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How Tight is the Labour Market? A Micro-Based Macro Indicator

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Forfattere:

Gaure, Simen and Røed, Knut

År:

2003

Referanse:

Memorandum
Nummer i serie: 9

Summary

We develop a new indicator of labour market tightness, based on the pure calendar time changes in individuals’ transition rates from unemployment to employment. Based on Norwegian register data from the 1989-2002 period, we show that this indi-cator, in contrast to the aggregate rate of unemployment, correlates well with an ex-post-calculated GDP-based business cycle indicator, even around the time of business cycle turning points. The indicator can be calculated just as quickly as the unem-ployment rate, both at an aggregate and a disaggregate level, and hence improve pol-icy makers ability to assess current labour market developments.

Nøkkelord:

Labour market tightness, Business cycles, Unemployment

JEL:

C41, E32, J64

Prosjekt info:

Oppdragsgiver: Aetat Arbeidsdirektoratet og Finansdepartementet
Oppdragsgivers prosjektnr.:
Frisch prosjekt: 1412 - Stramhetsindikator for arbeidsmarkedet

Kontakt:

knut.roed@frisch.uio.no