- Labour Force Survey (LFS) is based on the International Labour Organisation (ILO)'s definition of unemployment and uses a survey of the labour force to collect the information. Information including type of employment, earnings and educational qualifications of the labour force, as well as unemployment.
- At the same time it publishes unemployment figures based on the claimant count. This is a monthly count of those claiming unemployment-related benefits. 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'.
Difficulties of measuring unemployment
- The LFS measure is thought to capture more of those who are unemployed.
- The LFS is widely used by most EU members and other countries, therefore it is suitable for international comparisons. The LFS also provides a range of information but it is more expensive to collect than claimant count. There is also a risk that it may be subject to sampling error.
- The claimant count measure is relatively cheap. It is also relatively quick to compile and is available earlier than the LFS-based unemployment data.
- Some people claiming benefits may not be actively seeking work.
- The claimant count is not suitable for international comparisons. This is because the categories of people entitled to benefits varies over time and between countries.
The causes of unemployment
- Cyclical unemployment, arises due to a lack of aggregate demand.
- Structural unemployment. Although there may be job vancancies, employers may not be willing to employ those people who apply because they lack the right skills. It might also be that there are job vacancies in one part of the country but the unemployed live in…