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Real and perceived losses from unemployment: a cross-country study

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  • Keith A. Bender
  • Rebecca M. Neumann
  • John Douglas Skåtun

Abstract

This article compares the Unemployment Rate (UR) as a measure of inefficiency with several other potential measures across 18 Organization for Economic Co-operation and Development (OECD) countries. Results show that the UR is not a very good measure of relative inefficiency between countries, it overestimates the number of individuals who would get jobs if the market is clear, the Dead Weight Losses (DWLs) of UR are remarkably low even in high unemployment countries and the aggregate perceived monetary losses by the unemployed as a proportion of Gross Domestic Product (GDP) are also uniformly low, although inframarginal individuals in some countries may perceive their losses to be high.

Suggested Citation

  • Keith A. Bender & Rebecca M. Neumann & John Douglas Skåtun, 2013. "Real and perceived losses from unemployment: a cross-country study," Applied Economics, Taylor & Francis Journals, vol. 45(25), pages 3625-3636, September.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:25:p:3625-3636
    DOI: 10.1080/00036846.2012.727977
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    References listed on IDEAS

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    1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    2. Ms. Florence Jaumotte, 2011. "The Spanish Labor Market in a Cross-Country Perspective," IMF Working Papers 2011/011, International Monetary Fund.
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