chapter  9
21 Pages

HIDDEN UNEMPLOYMENT AND THE LABOUR MARKET

ByHilary Metcalf

It is widely recognized that many policies to reduce unemployment have the side effect of bringing more people into the labour force. This is usually seen as a problem: it prevents the unemployed from taking all newly created jobs; and it means that greater measures are required to achieve a given fall in unemployment. In effect, people who did not really want jobs are seen as taking jobs from the unemployed. However, bringing ‘nonparticipants’ into employment is as important to the economy (although not to the standing of the government) as placing the recognized unemployed in jobs. Both allow the economy to benefit from a better use of its human resources and utilize the investment made in education, training and work experience. Therefore does it matter that ‘non-participants’ gain some of the jobs instead of the unemployed?