Economics●●●●●Difficulty 3 of 5

Who counts as unemployed, and who quietly disappears from the number?

Lose your job, give up looking for a new one, and you can drop out of the unemployment rate altogether.

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You count as unemployed only if three things are true at once: you have no work, you could start soon, and you have actively looked recently. , following the standard of the , counts as unemployed those aged 15 to 74 who are not working, have looked for work in the last four weeks, and are ready to start within two weeks. The unemployment rate is the number of such people as a percentage of the , meaning the employed plus the unemployed.

The three tests for being counted as unemployed
  1. Step 1: No work

    Not in paid employment or self-employment

  2. Step 2: Available

    Ready to start within two weeks

  3. Step 3: Searching

    Actively looked for work in the last four weeks

"Actively" is a strict word. Looking for work means making an effort: contacting employers, going to interviews, sending out applications or answering advertisements. Simply looking at advertisements and not responding does not count. And the leaves out the economically inactive, such as school children, students and pensioners.

That is how someone quietly disappears from the number. A is of working age and would prefer to be working, but has stopped actively seeking a job, or has not found one after a long spell without work. As a general practice, such people are not part of the and are not counted in most official unemployment rates. A person who loses a job, searches for months and then gives up leaves the figure without ever finding work.

The count can also be pushed the other way. In some countries unemployment benefits can inflate the statistics by giving an incentive to register as unemployed. So the unemployment rate is a careful definition, not a count of everyone who wants a job.

Quiz me

0/3

  1. 1.Which person would the standard definition count as unemployed?
  2. 2.How can the official unemployment rate fall even though nobody has found a new job?
  3. 3.Why does the US publish U4 and U6 as well as the official rate?

Recap

To be counted as unemployed you must be without work, available to start, and actively searching.

💡 A trick to remember it · No job, ready to go, and searching lately: miss one and the count says 'not unemployed'.

Surprising fact · Discouraged workers who stop looking are generally not counted as unemployed.

Sources (2)

No source, no claim. Every fact in this lesson (15 claims) cites at least one of these.

  1. [1]Unemployment · Wikipedia
  2. [2]Discouraged worker · Wikipedia
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