Explaining the difference between unemployment and the claimant count

Abstract

Unemployment and the claimant count are both important measures of spare labour capacity in the UK economy. However, they each record subtly different aspects of the non-utilisation of labour. Unemployment estimates are based on a person's self-classification as being ‘out of work, but ‘currently and actively seeking to work’ in the Labour Force Survey (LFS), while the claimant count is a count of the number of people who claim unemployment related benefits (the majority of whom claim Jobseeker's allowance (JSA)). This article examines the reasons that the two measures provide different estimates, and presents analysis on the groups of people that make up the gap between unemployment and the claimant count. The article finds that the differences in definitions contribute to this gap, but there are also other reasons for the changing size of the gap.