3-24.

2 Ibid., pp. 19-24.

> Labour Force Survey: Results, 1992 (Luxembourg: Office for Official
Publications of the European Union, 1994), p. 10.

“However, persons only looking at advertisements in newspapers or journals
are counted as unemployed in the 1992 and earlier European Union sur-
veys. Such a form of job search is not enough for classification as unem-
ployed in the United States, but it is in Canada, where those who employ
‘only this method account for about 5 percent of the unemployed. In the
European Union countries, indications are that this group is also in the 5-
percent range of the unemployed. No adjustment has been made on this
point for Canada or the European Union countries. (Although for Italy,
because the group is relatively large, an adjustment is made to exclude
passive jobseekers from U~S and add them to U-7 prior to 1992; for 1992.

50 Monthly Labor Review August 1995.

and 1993, data on such persons continue to be collected even though they
are no longer counted as unemployed in the U-5 measure. For those 2
years, BLS has added them to U-7 without needing to subtract them from
U-S.) In Japan, the number of passive jobseekers—mainly persons await-
ing the results of having applied for a job— is also large, and an adjust-
ment is made to exclude them from U-5 and add them to U-7.

5 Sorrentino, “International comparisons,” p. 21.

® In January 1994, the U.S Current Population Survey definitions were
changed to require a job search on the part of persons waiting to start a new job
within 30 days. However, the data used in this article are not adjusted to the
new U.S, concept, but remain in accord with the concepts in place prior to
1994.

*Report on the Special Survey of the Labour Force Survey (Japanese Statis-
tics Bureau, Management and Coordination Agency, 1994)



Unemployment indicators

Chart 2, Elements of labor underutilization, averages of available years, 10 countries, 1983-93

Percent Percent
20 20
Part time for Discouraged workers
@ Unemployed |_| ‘economic reasons (not available for Germany)
15
10
5
°
United States Australia Sweden Germany Netherlands
Canada Japan France ttaly United Kingdom

cent in 1992 to 6.8 percent in 1993, but the involuntary part-
time and discouraged worker rates remained the same. Thus,
improvement in the labor market was first seen in the unem-
ployment rate, but other forms of labor underutilization re-
mained high. In previous years, when the declines in unem-
ployment rates were greater, these other forms also moved
downward.

Sweden's sharp upward trend in unemployment in the
early 1990’s was accompanied by significant increases
in both involuntary part-time and discouraged workers.
The unemployment rate in 1993 was more than 4 times
as high as the rate in 1987, while the discouraged worker
rate in 1993 was 2-1/2 times the rate in 1987, The invol-
untary part-time rate was about 40 percent higher in 1993
than in 1987,

Unified Germany’s upward movement in unemployment
was accompanied by increases in involuntary part-time work-
ers. Prior to 1992, the rate of those working part time for
economic reasons moved narrowly and was generally 1 per-
cent or less of the labor force. In 1992-93, for unified Ger-
many, the rate rose to more than 1 percent of the labor force.
(No data on discouraged workers were available for Ger-
many for the entire period studied.)

44 Monthly Labor Review August 1995.

Sweden's labor market programs

Sweden has been a pioneer in the provision of labor mar-
ket programs for retraining and employing the unemployed.”
These programs have been used as an economic instrument
for countercyclical purposes. For many years, the programs
helped keep Swedish unemployment low, even during eco-
nomic downturns. However, as Swedish unemployment rose
to unprecedented postwar levels in the early 1990's, the num-
ber of persons participating in the programs increased, but
they could no longer hold down unemployment, as they had
in previous, milder recessions. Even after completing the
programs, participants could not find work, due to a lack of
job creation in Sweden.

A special unemployment rate can be constructed to take
into account Sweden’s labor market programs, which absorb
a substantial number of potentially unemployed persons. In
1993, when the conventionally unemployed in Sweden to-
taled 415,000, there were, on average, about 220,000 per-
sons in these programs. Without such programs, most of
these individuals would probably have been either unem-
ployed or discouraged workers.

Sweden's U-S rate of 9.3 percent in 1993 would have risen



GER Continued—Altemative unemployment indicators, U-1 to U-7, 10 countries, available years, 1983-93

[in percent]
Country and year ut ue rx) U4 us us ur
Continued-—France
76 45 77 97 95 nz 18
75 45 77 97 93 13 15
75 59 a7 108 10.4 127 129
a5 69 96 - 424 15 145 147
() 0) iv) QO 0} «) 0)
54 0) 58 0 67 () 10)
56 24 62 65 69 72 0)
55 23 63 62 67 70 10)
56 25 67 65 69 73 “)
52 24 62 59 64 67 ()
46 17 58 53 58 60 (0)
40 1.3 50 48 49 52 ()
32 14 42 40 at 45 ()
50 36 64 64 64 7A (0)
64 44 78 73 77 88 0)
Italy
68 8 33 74 72 97 15.9
72 7 37 79 76 103 16.1
73 8 39 80 77 10.1 16.0
73 6 43 80 78 10.0 158
63 5 38 69 6s a5 138
64 6 ag 7.0 68 9.0 15.0
80 14 6.0 o5 95 "5 62
9.3 19 68 10.4 10.4 127 18.0
10.4 () 95 1.6 re)
() iv) ) «) y 0) ”
92 () as 10.2 108 12.4 124
() () iv) ” 0) v) ()
78 () 80 78 10.0 125 13.4
75 12 ai 75 95 12.4 13.3
69 ia 78 69 88 18 128
59 6 69 58 78 10.5 114
53 6 64 55 7.4 10.2 109
9.0 ) 85 13.0 4 134 13.9
87 3. 86 12.5 11.0 13.0 138
94 28 95 125 1.5 13.3 144
89 27 95 128 116 13.4 143
85 26 96 122 44 13.0 136
68 24 78 97 a1 106 4
52 15 66 80 74 87 94
47 14 61 75 70 et a4
58 26 73 96 86 10.3 106
74 40 84 115 98 122 128
a2 42 88 124 10.3 13.1 138
"Not available, U-6, rate encompassing persons working part time for economic reasons;
“Break in series for Italy. New survey methods were introduced in 1982 that _U-7, U-6 plus discouraged workers.
raised the adjusted U-6 rate by approximately 1 percentage point. SOURCE: Compiled by Bureau of Labor Statistics from labor force surveys for
NOTE: |U-1, long-term unemployment rate; U-2, job loser rate; U-d, adult each country. Some adjustments are made for comparabilly with U.S. conoepts,
unemployment rate; U~4, full-time unemployment rate; U-5, conventional rate;

Monthly Labor Review August 1995 35



Unemployment indicators

Revision for France. For France, in the 1993 study, a proxy had
to be used for “persons working part time because they could not
find full-time work,” a component of persons working part time for
economic reasons (involving calculations of U-4, U-6, and U-7).
The proxy was the number of persons working part time who
worked their usual (or more) hours and who were seeking another
or a second job, The 1993 article had noted that “‘this proxy under-
states the true number to the extent that persons working part time
involuntarily did not seek more work.”> In 1992, an actual figure
for the group working part time because they could not find a full-
time position became available from the French labor force survey,
as reported to EUROSTAT. The new data revealed that the proxy se-
verely understated the size of this group: instead of the 276,000
persons indicated by the proxy, 852,000 persons were enumerated
as working part time because they could not find a full-time posi-
tion. Using the actual figure, BLS raised U-6 from 11.6 percent to
12.7 percent in 1992 and moved U-7 up from 11.7 percent to 12.9
percent. U-4, the unemployment rate applicable to persons seek-
ing full-time jobs, was revised downward from 11.2 percent to 10.8
percent because the level of the full-time labor force was increased
by the revision. (The full-time labor force includes all persons work-
ing part time for economic reasons.) A similar downward revision
was indicated by the 1993 figures. An adjustment was made for all
years from 1983 to 1991, based on the 1992 proportions.

Revision for the United Kingdom. The British Department of Em-
ployment alerted BLS to an error in the calculation of data on dis-
couraged workers reported to EUROSTAT. This error has now been
corrected by the Department, and the revised figures were sup-
plied to BLS for all years relevant to the study. The effect of the
revision was small, lowering the 1989 U-7 rate from 9.3 percent to
9.1 percent.

Revisions for Japan. Consultation with the Japanese Statistics
Bureau and statistics available for the first time in the 1994 survey
Tesulted in some revisions to the Japanese data. The following three
revisions were made:

* Previously, the entire National Defense Force was subtracted
from the labor force in the surveys, to arrive at the civilian labor
force. However, members of the National Defense Force who
reside in private households are included in the surveys, and
they amount to about half of the total National Defense Force.
Therefore, only half of the National Defense Force should be
subtracted from the reported labor force.

* A previous adjustment to the Japanese data added all per-
sons, except students, waiting to start a new job within 30
days to the unemployed, for comparability with U.S. con-
cepts.© This adjustment was too high, because some of these
persons were not available to begin work, a requirement
under U.S. concepts, and no information was available on
their number. The February 1994 Report on the Special Sur-
vey of the Labour Force Survey provided such information
for the first time, indicating that about half of the persons
enumerated as waiting to start a new job in March (exclud-
ing students) were not available for work in February.”
Therefore, BLS has excluded half of these persons from the
adjustment in all years of the study period.

* The method of allocating “jobseekers not in the labor force”
according to whether they were seeking full-time or part-
time work was modified, on the advice of the Japanese Sta-

48 Monthly Labor Review August 1995

tistics Bureau. The result was an increase in the number of
persons seeking a full-time job and a decrease in the num-
ber of persons seeking a part-time job.

The overall effect of these changes was small, lowering both the
Japanese conventional unemployment rate and the alternative in-
dicators by no more than one-tenth of 1 percentage point in some
years and leaving them unchanged in most years.

A more significant change is the BLS revision of the data on dis-
couraged workers used in the U-7 rate for Japan. Discouraged
workers are not enumerated as such in the Japanese survey. In the
1993 study, BLS constructed an estimate of discouraged workers
under U.S. concepts by summing the following groups: (1) all per-
sons who were not in the labor force, who wanted work but were
not seeking it because there was “no prospect of finding a job,” and
who said that they were available to take a job if they found one;
(2) half of the persons who were not in the labor force, who wanted
work but who were not seeking work because there was “no pros-
pect of finding a job,” and who were either not available or unde-
cided about their availability for work if offered a job; and (3) half
of the persons enumerated as unemployed, but who were not seek-
ing work in the past 4 weeks because they were awaiting the re-
sults of previous job applications. The rationale for half-weighting
groups (2) and (3) was that they seemed to only partially fit the
US. concept of discouraged workers.

In the current study, BLS has reconsidered the treatment of groups
(2) and (3). This reevaluation led to the elimination of group (2)
and the inclusion of all persons in group (3), rather than only half
of them, in the estimate of discouraged workers for Japan. Overall,
the revised method resulted in a decrease of about 0.7 percentage
point in Japan’s U~7 rate: the rate published for 1990 in the 1993
article was 7.2 percent, and it decreased slightly to 7.1 percent due
to the preceding three revisions. The rate decreased further to 6.4
Percent with the changes in the method of determining the number
of discouraged workers.

Some discussion of the U.S. method of enumerating discouraged
workers prior to 1994 is necessary to explain the reasons behind
the elimination of group (2). All persons not in the labor force are
first asked, “Do you want a regular job now, either full or part
time?” All who respond “Yes” or “Maybe, it depends” are then
asked why they did not look for work in the previous 4 weeks, If
multiple responses are given, reasons indicating that respondents
are not discouraged take precedence over reasons indicating that
they are. For example, if the multiple responses are “believes no
work is available” and “in school,” the respondent is not classified
as discouraged. Thus, an implied availability test is built into the
classification method.

In the Japanese survey, persons not in the labor force are first
asked whether they want work. The question is phrased as follows:
“Do you wish to do any work for pay or profit?” Those responding
“Yes” or “Yes, if conditions are favorable” are then asked why they
are not looking for work. Unlike the U.S. survey, which allowed
multiple responses, the Japanese survey permits only one response.
Presumably, the response given is the main reason why the person
is not seeking work. Thus, all respondents who indicate that they
are discouraged (“no prospect of finding a job”) are potentially
discouraged under U.S. concepts.

The Japanese survey then asks an explicit question about the
respondent's availability: “If you find a job now, can you take it
up?” Possible responses to this question are “Yes, immediately,”
“Yes, but later,” and “No or undecided.” The main point to note is
that the U.S. survey had an implied availability requirement, while


Unemployment Indicators

U-1 (long-duration unemployment) rates, compared with
U-S, than did men in those countries that were not mem-
bers of the European Union. Within the Union, except for
the United Kingdom, the differences between U-1 and U-S
were about the same for men as for women. In all the coun-
tries, the job loser rate (U-2) was more favorable for women
than for men, compared with U-S. With few exceptions,
adult unemployment rates (U-3) and full-time unemploy-
ment rates (U-4) had similar relationships to U-5 for both
men and women.

Greater sex-related differences showed up in the expanded
rates. In every country studied except Italy, underutilization,
as measured by U-6 and U-7, increased to a considerably
greater extent for women than it did for men, and in Sweden
and Japan in particular, the difference was very large. (See

table 3.) In Sweden, the U-7 rate increased just 50 percent
for men, but about 2-1/2 times for women, over the U-5
rate. In Japan, U-7 for men was more than double the U-5
rate, but for women it was more than 4 times as great as
U-5. In Italy, the ratios of U-6 to U-5 were virtually the
same for both sexes, but the spread at U—7 was less favor-
able for women. These tendencies generally held during re-
cession and recovery alike.

Rankings

Table 4 ranks the 10 countries examined in terms of each of
the seven indicators, from lowest (best) to highest (worst), on
average, over the available years of the 1983-93 period. Japan’s
labor market outperformed the others with regard to every

Hable 4 | Rankings of 10 countries from lowest to highest average rate, available years, 1963-93

Rank U-1 u-2 v3 U4 Us Vs U7
Both
sexes
1. 1.2 | Japan 0.6| Japan 1.9] Japan 1.9] Japan 2.4| Japan 3.3} Japan 73
2 17 | Italy 9] Sweden 2.7|Sweden 3.9| Sweden 3.6| Germany 6.6) Sweden 75
3. 20|Netherlands _9|Italy 45|Germany 5.9| Germany 6.2| Sweden 6.7|United States 10.1
4. 4.6 | Sweden 2.2|United States §.4/ United States 6.5|United States 6.8|United States__9.2|United Kingdom 12.3
5. 5.0 | Germany 2.4|Germany 6.1|Netherlands 7.9 Italy 8.0] Italy 10.2| Australia 12.4
B vase 5.3 | United Kingdom 2.7] Australia 6.4] Italy 8.1] Australia 8.6] Australia 11.2|Netheriands 12.4
T sone | Italy 7.3 | Australia 3.1| France 7.8| Australia 8.5|Netherlands © 9.4/Netherfands —_11.7/France 127
8 ......|United Kingdom 7.5 | United States 3.5/Netherlands —7.9|Canada 9.7|Canada 9.8] United Kingdom 11.7| Canada 13.0
9 wu. {Netherlands 7.6 | France 46| United Kingdom 8,2) France 10.4] United Kingdom 9.9| Canada 12.3}taly 159
10. France 8.1 | Canada 5.5| Canada 8.5) United Kingdom 11.0 France: 10.0) France 12.3|Germany )
Men
4 ee. | dapan 1.2 | Japan .7\Japan .7| Japan 1.9| Japan 2.1] Japan 2.7} Japan 43
2 2.0 | Italy B)ltaly 8| Sweden 4.1]Sweden 4.1) Germany 5.5| Sweden 62
3... | United States 2.6 | Nethertands _9|Netheriands —_.9| Germany 5.2|Germany 5.2) Sweden 5.5|Netherlands 9.0
4 sou | Germany 42 | Germany 2.2|Germany 22\naly 5.8| Italy 5.7/ttaly 7.5|France 92
5 ew | Canada 4.8 | Sweden 2.6|Sweden 3.0] United States 6.5|United States 6.9|Netherlands 8.7|United States 9.5
6 ae | Italy 5.2 | United Kingdom 3.7|United Kingdom 3.7|Netheriands 7.3|Netherlands —7.7| United States 8.8/Italy 10.3
7 snvee | Australia 5.6 | Australia 3.9] Australia 3.9 Australia 8.3| France 8.0|France 9.2| Australia 106
8...... Netherlands 6.3 | United States 4.3/United States 4.3} France 8.4) Australia 8.5| Australia 10.1] Canada 19
9... | France 6.4 | France 43)France 4.3/Canada 9.6, Canada 9.9|Canada 11.3| United Kingdom 12.3
10. .... | United Kingdom 8.5 | Canada 6.5|Canada 6.5| United Kingdom 11.1 United Kingdom 10.7| United Kingdom 11.7/ Germany 0)
Women|
Japan 1.3 | Japan .5|Sweden 2.3| Japan 2.0| Japan 2.8| Japan 4.3|Sweden o4
Sweden 1.4 | Italy 9] Japan 2.4}Sweden 3.5] Sweden 3.6| Sweden 8.2|United States 10.9
United States 1.8|Netherlands —_.9|United States 5.3|United States 6.5|United States 6.7/Germany 8.6| Japan 18
Canada 4.3 | United Kingdom 1.4] Australia 6.3|Germany 7.4|Germany 7.6| United States _9.7| United Kingdom 12.4
Australia Sweden 1.7(Italy 7.2| Australia 9.2| Australia 8.8] United Kingdom 11.7, Canada 147
Australia 2.0) United Kingdom 7.3!Netherlands 9.4] United Kingdom 8.8) Australia 13.0) Australia 16.5
Germany 2.6|Germany 7.7| Canada 9.8|Canada 9.9 Canada 13.7| France 17.4
United States 2.6)Canada 8.7| United Kingdom 10.71 Italy 12.0} aly 15.7|Netherlands 19.2
Canada 4.3| France 98} Italy 13.1|Netherlands —12.2| France 16.7|Italy 25.7
France 5.1|Netherlands —11.0France 13.6| France 12.4|Netherlands —17.9|Germany 0)
* No data available to rank Germany.
NOTE: See table 2 for available years for each indicator.
SOURCE: Table 2.
—

40 Monthly Labor Review August 1995.



Hable 2 try unemployment indicators, U-1 to U-7, 10 countries, average rates for available years, 1963-93

* Data not available.

* Former West Germany, 1985-91; unified Germany, 1992-93.

{in percent)
Country Yeors WwW v2 v3 U4 us wo 7
Both sexes
United States .. 1983-93 22 35 54 65 68 92 10.1
1983-93 46 5.5 85 97 98 12.3 13.0
1983-93 53 13.4 64 65 86 12 12.4
1984-93 12 6 19 18 24 33 73
1987-93 17 22 27 39 3.6 67 75
1983-93 at 46 78 10.4 10.0 123 2127
1985-93 50 24 64 59 62 66 (“
1985-91 48 19 58 56 60 63 6
Unified Germany 1992-93 56 40 7A 72 7A 8.0 “)
Italy .. 1986-93 73 9 45 at 80 10.2 15.9
Netherands 1983, 1985,
1987-91 78 *9 79 79 94 "7 12.4
United Kingdom .. 1983-93 18 "27 82 1.0 99 7 123
Men
26 43 54 65 69 8.8 95
48 65 81 96 99 13 19
5.6 13.9 64 83 85 10.4 106
12 7 17 1.9 24 27 43
20 26 3.0 44 44 55 62
43 62 84 8.0 9.2 292
2.2 5.0 52 52 55 (
19 48 50 51 52 ()
32 57 57 58 63 ¢)
8 3.0 58 57 75 103
63 59 62 73 77 87 9.0
85 °a7 89 14 107 "7 12.3
1.8 26 53 65 67 97 10.9
43 43 87 98 99 13.7 147
48 12.0 63 9.2 88 13.0 15.5
13 8 24 20 28 43 1B
14 17 23 35 36 82 at
10.3 51 98 13.6 12.4 16.7 217.4
61 26 77 74 78 86 ()
58 19 73 68 73 81 1)
7.0 51 91 9.7 88 10.6 ()
1.2 9 72 13.4 12.0 157 25.7
96 9 11.0 94 122 179 192
United Kingdom . 1983-93 60 4 73 107 88 17 12.4
11987-93, *1988-91.
* 1089-93, 1984-93,

SOURCE: Compiled by Bureau of Labor Statistics from labor force surveys for
each country. Some adjustments are made for comparability with U.S. concepts.

Monthly Labor Review August 1995 37



Unemployment Indicators

Alternative unemployment indicators, U-1 to U-3 and U-5 to U-7, six countries, 1983-93

United States Australla
Percent Percent
18 18
Ut U2 US U5 U6 U7
ish -— ee 15

3 oo mae, :
L 1 1 1 , 1 f : A A fl fl
1983 ««1985=s«1987/-S «198919911993 1989 «1985S 1987198919919
Japan France

Percent Percent
18 18
15 15
12 °
ob
6b
3b
ol a nopeeeegenegiey f f f f f f

1983 1985S «1987 19891994 1983 «1985 = «1987'S s«1989=S« 1991 +=‘ 1993

Italy ‘Sweden

Percent Percent
18 18
16} 15+
1a ° 12h
oF le
ef ef
3h 3b
ol fl fl

1983 1985 «1987 1991 1993 1983 «1985.

— ——=

36 Monthly Labor Review August 1995



the Japanese survey actually asks explicitly whether a person could
take up a job now if he or she found one.

‘The U.S. and Japanese questions are clearly different, and a decision
must be made on the best match with the U.S. concept. BLS decided
that the responses “Yes” and “Yes, if conditions are favorable” to the
first question in the Japanese survey approximate the responses “Yes”
and “Maybe, it depends” to the first question in the U.S. survey. Of
those who answer in either of the two ways mentioned in the Japanese
survey, all who further respond “no prospect of finding a job” and
also respond “Yes, immediately” or “Yes, but later” are taken to be
discouraged workers under U.S. concepts. The group responding
“Yes, but later” is included because these are persons who would
accept a job now to start ater. It is likely that a person in this situation
would have been enumerated as discouraged in the U.S. survey.
However, those responding “no or not decided” to the last question in
the Japanese survey Would probably not have been counted as
discouraged in the United States, as those who meant “no” would not
be counted because they were not available. Those who were not
sure of their availability (“not decided”) would most likely not be
Classified as discouraged under the U.S. concept either, because they
were undecided about their availability rather than about their desire
for a job. They are apparently interested in having a job at some time,
but are not sure they would accept a job now even if one were offered.
This implies a stage of labor force inactivity that lies beyond the
scope of being a discouraged worker under U.S. concepts.

Consider now the group of persons who are classified as unem-
ployed in the Japanese survey, but were not considered unemployed
under U.S. concepts because they were not actively seeking work
in the past 4 weeks. Instead, they were awaiting the results of pre-
vious job applications. BLS subtracts this group from U-5S. Mem-
bers of the group are in a situation somewhere between unemploy-
ment and discouragement. Some may be discouraged, while others
are waiting for developments in the process of job selection, but
are ready and willing to go to work now. These latter individuals,
as well as those who were truly discouraged, should be fully, rather
than partially, counted in a measure of underutilization, and it was
decided to count them fully in the U-7 measure.

Break in series and adjustments for Sweden. In 1993, the
measurement period for the Swedish labor force survey was
changed to represent all 52 weeks of the year, rather than 1 week
each month, and a new adjustment for population totals was
introduced. The impact was to raise the unemployment rate by
approximately 0.5 percentage point. One reason for the increase
is that the prior surveys for the month of June were taken in a
week before students were out of school; now all weeks in June
are surveyed, and school leavers seeking vacation work are
included in the unemployed. Other school vacation or holiday
periods are also more completely covered by the new survey. As
aresult, youth unemployment moved upward more sharply in 1993
than would have been the case under the previous surveys.
Statistics Sweden has published adjustment factors for 1987-92
in considerable detail, and BLS has applied these factors to arrive
at adjusted figures for these years.

Data needed to adjust the Swedish data on discouraged workers
to U.S. concepts are not published. Statistics Sweden has provided
unpublished data to BLS for the years 1989 and 1991-93. Figures
for the other years were estimated on the basis of proportions emerg-
ing from these data. .

In Sweden, the concept that corresponds to “discouraged worker”
is latent arbetssokande, or “potentially looking for a job.” Falling
into this category are persons who wanted work and were available
for work in the reference week, but who were not seeking work for

reasons related to the labor market (for example, because no suitable
work was available locally or because they thought they had little
chance of finding work), One of the reasons listed in the Swedish
survey is “never got around to looking for work.” In addition, under
Swedish definitions, full-time students who were currently available
and actively seeking work during the school term are included in the
concept of latent arbetssokande. Both of these groups have been
excluded from the discouraged worker count for comparability with
US. concepts. The students (published data on their numbers are
available each year) have been reclassified as unemployed under the
definition of U-5, while people who “never got around to looking for
work” (number provided by Statistics Sweden for 1989 and 1991-93
and estimated by BLS for other years) remain outside the labor force.

The adjustment for students is normally small, but in 1993 it be-
came more significant because of both the general rise in Swedish
unemployment and the changes in the Swedish survey’s timing. In
1993, the adjustment resulted in an increase in the Swedish U-S rate
from 8.1 percent to 9.3 percent. Before 1992, the number of students
looking and available for work during the school term was very small
each year,

In addition to the preceding adjustments for historical compara-
bility, several small adjustments were made to the Swedish data on
persons working “part time for economic reasons,” for comparabil-
ity with U.S. concepts. For the 1993 study, Statistics Sweden pro-
vided BLS with unpublished tabulations of adjusted data for 1989.
Because the adjustments were very small, BLS has applied the 1989
proportions to adjust data for the other years.

Australia. The Australian Bureau of Statistics compiled the data for
the U-1 to U-7 indicators for this article based on specifications
supplied by the Bureau of Labor Statistics. The data are annual aver-
ages for the period 1983-93 derived from the monthly labor force
survey. The Australian survey is very close in concepts and defini-
tions to the U.S, labor force survey, and no adjustments were made to
any of the indicators for comparability with U.S. concepts.

There is a slight understatement of persons working part time for
economic reasons in the Australian statistics because the category
“bad weather and plant breakdown” could not be divided into two
separate subcategories. Working part time because of “bad
weather” is not considered an economic reason in the U.S. survey,
while doing so because of a “plant breakdown” is an economic
reason. On the advice of the Australian Bureau of Statistics, BLS
decided to exclude the entire category.

Data on discouraged workers in Australia were available not for
every month, but generally only for March and September of cach
year. The Australian Bureau of Statistics annualized the semian-
nual figures for this study. Data for job losers (U-2) were available
only from 1987 onward, because no such data were collected in the
earlier years.

The appendix to the 1993 study included a tabulation showing,
for each country, the significant aspects of coverage and reliability
of the labor force surveys used to calculate the alternative indica-
tors. The following tabulation gives similar data for Australia, re-
lating to the year 1989:

Number of households in sample: 30,903
Number of persons in sample: 66,769

Sampling ratio: 0.5 percent

Origin of sampling frame: population census
Unemployment rate, 1989: 6.2 percent

One standard error: 6.1 percent to 6.3 percent
Two standard errors: 6.0 percent to 6.4 percent.

Monthly Labor Review August 1995 49



FEE Aternatve unemployment indicators, U-1 to U-7, 10 counties, average ratios of each Indicator to U-5 for available

years, 1983-93,
{in percent]
‘Country Years vr ve UA3 ua U5 Us U7
Both sexes
1983-93 32 54 79 6 400 135 149
1983-93 47 56 87 99 100 126 133
Australia .. 1983-93 62 136 74 99 100 190 144
Japan .. 1984-93 50 25 79 79 100 138 904
‘Sweden 1987-93 47 61 5 108 100 186 208
European Union:
France 1983-93 a 46 78 104 100 123 "127
Germany? 1985-93 8 39 98 95 100 106 i)
West Germany 1985-91 80 92 7 93 100 105 (‘
Unified Germany 79 56 100 101 100 113 0)
” " 56 101 100 128 199
at 510 a4 84 100 124 132
76 “27 83 "1 100 18 124
38 62 78 96 100 128 138
48 66 a2 97 100 14 120
66 148 75 98 100 119 125
87 8 90 100 129 205
49 6 73 100 100 134 151
80 54 78 105 100 115 7115
81 42 96 100 100 106 iv
80 37 94 98 100 102 10)
Unified Germany 76 55 98 98 100 109 10)
Italy... 1986-93 1 14 53 102 100 192 181
Netherlands 1983, 1985,
82 $12 at 95 100 13 117
79 *35 a3 104 100 109 118
av a9 79 97 100 145 163
43 43 88 99 100 138 148
55 123 72 105 100 148 176
46 18 88 71 100 154 421
39 47 64 97 100 228 253
European Union:
France . 83 a 73 no 100 135 7140
80 a4 101 97 100 113 1
79 26 100 93 100 111 i
80 58 103 110 100 120 4
93 a 60 109 100 131 214
1983, 1985,
1987-91 79 "7 90 7 100 147 157
1983-93 68 16 83 122 100 133 141
* 1987-93 #1984-93,
2 1989-93. SOURCE: Compiled by Bureau of Labor Statistics from labor force surveys
* Former West Germany, 1985-91; unified Germany, 1992-93. for each country. Some adjustments ara made for comparability with U.S.
“Data not available. concepts,
*1988-91.

Monthly Labor Review August 1995 39



Constance
Sorrentino

Constance Sorrentino is
an economist in the
Division of Foreign La-
bor Statistics, Bureau of
Labor Statistics.

Unemployment Indicators

International unem
indicators, 1983-93

Sweden has the largest increase

ployment

in labor underutilization for 1983-93
when part-time work for economic reasons

is taken into account; Japan’s rate

increases most when discouraged workers are added

U-1 to U-7, for nine major industrial

‘countries were presented in the March
1993 issue of the Monthly Labor Review.' The
data in the initial analysis covered just the year
1989, The indicators have a large cyclical com-
ponent, and international relationships might
change, depending on the phase of the business
cycle in each country. To investigate these rela-
tionships further, this article presents data for a
series of years, spanning relatively high and low
unemployment periods from 1983 to 1993.

The sequence of indicators U-1 to U-7 illus-
trates a range of unemployment measures going
from a very narrow to a very broad view. Under
this framework, U-S is the official, usually cited
U.S, unemployment rate, referred to as the con-
ventional measure here. U-1 through U-4 nar-
row in on certain types of unemployment that
reflect parts of U-5, while U-6 and U-7 portray
broader concepts of underutilization than U-5,
respectively bringing into consideration persons
working part time for economic reasons and dis-
couraged workers.

In general, this article reinforces the findings
of the 1993 one. The principal finding of that
study was that Japan and Sweden, the countries
with the lowest unemployment rates as conven-
tionally measured, had by far the largest in-
creases when the definition was expanded to in-
clude persons working part time for economic
reasons and discouraged workers. This contin-
ued to be the case. The current study shows that,

Sc unemployment indicators, known as

in times of recession and recovery alike, the
Japanese unemployment rate consistently tripled
when these additional measures of underutili-
zation of labor were incorporated. For Sweden,
the most inclusive indicator more than doubled
until 1992-93, when labor market conditions de-
teriorated drastically and the conventional rate
jumped sharply, resulting in some closing of the
differential between the conventional and ex-
panded rates.

Sweden’s unemployment rate, which was the
lowest of all countries in the earlier study, has
subsequently risen to unprecedented postwar lev-
els due to a severe recession. In 1993, Sweden's
unemployment rate of 9.3 percent, as conven-
tionally defined, surpassed the U.S. rate for the
first time. Understanding the effect of Sweden’s
pioneering programs for retraining and employ-
ing the unemployed is important to gaining an
appreciation of that country’s labor market situ-
ation. The addition of persons in labor market
programs further increased Sweden's already
high 1993 conventional unemployment rate to
14 percent. Of course, other countries have per-
sons in labor market programs, but their pro-
portion of the labor force is small compared with
Sweden’s.

In the earlier study, Sweden maintained the low-
est rates for most of the indicators, even when la-
bor market program participants were added. In
this new study, Japan replaces Sweden as the coun-
try with the best labor market performance across
the entire spectrum of indicators in 1992-93.

Monthly Labor Review August 1995 31



Unemployment Indicators

had unemployment rates in the 5-percent range. This
figure stands out because none of the other countries
studied had an unemployment rate for new entrants
exceeding 2 percent during the period.

Among the European Union countries, only France had
a pattern similar to North America’s, with job losers bear-
ing the brunt of unemployment among the four catego-
ties listed. The 1993 study postulated that this was be-
cause 1989 was a year of high unemployment for France,
and job losses tend to be cyclical. However, even in
France’s years of lower unemployment during the 1980's,
the higher job Joser rates persisted. West Germany had
the more typical European Union pattern in most years,
with job losers having rates similar to or lower than those
of job leavers. Nonetheless, unified Germany experienced
much higher job loser rates compared with the other cat-
egories. This resulted in the job loser average for Ger-
many moving above the averages of the other groups for
the period. The phenomenon was related to the difficul-
ties of transition to a market economy in the former East
Germany.

Youth and adult unemployment

Unemployment among adults (aged 25 and older), as re-
flected in U-3, was significantly lower than unemployment
among youth (under age 25) in every country studied except
Germany, where a strong apprenticeship system shields
many youth from unemployment. In all the other countries,
there was a significant youth-adult differential, as shown in
the following tabulation of averages for the available years:

Ratio,

Adult Youth youth to
rate rate adult
United States .... 5.4 13.1 24
Canada 8.5 15.9 19
6.4 15.8 2.5
2.0 5.6 2.8
2.7 9.7 3.6
78 22.5 29
6.0 WA 1.2
West Germany 58 72 1.2
Unified Germany Wl 7.0 1.0
Italy... 45 25.9 5.8
Netherlands 79 15.3 1.9
United Kingdom... 8.2 15.8 19

Because of the low youth-adult unemployment differential
in Germany, that country’s U-3 and U-S unemployment rates
were virtually identical. The incorporation of the former East

42 Monthly Labor Review August 1995

Germany into unified Germany in 1992 did not alter this fact.
In contrast, U-3 was significantly lower than the conventional
U-5 rate in all the other countries studied. (See table 3.)

Itaty’s U-3 measure was particularly low in relation to U-5
because youth unemployment there was about 6 times higher
than adult unemployment. Indeed, most Italian unemployment
occurs among persons under age 25, a phenomenon related to
the job loser-new entrant difference for Italy. New entrants
into the Italian labor market tend to be young persons, and
adults with established jobs tend to be shielded from
unemployment in Italy, although they may be subject to
underemployment in the form of reduced hours. Nevertheless,
the gap between youth and adult unemployment closed
somewhat in 1992 and 1993 as the youth-to-adult ratio fell to
under 5 percent. Some of this decline could have been caused
by the changes instituted in the Italian survey in 1992. (See
appendix.)

Elements of labor underutilization

Going beyond the U-1 to U-7 framework, we can use the
data developed in this study to analyze labor underutilization
across countries in its three readily measurable forms: un-
employment as conventionally defined (the U-S indicator);
persons working part time for economic reasons (part of the
U-6 indicator); and discouraged workers (added at the U-7
level). In the reformulation of the data that is set forth in this
section, there is no half-weighting of involuntary part-time
workers and persons seeking part-time jobs, as was done with
U-6 and U-7 earlier. Therefore, the new indicator to be pre-
sented represents the number of people underutilized to some
degree, either partially or totally.

Two types of measurement are shown in table 6: (1) a
proportionate distribution of the three types of labor
underutilization and (2) each form of underutilization as a
percent of the civilian labor force. (Note that discouraged
workers are not part of the labor force, but if they were added
to the labor force in these calculations, the results would be
virtually the same.) The data are averages for the available
years from 1983 to 1993.

Table 6 and chart 2 show that unemployment is the largest
of the three elements in all of the countries studied except
Japan and Sweden. By this measure, unemployed persons in
the United States comprised, on average, a little more than
half of all underutilized persons. The unemployed were
around three-fifths of the total in Canada, Australia, and the
Netherlands, and accounted for even higher proportions in
France, Germany, and the United Kingdom. (However, Ger-
many does not measure discouraged workers, so that the
German proportions relate to only two of the three elements.)

In Japan, unemployed persons made up only somewhat
more than one-quarter of all persons who were underutilized.



indicator. Sweden was second to Japan except for U-2 (job
losers), where it was displaced by Italy and the Netherlands,
and U-6, where it was virtually tied with Germany for second
place. Sweden’s rankings are undoubtedly affected by the lack
of data for the years 1983-86, which were years of relatively
low unemployment. If they had been included, Sweden would
most likely have outranked Japan, as it did in each year of the
1987-90 period.” Also, the table ranks Germany's averages
for the 1985-93 period, with the 1985-91 data referring to the
former West Germany and 1992 and 1993 referring to unified
Germany. Because of the higher unemployment in the former
East Germany, a ranking for unified Germany based only on
the 1992-93 period would have been less favorable for all of
the indicators except U-6.

The United States ranked from third to fourth best for every
indicator except job losers (U-2). At 3.5 percent, the U.S.
average for this rate was relatively high. Indeed, only
France’s and Canada’s U~2 rates were higher. Job loser
unemployment averaged under 1 percent in Japan, Italy, and
the Netherlands.

All indicators for France, Canada (except U~1), and the
United Kingdom, the countries with the highest conventional
(U-S) rates, were at the high (worst) end of the spectrum.
Canada had the highest job loser and adult unemployment
rates and was virtually tied with France for the highest U-6
rate. France’s long-duration unemployment rate (U~1)
ranked highest, while the United Kingdom had the highest
full-time unemployment rate (U-4). Italy, which had a
midrange U-S rate, had the highest U-7 rate.

The rankings changed somewhat when the sex of the person
was taken into account. The most striking change was for Japa-
nese women, who experienced a relatively high U-7 rate. Rank-
ing best in their U-6 rate among women in all the countries

studied, Japanese women fell behind women in both the United
States and Sweden when discouraged workers were added.
Dutch women had the highest (again, worst) U-3 and U-6
rankings and the next-to-highest U-S and U-7 rankings. Dutch
men fared much better in these categories.

The 1993 study presented an indepth analysis of each of
the seven indicators and the reasons behind the international
differences noted. The next two sections highlight results
relating to two of the narrow indicators—U-2 and U-3—
and the section that follows uses the data developed for U-6
and U-7 to present measures of total labor underutilization.
The final section, on Sweden, takes into account that
country’s participants in labor market programs, through a
broader measure of labor underutilization.

Unemployment by former status

Unemployed persons can be classified into four categories
based on their former employment status: job losers, job
leavers, new entrants into the labor force, and reentrants
into the labor force. Table 5 shows each of these four
groups as a percent of the civilian labor force, averaged
for the available years from 1983 to 1993. U-2 focuses
on job losers.

The foregoing analysis showed that U-2 rates were
relatively low in Japan and Europe (except for France),
compared with North America, throughout the period
studied. This reflects the greater level of job security and
protection for regular workers in Japan and Europe. Italy
was an extreme case, with virtually no job loser un-
employment, but a very high proportion of unemploy-
Ment associated with new entrants into the labor market.
Throughout the 1986-93 period, new entrants in Italy

sia Unemployment rates by former status, average of available years, 1983-93
{in percent]
Country ‘Job losers Job leavers New entrants Reentronts
35 08 08 17
55 17 4 23
34 14 18 22
c 9 0) 0”)
22 3 5 6
European Union

46 20 13 24
24 19 ‘4 15
19 20 $ 16
Unified Germany (1892-83) 40 14 3 14
ttaly ... 9 2 52 17
Netherlands 9 19 17 37
United Kingdom 27 26 1.0 32

* Not available separately; combined rate for new entrants and reentrants was
0.9 percent.
NoTE: Available years as noted on table 1 for U-2.

SOURCE: Compiled by Bureau of Labor Statistics from labor force surveys
for each country. Some adjustments are made for comparability with U.S.
concepts.

Monthly Labor Review August 1995 41



Unemployment indicators

The general pattern of all seven indicators in all of the coun-
tries studied, including those not shown, is movement in tan-
dem. Another observation is that only in the two North
American countries (Canada’s pattern is similar to the United
States’) and Sweden did U-1 through U-7 represent a pro-
gression from low to successively higher unemployment
rates.

Although U-4 is not shown in the chart, some mention of
it should be made. In most countries, the unemployment
rate relating to full-time workers (U-4) was noticeably higher
than the adult unemployment rate (U-3). The gap between
these two rates was widest in Italy, where adult unemploy-
ment is very low and most unemployment is associated with
young persons. By contrast, in Japan, the youth-adult differ-
ential was much narrower than in Italy, and the two rates
tended to be the same. Germany and the Netherlands had
the same pattern as Japan for U-3 and U-4.

In all but the Netherlands and the United Kingdom, U-4+
(the rate for full-time workers) virtually coincided with
U-5, the conventional measure. In these two countries,
the unemployment rates associated with seekers of full-time
and of part-time jobs were widely different. In the
Netherlands, the rate for seekers of part-time jobs was
almost twice as high as the rate for seekers of full-time jobs.
Consequently, U-4 was substantially below U-S in that
country. In the United Kingdom, the opposite was true, and the
high rate for seekers of full-time jobs was reflected in U~4’s
surpassing U-S,

The upward climb of unemployment in Sweden since 1990
is dramatically portrayed in the chart. Sweden’s series begins
with the year 1987, but earlier years would have shown rates in
the range of the low 1987 levels. Sweden’s U-5 rate averaged
3 percent from 1983 to 1986, equivalent to about 2.6 percent
according to the survey methods and definitions used in 1993.

Averages over time

Table 2 presents the indicators in terms of their averages
over the available years of the 1983-93 period. Table 3
expresses these figures in terms of each indicator’s ratio to
the conventional measure, U-5. This is a convenient means
of comparing the various rates within and among countries.
The averages for the period would generally show the same
comparative results as the figures for any given year;
exceptions are the higher levels of unemployment
experienced in Sweden and unified Germany in 1992~93,
which changed some relationships that existed in prior years.
Tables 2 and 3 show the data for the former West Germany
and unified Germany separately.

In each table, figures are shown for both sexes, for men,
and for women. Data for U-7 are not available for Germany.
For France, data on discouraged workers were available only

38 Monthly Labor Review August 1995

for 1989-93, and the average for these years is included in
the table.

Tables 2 and 3 recapture some of the findings already por-
trayed in chart 1. The ratios form a progression from low to
successively higher rates only in the United States and
Canada. Sweden's pattern is similar, except that U—4 is
above U-5. All the European Union countries had much
higher ratios at U-1 than at U-2, and Australia was more
like the European countries than the North American coun-
tries. Italy was at the extreme: on average, long-duration
unemployment made up more than 90 percent of conven-
tionally measured unemployment in Italy, while job losers
accounted for only about 10 percent. West Germany had a
very low job loser rate, but unified Germany’s rate was above
the U.S. average.

Table 3 shows that Sweden had by far the largest propor-
tionate increases in unemployment as measured by U-6,
which takes into account the hours lost by persons working
part time for economic reasons. The Swedish U-6 rate was
more than 80 percent higher than the U-S rate, on average,
whereas the increases for the other countries were much
smaller. Sweden’s ratio of U-6 to U-5 declined as unem-
ployment rose in 1992-93. However, even the lower values
of this ratio were higher than the U-6/U-5 ratio in other
countries. Germany had the smallest increase in U-6 over
U-S, and even the higher 1992-93 figures for unified Ger-
many were lower than for the other countries. In the United
States, U-6 ranged from 31 percent to 38 percent higher
than U-5 throughout the 1983-93 period. Except for Swe-
den, other countries also had ratios that fluctuated over time
within a narrow range.

Japan had by far the largest proportionate increase in
unemployment as measured by U-7. The rate accounting for
both persons holding part-time jobs for economic reasons
and discouraged workers was about triple the conventional
measure in every year of the period. In those years in which
unemployment was lowest in Japan (1991-92), U-7 was
about 320 percent higher than U-S; in the year when
Japanese unemployment was highest (1987), U-7 was 307
percent higher than the conventional rate. Thus, a large
contingent of potential workers who are not in the labor force
overhangs the Japanese labor market at all times.

Japan’s increase in U-6 over U-5 was about the same as
that for the United States, but the addition of discouraged
workers made U-7 increase much more in Japan than in the
United States and other countries. Italy also experienced a
large increase in its U-7 rate.

With some differences in degree, the foregoing relation-
ships held for both men and women. (See table 3.) For the
narrower indicators, U-1 through U-4, the differences be-
tween the rates for men and women in relation to U-5 were
not large for most countries, Women tended to have lower



Unemployment Indicators

USSG Alternative unemployment indicators, U-1 to U-7, 10 counties, available years, 1983-93

{in percent]

‘Country and year ul u-2 U-3 U4 us U6 u7
40 56 75 95 96 126 13.9
26 39 58 72 75 10.1 12
22 36 56 68 72 96 10.6
24 3.4 54 66 70 94 103
18 3.0 48 58 62 85 93
15 25 43 52 55 78 84
1.2 24 40 49 5.3 72 79
13 27 44 52 55 76 a2
20 37 54 65 67 92 10.0
28 42 64 7A 74 10.0 10.8
25 37 56 65 68 93 10.2
61 7.0 10.3 ng 18 143 18.7
54 64 93 12 112 13.8 148
5.0 58 a8 10.3 10.5 129 138
43 5.3 8.0 94 95 120 127
40 48 75 a7 BB Wd WT
33 40 67 768 78 98 103
31 39 66 74 75 95 99
33 44 70 80 81 10.4 106
48 61 90 103 10.3 129 136
57 67 99 WA 1.3 14.2 149
5.9 65 99 11.0 1.2 14.4 18.2

Australia
62 0) 70 10.1 10.0 12.2 13.6
57 ) 63 9.0 9.0 1.0 123
54 () 59 8.4 a3 10.4 112
47 ) 57 79 at 10.4 14
48 27 59 80 a1 103 14
44 23 53 69 72 93 10.3
32 18 48 58 62 a3 92
35 24 5A 67 69 9.4 10.4
59 44 73 96 96 129 143
74 44 84 10.9 108 14.7 16.2
74 39 a7 11.0 10.9 148 16.3
14 8 23 22 26 38 76
13 8 22 22 26 37 8.0
14 8 22 22 26 37 Bt
16 7 23 23 28 39 86
1.4 7 24 20 26 33 77
aw 5 18 18 22 31 Al
1.0 4 17 1.6 at 27 64
9 4 14 15 19 25 60
a 4 15 16 19 27 61
14 6 18 18 22 3.2 70
‘Sweden
2 1.2 16 22 22 49 55
7 ] 14 2.0 19 41 45
6 7 1 16 18 37 44
6 8 13 19 18 at 46
12 17 23 33 34 60 69
27 35 42 62 56 95 108
51 64 67 99 93 143 158
European Union
France:
67 34 56 83 80 9s 0)
8.0 9 65 10.2 96 15 ¢)
89 44 72 10.9 10.3 12.5 0)
88 42 1 10.8 10.3 13.3 ¢)
92 47 84 11.3 10.8 13.5 0)
86 44 82 10.7 10.3 128 ()
a4 44 84 10.0 97 12.3 124

August 1995



fiends Elements of labor underutilization in 10 countries, available years, 1983-93

Part time for! Total Part time for], Total
Unemp- | economic |Piscouraged| labor Country and year | Unem- | economic ;D!scouraged) ighor
Country and year | Floved sons | Workers | under- ployed | reasons | Workers | under.
utilization utilization
Continued—France
96 56 14 16.7 10.3 33 “) “
75 5.1 1 13.7 10.3 49 () “y
72 48 1.0 13.1 10.8 44 () (‘)
7.0 47 1.0 127 10.3 42 Q 0)
62 45 9 116 97 44 2 143
55 43 28 106 95 38 2 135
53 40 7 99 93 34 a 128
55 44 7 10.3 10.4 39 a 14.4
67 48 8 12.4 n5 5.0 2 16.7
74 5.0 9 13.3 40.1 44 2 143
68 5.0 9 12.7
68 47 2 12.4
18 48 15 18.0 69 9 “ 0
11.2 49 1.2 17.3 67 1.0 () 1]
10.5 48 g 16.1 69 1 () ()
95 47 8 15.0 64 1.0 ) 0
a8 44 7 139 58 9 “) ()
78 40 8 12.2 49 7 Q) ()
75 37 5 18 - 44 7 () Y
a3 38 3 138 Average, 1985-91 .. 59 9 () ()
113 56 8 177 Unified Germany ,
12 62 9 18.3 84 2 8 Q
98 47 8 153 4 14 0 8
10.0 40 1.6 158 Average, 1985-93..| 6.2 1.0 0) (0)
90 37 14 144 raat
83 38 12 38 1986 72 35 69 178
at 42 4 134 : 78 38 65 179
72 40 ay 123 77 34 66 177
62 a 9 2 78 33 64 175
60 a7 10 128 66 29 58 153
98 61 15 174 68 32 86 166
10.8 720 17 195 95 34 51 178
a | 7 | ir | ite me} a | gh | ie
86 48 148 ° °
1984 26 24 40 94 11.9 1.0 2 13.1
1985 26 24 48 95 () “ 19) 3
1986 |. 26 2.4 47 97 106 28 ! 137
1987 28 25 5.0 10.3 () ) ) 0)
1988 26 19 46 4 10.0 58 2 16.7
22 24 44 84 95 62 9 166
24 16 3g 75 88 64 7 159
19 14 37 69 78 59 8 145
19 16 36 7A 74 59 6 13.9
22 24 39 a2
23 20 42 a6 95 50 7 152
ae 38 6 a3 Wt 19 8 138
16 34 4 33 11.0 22 rc) 14.4
18 36 5 59 15 22 9 148
31 46 8 85 118 23 2 148
56 56 13 125 W4 24 & 144
93 6.3 15 72 94 22 A W7
Average, 1987-93 36 45 8 89 74 18 4 96
European Union: 7.0 1.6 3 89
a8 22 3 11.0
France 98 29 & 13.2
1983 8.0 24 ) ) 103 33 7 143
1984 96 29 () ) Average, 1983-93 98 23 6 12.7

T Not available. NOTE: Persons seeking parttime jobs and persons working part time for

* Averages calculated only for 1989-93 because of lack of data on discour- economic reasons are fully counted in this tabulation, in contrast to U-6 and
aged workers in 1983-88, U-7, for which thay are only hatf-weighted.

ne aac in series for tay. New survey methods were introduced thal ralsed SOURCE: Compiled by Bureau of Labor Statistics trom labor force surveys for
the adjusted U-5 rate by approximately 1 percentage point. ‘each country. Some adjustments are made for comparability with U.S. concepts.

Monthly Labor Review August 1995 45



fied to apply to persons aged 15 years or older (instead of 14 years,
as in the previous survey). The effect of this change is minimal, as
very few 14-year-olds were included in the labor force of the Euro-
pean Union countries in 1991.

The definition of employed persons is unchanged. The definition
of unemployed persons contains the following differences:

* Persons seeking to become self-employed are now considered
unemployed only if they satisfy the same criteria of seeking work
and availability for work as persons seeking work as employ-
ees, That is, they must be taking specific actions to become
self-employed in the past 4 weeks (such as applying for a busi-
ness license or looking for a business location) and be available
to start work in the next 2 weeks. Before 1992, these criteria
were not applied to this small group.

© Persons not at work and hoping to be reengaged by a former
employer (“temporary layoffs”) are, similarly, now considered
unemployed only if they satisfy the usual criteria of seeking
work and availability for work, which were not previously ap-
plied. These individuals also are a very small group.

* Persons without employment are considered unemployed only
if they are available for work and have used an active method of
job search within the past 4 weeks. The survey questionnaires
were modified to permit active methods to be distinguished from
passive methods. Persons using only passive forms of job
search—awaiting the results of having applied for a job, wait-
ing for a call from a public employment office, awaiting the
results of a competitive recruitment exam for the public sec-
tor—are no longer enumerated as unemployed.‘ In the absence
of comparative data from both the old and new sets of questions,
it is difficult to estimate the effect of this change, but most
member countries had already complied with the new definition.

All three of the foregoing modifications serve to lower unem-
ployment, compared with the prior surveys. Together, then, they
could result in some degree of overstatement in those surveys, com-
pared with the 1992-93 surveys. EUROSTAT believes that the effect
of the changes in 1992 were negligible for France, Germany, and
the United Kingdom, but considerable for the Netherlands and Italy.
EuROSTAT provided the following tabulation estimating unemploy-
ment under the old definition and comparing it with unemploy-
ment under the new definition in 1992 for four of the countries
(figures are in thousands):

Old New
France . 2,524 2,514
Germany . 2,494 2,467
Italy . 3,141 2,191
United Kingdom . 2,795 2,755

The Bureau of Labor Statistics has made adjustments to the pre-
1992 data for Italy that mitigate the difference indicated by this tabu-
lation, These adjustments were also made to the 1989 data for Italy in
the 1993 article and throughout the time series for Italy for 1986-91
in the current article. (See the discussion of Italy in the next column.)
No adjustments were made for the other countries because, except
for the Netherlands, the differences were small. (EUROSTAT could not
provide data on the old basis for the Netherlands.)

The changes that were implemented may have resulted in

certain inconsistencies in the data, which should be remedied
as the new version of the survey becomes more familiar. In
some countries, it was not possible for all of the m¢ ications
to be implemented fully. In France, the new questionnaire was
implemented only for that section of the sample which was
interviewed using computers, with the result that nonresponse
rates were very high for some variables. This effect will gradu-
ally disappear with the general phasing-in of computer inter-
viewing. Nonresponses were distributed by BLS according to
the proportions derived from the respondents.

In the Netherlands, beginning in 1992, the ILO guidelines
were not observed with respect to the 1-hour criterion for clas-
sification as employed, so certain figures had to be imputed by
EUROSTAT. The Dutch national definition was changed in 1992 to
include an employment threshold of 12 hours: persons were
counted as employed only if they worked 12 or more hours dur-
ing the reference week and as unemployed only if they sought
at least 12 hours of work for that week. The 1L0 definition rec-
ommends the use of a 1-hour threshold for employment and
imposes no hours threshold for the seeking of employment. Be-
cause there are no Dutch data relating to these two conditions,
the ILO (and EUROSTAT) definition could not be well reproduced
in the data for the Netherlands. Indeed, after careful study, BLS
found the 1992 and 1993 Dutch data out of line with past trends
and decided to exclude those years from the study, ending the
Dutch series of indicators in 1991.

Italy's statistical office made a major revision to the labor force
survey in October 1992 that brought it more in line with the EUROSTAT
guidelines. A new method of automatic editing and imputation of
missing data was introduced. The definition of unemployment was
changed to include only those who were actively looking for a job
within the 30 days preceding the survey and who were available for
work. Under the definitions prevailing prior to 1992, the Italian
national data, as well as the data reported by EUROSTAT, counted many
persons as unemployed who engaged in passive job searches only,
such as awaiting the results of recruitment exams in the public sector.
In the 1993 study, BLS made an adjustment to exclude these persons,
but data on both the old and the new basis for 1992 indicate that the
adjustment was probably too high. The adjustment of the old 1992
data resulted in an unemployment rate that was 1 percentage point
below the rate for the data on the new basis. This overadjustment
was partially due to inaccurate adjustments for nonrespondents. The
change in the Italian survey methods and questionnaire also had an
impact on the results. The new survey questionnaire, for example,
has produced an increase in reported job search activity by
unemployed persons.

BLS has adjusted Italy’s unemployment rates for 1987-91 down-
ward by excluding from the unemployed persons who had not ac-
tively sought work in the past 30 days (plus an estimated number of
nonrespondents), according to data reported by the Italian statistical
office. Although this adjustment is probably too high (based on the
aforementioned 1992 relationships), it continues to be used in the
Present study because the Italian statistical office has not published
detailed data on the new basis for any period prior to October 1992.
Thus, Italy’s unemployment rates for 1991 and earlier years shown in
this study are likely to be somewhat understated in comparison with
the 1992-93 data.

EUROSTAT used the October 1992 survey results for Italy, rather
than the spring survey results, because of the aforementioned
change. For all other European Union countries, the 1992 survey
data refer to the spring. Data for 1993 refer to the spring for all
European Union countries, including Italy.

Monthly Labor Review August 1995 47



in all countries. Although the other indicators—particularly
the expanded ones—-are viewed with interest, none of them
has been widely adopted by data users for either domestic or
international analysis.’ There are three basic reasons for
this. First, the U-5 definition is simple and objective, in-
volving no value judgments about a person’s relative need
for work or personal characteristics. Second, as will be
shown later, while the alternative measures differ signifi-
cantly in level, they reflect very similar trends over time;
that is, they all send out essentially the same “signal” re-
garding whether labor market conditions are improving or
deteriorating. Third, for purposes of comparison with other
countries—especiaily the major U.S. trading partners—us-
ers recognize the need for a “common currency”: the rate
based on the International Labor Office standards. U-S is
the most readily available, well-understood, and comparable
measure.

Nevertheless, it is instructive to assess international differ-
ences in terms of the alternative measures, because they point
out differences that are not expressed by the conventional
measure,

Period studied

The year 1983 was chosen as the initial year for the analysis
because it was the first year a new series of European Union
labor force surveys* was compiled in accordance with
International Labor Office (ILO) concepts that allowed for
international comparisons. A historically compatible series
of indicators could be calculated for the full period 1983-93
for five countries: the United States, Canada, Australia,
France, and the United Kingdom. However, even for three
of these countries, a few indicators were missing for some
years: U-7 was unavailable for France before 1989, and
U_2 began in 1987 for Australia and in 1984 for the United
Kingdom. Japan’s series was fully available from 1984
onward. Thus, only the United States and Canada had the
full complement of indicators available for all of the years
studied.

For the other countries examined, time series analysis for the
period was further constrained by changes in surveys. Because
of the unavailability of comparable data for earlier years, the
German series begins (partially) in 1984, Italy’s in 1986, and
Sweden’s in 1987. Only three of the indicators could be calcu-
lated for Germany in 1984; a more complete series (missing
only U-7) begins in 1985.

In 1992, revisions were made in European Union survey
definitions, causing a historical break more significant for
Italy and the Netherlands than for France, Germany, and the
United Kingdom. Because of this break, as well as a signifi-
cant modification in the Dutch national definitions, the data
series for the Netherlands terminates in 1991 in this article.

Italian data for 1992 and 1993 are shown, but the rates for
earlier years are somewhat understated.

The data are annual averages for the United States,
Canada, Australia, and Sweden. Japan’s data refer to Feb-
tuary of each year, and the data for the European Union
countries generally refer to the spring, except that Italian
data for 1992 are for October.

Patterns over time

Table 1 shows the seven indicators for the United States and
the nine foreign countries studied for the years from 1983 to
1993 for which data were available. The figures relate to
both sexes combined; figures were also calculated for men
and women separately, but are not shown in the table.” Some
averages for men and for women are presented later in the
article.

Chart 1 depicts the trend over time of six indicators (U-4
is excluded because it is virtually the same as U-S5) for the
United States, Australia, Japan, France, Italy, and Sweden.

Alternative unemployment indicators

U-1 Long-duration unemployment rate: Persons un-
employed 13 weeks (see footnote 2 in text) or longer, as a
percent of the civilian labor force.

U-2 Job loser rate: Job losers, as a percent of the
civilian labor force.

U-3 Adult unemployment rate: Unemployed persons
aged 25 and older, as a percent of the civilian labor force
aged 25 and older.

U-4 Full-time unemployment rate: Unemployed seek-
ers of full-time jobs, as a percent of the full-time labor
force.

U-5 Conventional unemployment rate: Number of
persons not working, but available for and seeking work,
as a percent of the civilian labor force. Only persons on
layoff and persons waiting to start a new job are not re-
quired to seek work in the past 4 weeks, a necessary con-
dition for all others classified as unemployed.

U-6 Rate encompassing half of the persons working
part time for economic reasons: Number of seekers of
full-time jobs, plus one-half of all seekers of part-time
jobs, plus one-half of all persons working part time for
economic reasons, as a percent of the civilian labor force,
Jess one-half of the part-time labor force.

U-7 Rate adding discouraged workers: U-6 plus
discouraged workers in the numerator and denominator.

Monthly Labor Review August 1995 33.



Unemployment Indicators

Upcoming changes in alternative indicators

From 1976 to 1993, the Bureau of Labor Statistics pub-
lished a range of indicators known as U-1 to U-7. The
framework embodying these indicators was introduced
in Julius Shiskin, “Employment and unemployment: the
doughnut or the hole?” Monthly Labor Review, February
1976, pp. 3~10. From January 1977 until December 1993,
the seven indicators for the United States were published
each month in the news release, Employment Situation.

The Current Population Survey, which is the source of the
U.S. data used in the current article, was revised as of
January 1994. The survey was redesigned to include new
and revised questions regarding individuals’ employment
and unemployment activities, and the collection
methodology was changed to a totally computerized
environment. (For further information, see “Revisions in
the Current Population Survey Effective January 1994,”
Employment and Earnings (Bureau of Labor Statistics,
February 1994), pp. 17-22.) As a result, publication of the
alternative unemployment indicators for the United States
was suspended. A forthcoming article in the Review will
introduce a new framework of alternative indicators for the
United States. The series of international indicators, U-1
to U-7, ends with the 1993 figures shown in the current
article. Upon its introduction, the new U.S. framework will
be assessed to see whether international comparisons are
feasible.

—
Another way of looking at the data is to present them in the
form of three elements of labor underutilization: unemploy-
ment, part-time work for economic reasons, and discourage-
ment with the labor market. Such a classification shows that
unemployment is the largest of the three in all of the countries
studied except Japan and Sweden. Thus, for these two coun-
tries, standard unemployment comparisons miss a great deal
of labor force underutilization. Also, ranking the countries ac-
cording to total labor underutilization rates differs from rank-
ing them according to unemployment rates. For example, Italy
was in the middle of the range of unemployment rates, but had
the highest rate of total labor underutilization.

Data for Australia, which was not covered in the earlier study,
are included in this article. For Germany, the earlier study re-
ferred to the former West Germany. In the present study, data
for West Germany continue to be presented until 1992, when
the coverage changes to unified Germany. The addition of what
was formerly East Germany raised the indicators for Germany
throughout the spectrum. Some small revisions are made to
the previously published data for Sweden and the United King-
dom, and significant revisions are made to three of the indica-
tors for France and to the U-7 indicator for Japan. (See the
appendix for information about these revisions.)

32 Monthly Labor Review August 1995

Seven indicators

In recognition of the fact that the official rate of unemploy-
ment is not ideally suited to all types of analyses or uses, the
Bureau of Labor Statistics for many years published a series
of alternative measures of unemployment based on definitions
that were either narrower or broader than the conventional
measure. The box on page 33 defines the seven indicators.”

Some of the indicators yield lower unemployment figures
than the conventional standard does, while others result in
higher figures. Under the U-1 through U-7 framework, U-S is
the official, usually cited unemployment rate-—the rate from
which all the others are derived by either adding or subtracting
different population groups. The first four, narrow, indicators
(U-1 to U-4) focus on certain “more serious” types of unem-
ployment—tespectively, long-term unemployment, job loss,
adult unemployment, and unemployment of seekers of full-
time jobs.

U-6 and U-7 portray broader concepts of unemployment than
does U-S, bringing into consideration two additional elements

_ of underutilization of labor: persons working part time for eco-

nomic reasons and discouraged workers.? U-6 includes the
number of unemployed persons seeking full-time work, plus
one-half of the number of unemployed persons seeking part-
time work and one-half of the number of those involuntarily
on part-time schedules for economic reasons. The reasoning
behind this formulation is that involuntary part-time workers
should be counted as at least partially unemployed; similarly,
unemployed persons seeking only part-time work should be
given just half the weight of unemployed persons seeking full-
time jobs, because their employed counterparts work, on aver-
age, only about half of a full workweek. This indicator moves
from the activity-based concept of the labor force used in all
the earlier indicators to a “time lost” type of concept.

Discouraged workers, added at U~7, are defined as persons
without work who want a job, but who are not looking for work
because they believe that their search will be unsuccessful.*
Discouraged workers are somewhat more broadly defined in
the data presented for Japan and Italy. In both countries, be-
cause of the special nature of their labor markets, there is a
sizable group of persons who want work, are available for work,
and are classified as unemployed,’ even though they did not
seek employment in the 4 weeks preceding the survey. These
persons are awaiting the results of previous applications. The
Bureau adjusts the data for Japan and Italy by removing such
individuals from U-5, but adding them to U-7. This group
does not fit precisely into the framework of rates, falling some-
where between U-5 and U-7. No similar adjustment is needed
for the other countries studied, because the numbers involved
are small.°

The conventionally defined unemployment rate, U-5, re-
mains the most widely accepted measure of unemployment



Elements of labor underutilization, 10 countries, averages of available years, 1983-93

Percent distribution Percent of civilian labor force
County Part time for Parttime tor | piscoura Total
Unemployed | economic | "COUSS®" | Unemployed | economic scouraged labor
Teatons reasons underutilization
United States 54.6 38.0 74 68 AT 09 12.4
Canada 64.0 30.7 5.2 98 47 & 15.3
58.6 32.6 8.7 86 48 1.3 148
273 237 489 23 20 42 86
40.8 50.5 87 36 45 8B 89
70.2 28.7 AD! 10.1 4t 2 14.3
85.7 14.3 () 6.2 1.0 ¢) ()
86.9 131 () 59 ‘9 co) 0)
83.1 16.9 (0) 7A 14 0) ()
45.3 18.9 35.8 8.0 33 63 17.5
62.9 32.8 44 95 5.0 7 15.2
774 17.9 47 98 23 6 12.7
* Not available. SOURCE: Compiled by Bureau of Labor Statistics from labor force surveys
NOTE: See table 7 for available years. Persons seeking part-time jobs and —_for each country. Some adjustments are made for comparability with U.S,
persons working pat time for economic reasons are fully counted in this tabu- concepts.
lation, in contrast to U-6 and U-7, for which they are only half-weighted.

Discouraged workers were the predominant manifestation
of labor underutilization in Japan, at almost half of the total.
Thus, discouraged workers in Japan comprised about the
same proportion of underutilization as unemployed persons
did in the United States. In Sweden, persons involuntarily
working part time were the main element of underutilization.

Persons working part time for economic reasons and dis-
couraged workers together added 5 to 7 percentage points to
the unemployment rate in most countries, on average, for
the 1983-93 period. The United Kingdom had the smallest
addition—about 3 percentage points, while Italy had the larg-
est—9.5 percentage points.

Unemployment rates, on average for the period, varied
from 2.3 percent in Japan to 10 percent in France. On the
other hand, the rate of total labor underutilization varied
from 8 percent in Japan and 10 percent in Sweden to 17.5
percent in Italy. France, the country with the highest unem-
ployment rate, ranked in the middle of the range on the total
underutilization basis because its discouraged worker rates
were very low. (The discouraged worker rates for France were
averages for 1989-93, the only years for which such rates
were available.) Italy, on the other hand, ranked in the middle
of the range of unemployment rates, but had the highest rate
of total labor underutilization.

The economic part-time rate was highest in the Nether-
lands, at 5 percent. With the exception of the Netherlands,
involuntary part-time rates in the European Union countries
were significantly lower than in North America, Australia,
and Sweden. The discouraged worker rates were 4 percent
in Japan and 6 percent in Italy, far higher than in any of the
other countries. As noted earlier, the definition of discour-

aged workers is somewhat broader in these countries, in-
cluding within its scope persons who are awaiting the re-
sults of jobseeking efforts. Discouraged worker rates were 1
percent or less in all the other countries studied.

In Japan, large numbers of women who are temporary or
casual workers withdraw from the labor force when they lose
their jobs, rather than seek work. Such workers generally
bear the brunt of labor market adjustments in Japan. In this
way, Japanese employers have flexibility in their work forces
during economic downturns, enabling regular workers—pre-
dominantly men in larger Japanese enterprises—to be virtu-
ally assured of employment until they retire, under Japan’s
so called lifetime employment system."'

Italy’s labor market matches people with jobs very slowly.
Hence, there is a large number of persons who want work
and are awaiting the results of previous job applications or
are awaiting the results of competitions for jobs in the public
sector (which can take a year or longer), rather than active-
ly seeking work. As noted earlier, they have been added to
the discouraged worker figures for Italy, even though they
may not be in a state of mind we would characterize as
discouragement.

Over time, the three component rates of labor under-
utilization tended to move cyclically in the same direc-
tion, as would be expected, but cyclical movements in
the rates of unemployment were generally greater than
movements in the rates of those working part time for
economic reasons and in the rates of discouraged work-
ers. These trends are illustrated in table 7. There were
some exceptions, however.

In the United States, unemployment declined from 7.4 per-

Monthly Labor Review August 1995 43



Unemployment Indicators

to 14 percent if all of the individuals in the labor market pro-
grams had been unemployed. Adding these persons to the U-7
rate would have increased it from 15.8 percent to 20.8 percent.
A figure of this magnitude would have ranked Sweden, instead
of Italy, as the country with the highest U-7 rate. This is a
major change from the situation in 1989, when a comparably
derived rate left Sweden virtually tied with Japan for the low-

Footnotes

est U-7 rate among the countries studied. In terms of total
labor underutilization, Sweden's 1993 rate would have in-
creased from 17 percent to 22 percent of the labor force. With
U-7 measured this way, Sweden would have had the highest
labor underutilization of all the countries studied. Of course,
other countries have persons in labor market programs, but in
each, the size of the group is small compared with Sweden’s.

ACKNOWLEDGMENT: The author thanks Neil Bain of the Statistical Office of
the European Union for providing expert advice and many unpublished tabula-
tions from the Union's labor force surveys. Thanks also go to the following
persons in national statistical offices, for providing special tabulations and ex-
pert interpretation of their data: John E. Bregger, Harvey Hamel, and John F.
Stinson, Jr, of the U.S. Bureau of Labor Statistics; Richard Phillips of the Aus-
tralian Bureau of Statistics; Doreen Duchesne and Earnest Akyeampong of
Statistics Canada; Takahara Yanai of the Japanese Statistics Bureau; J. L, Fauré
of the French National Institute of Statistics and Economic Studies; Paolo
Garona, Director General of the Italian National Institute of Statistics; Alois
‘Van Bastelaer of Statistics Netherlands; Anita Olofsson of Statistics Sweden;

Joyanna Moy and William McMichael ofthe Division of Foreign Labor Stats-
tics assisted in tabulating the data. Sara Elder of the same Division provided
research assistance while working on a cooperative educational assignment.

" Constance Sorrentino, “International comparisons of unemployment indi-
cators,” Monthly Labor Review, March 1993, pp. 3-24.

2U_1 has been redefined slightly for comparative purposes. In the pub-
lished figures pertaining to the United States, it represented persons unem-
ployed 15 weeks or longer, as a percent of the civilian labor force. However,
most other countries break their categories denoting duration of employment at 3
months (13 weeks), rather than 15 weeks. Because US. data are available (in
unpublished form) for durations of a single week, these data were used to modify
the U-I measure for the United States to conform with the definition citing 13
weeks or longer as the breakpoint. This modification makes only alight differ-
ence in the U-1 rate for the United States, increasing it by about one-tenth of
1 percentage point.

3 U-7is not available for Germany throughout the years covered and is not
available for France prior to 1989.

4 This was the U.S. definition prevailing prior to the 1994 revisions to the
Current Population Survey. Beginning in 1994, persons classified as discour-
aged must also have looked for a job within the past year and must have been
available for work during the reference week. (A direct question on availabil-
ity was added in 1994; previously, the availability of these persons had been
inferred from other responses.)

5 Italy has excluded these persons from the unemployed since October 1992.
(See appendix.)

§ For example, Canada’s 1993 survey enumerated only 21,000 persons
“waiting for replies” among those who want work and are available for work,
but who are not classified as unemployed. Their inclusion would add 0.1 per-
centage point to the Canadian discouraged worker rate. Data from the Statisti-
cal Office of the European Communities (EuRosTAT) also indicate very small
numbers of such persons in the major European Union countries, except for
ltaly.

7 The Organization for Economic Cooperation and Development (oECD) fre-
quently cites data on persons working part time for economic reasons and on
discouraged workers in analyses published in its Employment Outlook series.
The July 1995 edition of Employment Qutlook contains a chapter entitled
“Supplementary Measures of Labour Market Slack,” which examines in detail
the data on involuntary part-time workers and discouraged workers in O&CD
member countries,

5 Burostar processes and disseminates data forwarded by member countries
from labor force surveys conducted each spring. ‘These surveys have been car-
ried out annually in most countries since 1983.

° Tabulations of the indicators by sex are available upon request from the
author.

1 Sweden's unemployment rates in 1983-86 averaged about 3 percent,
slightly above the average for Japan (2.7 percent). However, Sweden's rates
for 1983-86 are probably overstated by about 0.4 percentage point for com-
parisons, because they include persons seeking jobs within the past 60 days. In
1987, Sweden's definition of unemployment was changed to come into accord
with the 4-week job search period used in the United States.

"" & deep recession in Japan beginning in the early 1990's has resulted in
pressures on the lifetime employment system. Indeed, some employers in hard-
hit industries have begun to solicit the early retirement of middle-aged white-
collar workers who expected lifetime employment. Fora further analysis, see
Haruo Shimada, “Recession and changes in labour practices in Japan,” Inter-
national Labour Review, vol. 132, no. 2, 1993, pp. 159-60.

” For further information see Sorrentino, “International comparisons, ”
p. 17, and the accompanying citations.

APPENDIX: Revisions and addition of statistics on Australia

This appendix presents information on (1) revisions to the Euro-
pean Union surveys; (2) revisions to a component of the statistics
on persons working part time for economic reasons in France and
on discouraged workers in the United Kingdom; (3) revisions
made in the methods applied to the data on Japanese unemploy-
ment; (4) revisions to account for a break in the series on Swedish
unemployment; and (5) unemployment statistics for Australia, a
country not included in the 1993 study. That study' contained an
appendix” explaining the sources, methods, and definitions used.
The information is, in general, applicable to the current study and
will not be repeated in this appendix.

European Union surveys. The European Union surveys compiled
and published by the Statistical Office of the European Union

46 Monthly Labor Review August 1995

(EUROSTAT) are the source of data on the alternative indicators for
France, Germany, Italy, the Netherlands, and the United Kingdom.
The concepts and definitions used in the EUROSTAT surveys have
been derived from the International Labor Office (ILO) guidelines
since 1983. With minor exceptions, the United States and other
countries also apply these guidelines.

The integration into the 1992 surveys of a more exact implemen-
tation of the ILO guidelines implies that the comparability between
the 1983-91 series and the new series from 1992 is slightly im-
paired. EUROSTAT states that “the fact that both sets of definitions
continue to rest upon the ILO guidelines ensures that the differ-
ences are minimal.”

The first of the changes instituted in 1992 has to do with the
definition of the population of working age, which has been modi-