PowerPointPrsentation

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Unemployment, Well-Being and Institutions. The
Intricacies of using the standard unemployment
rate (UR) as an Indicator for contemporaneous
Labour Markets

• New LMStats Project(a) Who are we?(b) What do
  we do? NAIRU, productivity etc.
• Empirical strategies Well-Being (WB) (a)
  headcount-measures gt employment inadequacy
  rate(b) synthetic indices including
  institutional variables
• Theorising WB and an example(a) a methodology
  values, preferences and indicators(b) subjective
  WB in Europe(c) objective LMWB an index

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How reliable is NAIRU for the US?
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Example UR, Growth, and Productivity
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2nd Example A New Headcount-Measure
EIR employment inadequacy rate
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Investigating subjective and objective notions of
labour market well-being (Draft)
Executive Summary The principal aim of the paper
is to add to an understanding of how to measure
well-being of people participating in the labour
market. A brief survey of the literature shows
that well-being consists of both subjective and
objective aspects and that the problems of
selection and aggregation of indicators are
inherently normative in nature. A definition of
labour market well-being is suggested consisting
of four components basic values, subjective
preferences, objective indicators and economic
interdependences. The relationship between values
and preferences and indicators is tested for the
case of member countries of the European Union.
In addition, a pooled cross-section analysis
shows how labour market well-being may be under-
or overstated by the use of simple unemployment
rates for given countries. It also shows that
there may be serious conflicts between social and
political preferences and economic necessities in
terms of interdependences between indicators.
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An Approach for Determining WB in Labour
Markets Part I

• plurality of approaches for general Well-Being
  (WB)
• Definition of WB as a set of... values,
  subjective preferences, indicators,
  interdependencies
• basic values specified as ... Income, Leisure,
  Choice, Security
• aims finding an indicator of aggregate labour
  market (LM) WB, comparing it to the standard
  unemployment rate

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An Approach for Determining WB in Labour
Markets Part II

• Example LMWB in the European Union 1.)
  Relationship between values and overall job
  satisfaction 2.) Relationship between
  indicators and values gt selection of
  subjectively relevant indicators
• How to aggregate these indicators? gt
  unemployment rate as benchmark
• Regression of indicators on unemployment rate
• rule of thumb if predicted unemployment rate
  smaller than actual one gt unemployment rate
  underestimates LMWB!

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Beispiel predicted vs. Actual unemployment