Ready, Willing, and Able? Measuring Labour Availability in the UK

Bank of England Working Paper No. 186

FRB of Cleveland Working Paper No. 03-03

41 Pages Posted: 3 Sep 2003 Last revised: 13 Nov 2007

See all articles by Mark Schweitzer

Mark Schweitzer

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Date Written: 2003

Abstract

The unemployment rate is commonly assumed to measure labour availability, but this ignores the fact that potential workers frequently come from outside the current set of labour market participants, the so-called inactive. The UK Longitudinal Labour Force Survey includes information that can be used to predict impending employment transitions. Using this unique dataset, new measures of labour availability, and indicators based on the more familiar unemployment rate alternatives, can be constructed and are reported here. The micro and macroeconomic performance of these labour force availability measures is compared. Two simplified models, which include several categories of reasons for not working as well as demographic variables, perform particularly well in all of the tests. The implications of these preferred models are further studied in the context of regional regressions and comparisons with alternative data sources. These results together illustrate the important role that some groups of the inactive can play as a source of potential workers.

Keywords: unemployment incidence, labor force

JEL Classification: J21, J64, E24

Suggested Citation

Schweitzer, Mark, Ready, Willing, and Able? Measuring Labour Availability in the UK (2003). Bank of England Working Paper No. 186; FRB of Cleveland Working Paper No. 03-03. Available at SSRN: https://ssrn.com/abstract=425790 or http://dx.doi.org/10.2139/ssrn.425790

Mark Schweitzer (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

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