• Journal of Labour Economics
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• v.43 no.4
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• pp.117-141
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• 2020

The paper focuses on the question of whether and how the labor underutilization indicator supplements the unemployment rate. The research is based on the differences in the labor market behavior among three groups of the not-employed; the unemployed, potential labor force and the rest of outside the labor force. The annual transition rate among the labor market states shows that the potential labor force has the explicit unmet need for employment different from the rest of the outside the labor force. The multinomial logit regression controlling the effects of individual characteristics rejects the hypothesis that the potential labor forces are behaviorally identical to the unemployed. The evidence shows that the two indices should be interpreted distinctively.

• Journal of Labour Economics
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• v.33 no.3
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• pp.89-127
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• 2010

This paper explores the causes and solutions of the problem that the official unemployment rate does not adequately represent the reality of the employment situation in Korea. First, compared to ILO's international standards, there are several differences in the measurement of unemployment in Korea, for example, the treatment of unpaid family workers working less than 18 hours per week, the classification of persons who are waiting for a new job or temporarily laid-off, and the criteria of job search activities. The questionnaire structure of the Labor Force Survey in Korea also misleads the judgment of economic activity state. Comparing the responses of the basic survey to those of the supplementing survey, approximately 90% of the responses show discrepancies and this indicates the possibility of misclassification. Next, this paper suggests the extended unemployment indicators as alternative, based on the current survey. The extended unemployment indicators support the presence of significant amounts of hidden unemployed and underemployed. And, it is found that the analyses using those indicators are very useful for the investigation of many aspects of employment dynamics.