Average Unemployment Research Articles

Unemployment Dynamics in New Zealand 1985-1994

The quarterly change in the number of unemployed New Zealanders is usually quite small relative to the total number of people unemployed. For the year ended September 1994, for example, the absolute average quarterly change in Household Labour Force Survey (HLFS) unemployment was 10,500 people against a quarterly average unemployment pool of 145,000 people. These relatively small stock changes, however, conceal the much larger flows into and out of unemployment of possibly 70,000 people during each quarter of 1993194. The scale of these flows, and the associated probabilities of entering and leaving unemployment, are not widely known. Using data from the HLFS, this paper updates and extends the relatively small amount of New Zealand research on labour market dynamics. It begins with a definition and data on the unemployment stock-flow relationship in New Zealand. This is followed by a brief analysis of the flows between the major labour market states and the associated flow rates and cycles. The paper will indicate how gross flows data can be used to give insights into gender and age differences in unemployment and 'steady-state' outcomes. The accuracy of gross flows data and the formal modelling of unemployment inflows and outflows are on-going projects.

Structural Change in U.S. Labor Markets

Two debates over labor market structure have occurred in the U.S. since World War II: the structuralist/aggregate demand school debate in the early 1960s and the deindustrialization debate of the 1980s. In both controversies one side offers a structural explanation in which difficulties in the labor market derive from an overall transformation of the economy. The opposing view is that labor market trends cannot be explained by a structural transformation, since no such transformation has taken place. Despite heated policy debates and impressive data collection the essential point of disagreement in both debates remains unresolved: the existence of structural change in the labor market. This paper argues that two fundamental problems have hindered a satisfactory outcome to these recurring debates over structural change in the labor market. First, each side in the debate has a different concept of structure. If a consensus cannot be reached on what structural change in U.S. labor markets means, any debate over the existence and implications of this change is bound to be fruitless. With an imprecise or inconsistent definition of structure the question cannot be settled empirically. The second and more serious difficulty is that both sides use concepts of structure that have more to do with product markets than labor markets. The focus on product markets results from the fundamental assumption that labor demand is a derived demand. This assumption is axiomatic in neoclassical theory and exerts a powerful influence even on structuralist labor economists who reject much of the orthodox approach to labor. The first part of this paper looks at the consequences of this approach to structure. Despite the fact that the debates were sparked by high unemployment and other disturbing trends in the labor market, the debates address labor market structure only indirectly. The theoretical arguments underlying the assorted views reflect a paradigmatic dispute over the nature of economic growth. The second part of the paper discusses the concept of labor market structure and suggests an alternative approach. The paper then returns briefly to the debates over structure to demonstrate how this alternative approach would clarify this controversy. The Two Labor Market Debates The initial impetus to both debates was a secular rise in average unemployment rates. The structuralist/aggregate demand school controversy resulted from an increase in the average unemployment rate to 5.8% between 1958 and 1964 (Frumkin, 1987).(1) Killingsworth (1965) argued that the trend toward higher unemployment rates was due to a structural transformation of the labor market. The disproportionate incidence of high rates of unemployment in specific segments of the labor market led to the Killingsworth twist, a forerunner of the declining middle of the 1980s. Killingsworth's conclusions were based on the observation of lower unemployment rates among more highly skilled and educated workers. However, despite the use of statistics on labor supply to support his argument, Killingsworth was arguing that it was the structure of labor demand that was undergoing transformation. Killingsworth's structuralist arguments were countered by the Council of Economic Advisors (Bowen, 1965). The Council's contention was that although specific sub-groups of the labor force were affected differently over the business cycle, there had been no secular increase in the level of structural unemployment nor had there been significant increases in the unemployment rates of groups considered to be dominated by unskilled workers. The higher unemployment rates after 1957 were attributed to a deficiency of aggregate demand. During the 1980s unemployment reached its highest level since the Depression. Many manufacturing industries were particularly hard hit by the recessions of the early 1980s leading to widespread layoffs and plant closings. Economists such as Robert Reich (1983), Barry Bluestone and Bennett Harrison (1982) argued that high unemployment rates and the loss of manufacturing jobs reflected long-term structural changes in U. …

Military expenditure and unemployment in the OECD

The effect of military expenditure on employment is a matter of considerable importance. However, few of the standard economic analyses of unemployment take any explicit account of variations in military expenditure in their models. The purpose of this paper is to assess whether the prevalent neglect of this variable in labour economics is justified. The paper briefly surveys previous estimates made of the employment effects of military expenditure. It then considers evidence from the simple dynamic reduced form regressions estimated on long historical series for the US and the UK and pooled post‐war data for 11 OECD countries. It does not suggest that the share of military expenditure is a significant influence on the unemployment rate. This implies that in analysing unemployment no special account need be taken of military expenditure and that the fear that reductions in the share of military expenditure will be associated with higher average unemployment levels is misplaced.

Les déterminants individuels de la durée du chômage

Individual determinants of unemployment durations, by Liliane Bonnal, Denis Fougère. From a statistical standpoint, this paper analyzes the effects of individual characteristics on average unemployment durations and the types of duration with competing risks. The results show that time-profiles of specific hazard rates or exit rates from unemployment depend on the destination state [the two options basically being: finding a job, and being removed from the ANPE (National Agency for Employment) lists for not checking in]. Furthermore, the individual factors determining these rates differ from one destination state to another. Variables which influence the instantaneous probability to be hired are demographic (sex, age, citizenship, marital status) and socio-economic (education, job qualifications, socio-professional categories) individual characteristics.

State Unemployment Compensation Programs: Immediate Reforms Needed

State Unemployment Compensation Programs: Immediate Reforms Needed Introduction State unemployment insurance (UI) programs have serious defects that require immediate reforms. The most glaring defects are the relatively low proportion of unemployed workers who receive UI benefits and inadequate trust fund reserves in most states. The primary purpose of this paper is to analyze the major defects in state UI programs and offer recommendations for improvements. Since substantial amounts of new revenues are necessary that may require a sharp increase in employer UI contribution rates, needed improvements are likely to be strongly opposed by employers. Thus, the authors argue that employees should be required to contribute to UI programs. The economic effects of a new payroll tax on employees and public policy implications are analyzed in some depth. The major conclusions of the study are that employee contributions could substantially increase the proportion of unemployed workers who receive benefits, improve the solvency of state UI programs, increase the effectiveness of UI as an automatic stabilizer, and encourage greater employee interest in the programs. Defects in State Unemployment Insurance Programs State unemployment insurance programs have serious defects that limit the effectiveness of the programs in reducing economic insecurity from involuntary unemployment. The most important defects are summarized as follows: * Small proportion of unemployed who receive benefits * Inadequate trust fund reserves in most states * Greater difficulty in obtaining extended benefits * Reduction in the effectiveness of experience rating * Contestment of claims by employers * Reduction in real UI benefits * Decline in the effectiveness of UI as an automatic stabilizer Small Proportion of Unemployed Receiving Benefits The most serious defect in unemployment insurance (UI) programs is the small proportion of unemployed workers who receive benefits. Although about 97 percent of all wage and salary workers or about 85 percent of all employed persons are covered by UI programs, only a small fraction of the total unemployed at any time receives UI benefits (U.S. Congress, 1989, p. 440). In 1988, fewer than one in three unemployed workers received benefits in an average month (see Table 1). The record is not much better during business recessions. During the trough of the severe 1981-82 recession (November, 1982), only 49 percent of the unemployed received benefits. This compares with a peak of 81 percent of the unemployed who received UI benefits in April 1975 and a lowpoint of about 26 percent in October 1987 (U.S. Congress, 1989, p. 442). In contrast, foreign countries generally compensate a much higher percentage of unemployed workers. For example, in August 1984, Germany, Japan, and Sweden compensated over 60 percent of their unemployed, while the comparable figure for the United States was only 31 percent (U.S. Congress, 1987a, p. 329). The reasons for the decrease in the proportion of unemployed workers who receive UI benefits will be discussed later in the paper. In addition, there is wide variation among the individual states. In four states (Florida, New Hampshire, South Dakota, and Virginia) fewer than one in five unemployed workers received benefits in 1987. Virginia had the lowest percentage with only about 17 percent of the workers receiving benefits in an average month. Only three states (Alaska, Massachusetts, and Rhode Island) paid benefits to more than half of the unemployed workers (see Table 2). Reasons for the Decline. A recent study by Mathematica Policy Research, Inc. prepared for the U.S. Department of Labor provides valuable information on the reasons for the decline in the proportion of unemployed workers who receive benefits. To estimate the proportion of unemployed who received benefits, Mathematica used a measure called the UI claims ratio, which is defined as the ratio of average weekly UI benefit claims under state programs during a quarter to the state's average total unemployment during the quarter. …

Self-reliance and Blue-collar Unemployment in a Steel Town

MASSIVE LAYOFF of blue-collar workers during the 1980s will provide social workers with a com prehensive case study of unemployment and middle America, including a gauge of the responses by social agencies to the social and economic needs of a seg ment of the population that generally enjoyed prosperity during the 4 pre vious decades. Unemployment and eco nomic uncertainty has become a national issue and has reached a crisis level in many regions of the country (Abramovitz, 1984; Beckett, 1988; Bor rero, 1980; David, 1985; Macarov, 1988). Unemployment figures reveal an unrelenting upward trend over the past 30 years. Average unemployment for 1965 was 4.4 percent (Bureau of the Census, 1977). By 1960, this figure had risen to 5.5 percent, and average annual unemployment through the 1970s was 6.2 percent. Except for the past several years, unemployment in the 1980s has averaged 8 percent nationally and has been much higher in many specific areas (Bureau of the Census, 1988). Between 1981 and 1986,13.1 million workers aged 20 or older (approxi mately one-eighth of all employed workers) were displaced because the plant closed, the company moved, work decreased, or positions or entire shifts were abolished. One-third of these displaced workers were employed with the same company for 10 years or more (Bureau of Labor Statistics, 1986). About one-half of the jobs were in manufacturing. Since 1981, employ ment in construction and manufacturing has declined by more than one-half million (Bluestone & Harrison, 1986). Of all the displaced workers, one-fourth were unemployed for at least 1 year between 1979 and 1984; when they were reemployed, 45 percent took a cut in pay, with two-thirds earning less than 80 percent of their previous income (U.S. Congress, Office of Technology Assessment, 1986). David E. Biegel James Cunningham Hide Yamatani Pamela Martz

The youth unemployment ‘crisis’ of the 1980s: How two comprehensive schools have responded

Abstract The high levels of youth unemployment of the 1980s have represented a ‘crisis’ for secondary schools, especially in areas of higher than average unemployment like the North East of England, where only 10% of 16‐year‐olds have entered full time employment since 1983. Research conducted during 1986 to 1987 in two comprehensive schools in North East England focused on the impact of youth unemployment on pupils and teachers and examined school responses to youth unemployment. Motivation levels amongst 70 pupils nearing the end of compulsory schooling remained relatively high. Most pupils were aware of their bleak employment prospects but few could offer any coherent explanations of the causes of unemployment. Career aspirations were low, with many pupils accepting that they would end up on the Youth Training Scheme1 (YTS). The main response to youth unemployment in both schools was the adoption of ‘new vocational’ initiatives which aim to improve pupils’ employability. It is argued that such policies can have at best only a marginal effect on young people's employment prospects unless there is a dramatic expansion of the local youth labour market. Young people instead need to be given the means to understand the situation facing them. One method of achieving this may be via an alternative approach to social and political education.

Large firms' changing purchasing requirements and local suppliers: toward a new initiative in northeast England

Northeast England, an old industrial region with higher than average unemployment, also contains state-of-the-art manufacturing plants, many owned by multinational companies. A recent project undertaken for the Northern Development Corporation by Segal Quince Wicksteed, found a very high level of interest among these firms in increasing local purchasing. For many, this was linked to the greater autonomy they had recently gained. Adaptation to competitive pressures and the need to control costs had led to much greater emphasis being placed on quality. This could be achieved only by working with a small number of key suppliers. Much local collaboration was already evident, and there was considerable interest in increasing this if suppliers could be found with the right capabilities and attitudes. In economic development terms, scope was found for new initiatives that could provide highly selective information on possible collaborators and support the development of these large firm: supplier relationships b...

Ethnic differences in drinking practices and cognitive impairment among detoxifying alcoholics.

The purpose of the present study was to determine whether ethnic differences existed among detoxifying alcoholic inpatients regarding drinking practices, psychosocial variables and cognitive impairment. Patients of Puerto Rican extraction (Hispanics) were found to be more often afflicted than Whites and Blacks by cognitive impairment, daily drinking, heaviest average amount drunk, unemployment and lack of residence. Whites were less affected by these variables than the other two ethnic groups. Amount and frequency of drinking predicted the occurrence of cognitive impairment to a degree that approached significance. Cognitive impairment was defined as inability to score less than 5 points in the Blessed Orientation-Memory-Concentration test. In a follow-up study, nearly all CT scans obtained on a similar group of 20 detoxifying alcoholics (mean age 40), who had cognitive impairment as defined in the first study, were found to demonstrate brain atrophy. Contrasting drinking practices rather than ethnicity may have accounted for the different rates of cognitive impairment observed among the three ethnic groups.

Wage setting and unemployment persistence in Europe, Japan and the USA

The persistence of high unemployment in the main European economies is one of the most puzzling economic developments of the past fifteen years. Average Japanese unemployment has risen slightly since the mid-seventies, whereas unemployment in the United States still exhibits cyclical fluctuations around a gently rising level. In marked contrast, average unemployment in France, Germany and the United Kingdom rose to a higher plateau during the latter part of the seventies, shot up again in the early eighties, and has remained persistently high. Identification of the causes of such unemployment persistence is crucial before one makes policy recommendations. Three possible causes spring to mind: first, persistence in the determinants of equilibrium and disequilibrium unemployment; second, excessive power of insiders in wage setting combined with high correlation between employment status and insider status, and finally a high degree of state dependence (sluggishness) in labour demand. Although in general one expects all three causes to have played a role in the persistence of high European unemployment, there is still a need to identify their relative importance. The first set of factors has been assessed empirically in recent papers by among others, Sachs (1983), Bruno and Sachs (19X5), Bruno (1986) Layard and Nickel1 (1985), Bean, Layard and Nickel1 (1986), Newell and Symons (1985) and others. Many of these papers have also allowed for sluggishness in labour demand, although they did not particularly focus on it. The second set of factors has been investigated by Blanchard and Summers (1986), who concluded that there is evidence of much higher correlation between employment status and insider status in the three largest European economies, than in the United States.

Secular changes in age at menarche and adult stature in Hebridean women

SummaryData are presented on age at menarche and adult stature in 905 women from the islands of Lewis and Harris, born between 1920 and 1949. Menarcheal age showed no tendency to fall in women born between 1920 and 1935, but thereafter successive year-of-birth groups showed an almost continous decline. There were no significant changes in stature in successive groups.The changes have been correlated with trenda in affluence, as indicated by unemployment levels. In women born between 1932 and 1941 there was good agreement between average unemployment during various periods of childhood and menarcheal age, but among later-born individuals the relationship broke down. It is suggested that during the earlier period unemployment was associated with some degree of biological deprivation, but that during the later period the introduction of rationing and later, of the Welfare State, buffered the growing child against economic hardship.Mean household size (used as an estimate of mean sibship size) fell over the period of study, but its pattern of change was different from that of menarcheal age. It is suggested that this factor played at most aminor role in fluencing the results of the investigation.