Why we should (also) Measure Worklessness at the Household Level. Theory and Evidence from Britain, Spain, Germany and the United States.

Abstract

Individual and household based aggregate measures of joblessness can, and do, offer conflicting signals about labour market performance. This paper uses a simple set of indices to measure joblessness at the household level in 4 OECD countries with very different labour markets and welfare systems and tries to identify the likely source of any disparity in the signals stemming from individual and household-based measures of worklessness. We focus on one measure of the polarisation of work across households which is built around a comparison of the actual household jobless rate with that which would occur if work were randomly distributed over the working age household members. We show that in all the countries we examine, there has been a growing disparity between the individual and household based jobless measures. Though the incidence and magnitude of these changes varies widely, the majority of the change is from increases in this polarisation measure rather than from changing household composition or employment levels and in all the countries we study can be explained by within rather than between household group factors. This suggests, to us, that inter-relationships between each country's labour market performance and their welfare systems underlie these developmentsworkless households, distribution of work, polarisation, joblessness