Ready, willing, and able? measuring labour availability in the UK

The unemployment rate is commonly assumed to measure labour availability, but this ignores the fact that potential workers frequently come from outside the current set of labour market participants, the so-called inactive. The UK Longitudinal Labour Force Survey includes information that can be used to predict impending employment transitions. Using this unique dataset, new measures of labour availability, and indicators based on the more familiar unemployment rate alternatives, can be constructed and are reported here. The micro and macroeconomic performance of these labour force availability measures is compared. Two simplified models, which include several categories of reasons for not working as well as demographic variables, perform particularly well in all of the tests. The implications of these preferred models are further studied in the context of regional regressions and comparisons with alternative data sources. These results together illustrate the important role that some groups of the inactive can play as a source of potential workers.Labor supply - Great Britain ; Unemployment - Great Britain

Accounting for earnings inequality in a diverse work force

A general decomposition of earnings inequality is applied to the complete full-time labor force, including minorities and women. The results confirm that education premiums were the largest observable factor in the rise in earnings inequality in the 1980s, and also reveal an offsetting reduction in the role of race- and sex-related earnings differences.Education ; Income distribution ; Labor supply

Workforce composition and earnings inequality

A presentation of a model that incorporates many factors simultaneously -- including education, experience, and industry choice -- to explain the growing disparity in Americans earnings. Its main finding is that the shifting composition of the U.S. workforce is a significant and direct determinant of the widening earnings gap.Income distribution ; Labor supply ; Education

Wage inflation and worker uncertainty

Compares two possible explanations of why pay increases continue to be moderate in a vigorous labor market--workers' uncertainty about their jobs and human resource managers' wage-setting behavior--and looks at how each explanation matches the evidence on the timing of inflation and wage changes.Wages ; Inflation (Finance)

Productivity gains during business cycles: what's normal?

Labor productivity growth is generally acknowledged to be procyclical. The author reviews the leading explanations for this, then uses two approaches to compare the time pattern of productivity gains over the business cycle. One approach describes the pattern in terms of the number of quarters of growth since the cycle's trough; the other uses knowledge about the ends of past recoveries to describe the typical pattern of productivity gains as a cycle ages.Labor productivity ; Business cycles

A closer look at Cleveland's latest poverty ranking

News that Cleveland’s poverty rate is the worst in the nation--and rising--has elevated the community’s concern about conditions in the city. But a closer look at the way poverty rates are calculated suggests that all the possible causes of Cleveland’s ranking have not been fully understood.Poverty - Cleveland (Ohio) ; Economic conditions - Cleveland (Ohio)

Are we engineering ourselves out of manufacturing jobs?

Since the 1970s, productivity growth in the manufacturing sector has outpaced the overall economy, yet the sector’s share of the workforce has declined dramatically. This leads us to ask if we are in fact engineering ourselves out of jobs. This Economic Commentary explores the relationship between productivity and employment and points out why this apparently straightforward relationship may be more complicated than it appears.Manufactures ; Employment ; Productivity

Measuring total employment: are a few million workers important?

How can we measure total employment in the economy? The Bureau of Labor Statistics provides two different-and sometimes contradictory-measures of this key indicator. During the 1990s, the gap between the two measures has widened to more than five million workers. This Economic Commentary examines the current discrepancy between the two measures of employment and explores its significance in interpreting our economy's health.Employment (Economic theory) ; Economic indicators

Employment surveys are telling the same (sad) story

Two government surveys are used to gather information about employment in the U.S. economy, but the employment levels calculated from each seem to provide conflicting pictures of the labor market. The surveys are very different, but when the differences are taken into account and the survey results are compared with their respective business-cycle patterns, the conflict disappears.Labor market ; Employment (Economic theory)

Inflation and unemployment revisited: grease vs. sand

As inflation rates in the United States decline, analysts are asking if there are economic reasons to hold the rates at levels above zero. Previous studies of whether inflation "greases the wheels" of the labor market ignore inflation's potential for disrupting wage patterns in the same market. This paper outlines an institutionally-based model of wage-setting that allows the benefits of inflation (downward wage flexibility) to be separated from disruptive uncertainty about inflation rate (undue variation in relative prices). Our estimates, using a unique 40-year panel of wage changes made by large mid-western employers, suggest that low rates of inflation do help the economy to adjust to changes in labor supply and demand. However, when inflation's disruptive effects are balanced against this benefit the labor market justification for pursuing a positive long-term inflation goal effectively disappears