The Iceberg Decomposition: A Parsimonious Way to Map the Health of Labour Markets

Stijn Baert

No 13512, IZA Discussion Papers from Institute of Labor Economics (IZA)

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-topopulation 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: labour market policy; inactivity; unemployment; employment; labour market indicators (search for similar items in EconPapers)
JEL-codes: J08 J23 J24 J64 J68 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2020-07
New Economics Papers: this item is included in nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - revised version published in: Economic Analysis and Policy , 2021, 69, 350 - 365

Downloads: (external link)
https://docs.iza.org/dp13512.pdf (application/pdf)

Related works:
Journal Article: The iceberg decomposition: A parsimonious way to map the health of labour markets (2021)
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)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp13512

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().