Abstract
The unemployment rate is often criticized as a flawed indicator of underlying events. Some suggest we are better served by following the employment ratethe number employed over the total adult population. This paper draws on the theory of human information processing to compare the effectiveness of the two views. Research has shown that we attach meaning to external data by associating them with retrieved bits of stored experience. Internal representations of unemployment would thus depend on the experience and expectations stored by the polity. Examining such expectations provides insight into the cognitions that citizen/decoders build from unemployment data. The analysis suggests that alleged flaws in the data are more appropriately attributed to the expectation that any single indicator can reflect all significant developments, and the consequent disinclination to integrate multiple indicators. The neurophysiological and experiential roots of these cognitive preferences are explored.
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