Flexible measures for a flexible labour market

Abstract

"The system of labour market statistics in Australia is in need of reform. The principal measure of labour market performance, the unemployment rate, was developed in an era when the labour market was characterized by full-time male bread-winners. Over the last two decades, deregulation and structural change have transformed the labour market radically. Underemployment of part-time and casual workers is now a serious problem, as is the issue of overwork. Yet a proper understanding of these important trends is missing from public debate and policy-making because they are not captured in the official statistics. A single summary indicator cannot capture all of the dimensions of labour market. Rather than continue to attempt to place all Australians into one of three labour force categories and describe the performance of the labour market by dividing one category by another, this paper advocates a different approach. This would incorporate information on how many hours people would prefer to work as well as how many hours they do work. By asking respondents to the ABS’s Labour Force Survey to state both the number of hours they worked and the number of hours they desired to work it is possible to measure the nature and extent of unemployment, underemployment and overwork simultaneously, and to do so much more accurately than is currently the case."