How Tight is the Labour Market? A Micro-Based Macro Indicator

Simen Gaure and Knut Røed (knut.roed@frisch.uio.no)

No 09/2003, Memorandum from Oslo University, Department of Economics

Abstract: We develop a new indicator of labour market tightness, based on the pure calendar time changes in individuals’ transition rates from unemployment to employment.Based on Norwegian register data from the 1989-2002 period, we show that this indicator,in contrast to the aggregate rate of unemployment, correlates well with an expost-calculated GDP-based business cycle indicator, even around the time of business cycle turning points. The indicator can be calculated just as quickly as the unemployment rate, both at an aggregate and a disaggregate level, and hence improve policy makers ability to assess current labour market developments.

Keywords: Labour market tightness; Business cycles; Unemployment (search for similar items in EconPapers)
JEL-codes: C41 E32 J64 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2003-03-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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