The iceberg decomposition: A parsimonious way to map the health of labour markets

Stijn Baert

Economic Analysis and Policy, 2021, vol. 69, issue C, 350-365

Abstract: This article introduces the metaphor of the iceberg in the labour market. While policy in most OECD countries has historically focussed on reducing unemployment (the tip of the iceberg), the group of inactive people (below the waterline) is much larger. Therefore, we point to the clear limitations of the unemployment rate as the (single) key macro-economic indicator of the health of the labour market. A parsimonious dashboard approach utilising the unemployment-to-population ratio and the inactivity-to-population ratio as two highly appropriate and complementary measures is defended. We show that the ratio of these two indices varies greatly between countries, which calls for different policies for different countries.

Keywords: Employment; Unemployment; Inactivity; Labour market policy; Labour market indicators (search for similar items in EconPapers)
JEL-codes: J08 J23 J24 J64 J68 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: The Iceberg Decomposition: A Parsimonious Way to Map the Health of Labour Markets (2020)
Working Paper: The iceberg decomposition: a parsimonious way to map the health of labour markets (2020)
Working Paper: The iceberg decomposition: a parsimonious way to map the health of labour markets (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:69:y:2021:i:c:p:350-365

DOI: 10.1016/j.eap.2020.12.012

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