Real and perceived losses from unemployment: a cross-country study |
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Authors: | Keith A Bender Rebecca M Neumann John Douglas Skåtun |
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Institution: | 1. Department of Economics , University of Aberdeen , Edward Wright Building, Aberdeen AB24 3QY , UK kabender@abdn.ac.uk;3. Department of Economics , University of Wisconsin-Milwaukee , PO Box 413, Milwaukee , WI 53201 , USA;4. Department of Economics , University of Aberdeen , Edward Wright Building, Aberdeen AB24 3QY , UK |
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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. |
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Keywords: | inefficiency unemployment cross-country underutilization of labour |
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