A fuzzy approach to the measurement of employment and unemployment

This chapter defines fuzzy measures of employment and unemployment using available information on the weekly number of hours worked and on the desire or need of workers to work more hours. The way in which the employed, unemployed and inactive population groups are identified affects the value of employment and unemployment rates. The unemployment rate is defined as the share of the total labour force that is unemployed, whereas the employment rate is the share of the working age population that is employed. A fuzzy measure of employment reflects the unmet need among the employed for working additional hours, thus accounting for labour under-utilisation. The concept of labour under-utilisation encompasses both time-related underemployment and involuntary part-time employment. The largest upward correction is seen among female workers, workers between 55 and 64 years old, foreign-born workers, third-secondary educated and those living in the North.