Explain Why It is Difficult to Measure Unemployment

Measuring unemployment accurately is made difficult because of imperfect knowledge. Not all instances of unemployment are recorded, and some records of unemployment may not be accurate. Because the unemployed are eligible for benefits, some individuals may work, but not disclose it, and claim benefit.

Conversely, many unemployed may not bother to inform the authorities, and this unemployment goes unrecorded.The Claimant Count records those claiming unemployment benefit (Job Seekers Allowance, or JSA) and can prove they are actively looking for work. It excludes housewives and those on training schemes. The Claimant Count may not reflect the true level of unemployment in the UK economy, given that not all the unemployed will bother to claim, and some are deterred because they cannot prove they are looking for work. This is especially true of part-time employees who are much less likely to register as unemployed compared with full-time workers.While some individuals may fraudulently claim, it is generally recognised that the Claimant Count under-estimates actual unemployment levels. The labour force survey is undertaken by the International Labour Organisation (ILO) and is a more direct assessment of unemployment, rather than those who claim benefit.

It is based on an interview of a sample of 60,000 households (approximately 120,000 people) and tries to measure β€˜unemployment’ as a whole, rather than those simply claiming benefits.To be considered as being unemployed individuals must: Have been out of work for 4 weeks. Be able to start work in the next 2 weeks, so they must be readily available for work. Workers only need to be available for work for one hour per week, so part-time unemployment is included in the measurement, though these workers are unlikely to claim unemployment benefit. This tends to make ILO unemployment much higher than the Claimant Count.

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