Measuring Unemployment (2020 Update)

In this short video we look at how the unemployment rate in the UK is measured.

How is unemployment measured in the UK?

The official measure of unemployment in the UK is based on the Labour Force Survey.

This asks 40,000 households each month whether they are employed, unemployed or economically inactive.

To be counted as being unemployed, a person must be:

1.Without a job, want a job, have actively sought work in the last four weeks, and are able to start work within the next two weeks.

2.Out of work, have found a job and are waiting to start it in the next two weeks.

The unemployment rate is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed.

Many students confuse the unemployment rate with the employment rate or fail to see that the data is expressed as a percentage of the labour force.

The Claimant Count

The claimant count is the (seasonally adjusted) number of people receiving Job Seekers Allowance.

The claimant count only includes those eligible for benefits and is therefore a less reliable measure of unemployment.

Examine the accuracy of unemployment data

1. The LFS is intended to be representative of the entire population of the UK, but there is always scope for sample error (but sample size is high)
2. Measured unemployment excludes the economically inactive – often complex reasons for people not searching for work
3. Unemployment is not the same as under-employment (i.e. people working part-time but who would prefer a full-time job)
4. In all countries, there is disguised “hidden” unemployment with many people working in informal labour markets