- Unemployment rate - the percentage of the labour force who are out of work.
- The unemployed x 100% divided by the labour force
In practice, it can be difficult to decide who is unemployed.
Labour Force Survey (LFS)
A measure of unemployment based on a survey using the ILO (International Labour Organisation) definiton of unemployment.
Survey of 60,000 households that collects a range of information including:
- Type of employment
- Educational qualifications
- A measure of unemployment that includes those receiving unemployment related benefits
- Most are claiming jobseeker's allowance (JSA)
- Claimants 'must declare that they are out of work, capable of, available for and actively seeking work in the week in which their claim is made'
Note: Labour force includes both the employed and unemployed
Difficulties in measuring unemployment
- LFS measure is thought to capture more of those who are unemployed
- Some people can be actively seeking work but not entitled to claim unemployment benefits e.g. young people under 18, those whose partner is working/claiming benefits.
- These people would not appear in the claimant count but would appear in the LFS measure
- LFS measure is widely used by the OECD and statistical office of the European Union
- Widespread international use is very suitable for international comparisons.
- LFS is more expensive to collect than the claimant count
- Claimant count is relatively cheap, as the data is a by-product of administrative records of people claiming benefits.
- Claimant count is also relatively quick to compile and is available earlier than the LFS based unemployment.
- Some people claiming benefits may not be seeking work - may be claiming benefits on false pretences
- Claimant count is not suitable for international comparisons because the categories of people entitled to benefits varies over time and between countries.