The impact of definitions to the measurement of unemployment: Evidence from the EU-LFS 2008-2015

The unemployment rate is an important indicator with both social and economic dimensions considered to signify a country’s social and economic wellbeing. For its measurement the European Union Labour Force Survey (EU-LFS) is using a synthesized economic construct according to the International Labour Organization (ILO) conventional definitions of the employed, unemployed and inactive. In this dissertation, people’s perceptions of their employment status as they compared to the ILO conventional definitions were investigated in order to decide whether or not conflicting and coinciding perceptions differed overtime within-nations and cross-nationally. The analysis was based on the 2008-2015 annual datasets for sixteen European countries: Austria, Belgium, Bulgaria, Denmark, Finland, France, Greece, Hungary, Ireland, Italy, Netherlands, Poland, Portugal, Romania, Spain and Sweden. The detailed examination of the demographic and social “profile” of Europeans’ coinciding and conflicting perceptions to the ILO conventional definitions revealed that the pattern of the demographic and social “profile” of conflicting perceptions within each country was in the main systematic overtime. But the surprisingly high percentages of Europeans’ perceptions of their employment status in agreement with the ILO conventional definitions indicated that this question should precede and not follow thequestions on the labour status according to the ILO conventional definitions or the questions on the registration at the public employment office as is the Eurostat instruction to participating countries. Also, two alternative definitions of the employment status were formulated as variations of the ILO conventional definitions. Comparison of these alternative measurements to the ILO conventional measure and the self-perceived measurement resulted in different distributions of the employment status. The investigation of the demographic and social “profile” of the unemployed resulting from the application of the self-perceived measurement and the two alternative measurements to the ILO conventional definitions of the employment status showed that they did differ. The more changes were identified overtime and at the national level for the demographic variables gender and age than the social variables marital status and level of educational attainment. Furthermore, the application of the two alternative measurements to the EU-LFS data resulted in an increase of the official unemployment rate in all countries. More remarked was the increase in the cases of Belgium, Hungary, Ireland, Italy and especially that of Romania. In all countries, the unemployment rate as defined by the ILO increased when the self-perceived measurement was applied except in the case of the Netherlands. The resulting increase was higher in the cases of Bulgaria, Hungary, Italy and Portugal. The results are reported for the age group 15-74 so as to allow for comparability with the ILO conventional definition of unemployment. This methodological study contributes to the growing research on the measurement of unemployment by demonstrating the importance of the measurements’ definitions and the complexity of classifying key variables used in social research.

Keywords: Employment status, ILO, EU-LFS, alternative measures of unemployment