The Labour Force Dynamics of the Marginally Attached

Abstract:     
One of the most important measures of the state of the labour market is the unemployment rate. However, the standard definition of unemployment ignores an important group of people who are not employed but who want to work - the marginally attached workforce. The marginally attached are defined as those who are not employed, want to work but are not actively seeking work and therefore not classified as unemployed. The paper uses longitudinal data from the Survey of Employment and Unemployment Patterns (SEUP) to test whether the marginally attached are behaviourally distinct from the unemployed or those who are not attached to the labour force. We find that the labour force transitions of the marginally attached, on the whole, are between those of the unemployed and the unattached. Another finding is that the length of time over which the labour market dynamics are considered is crucial to our understanding of the labour market dynamics of the marginally attached. An implication of the findings of this paper is that a range of measures of potential labour supply should be considered, and that the measure used should depend on the specific question being asked.

Accepted Paper Series