The claimant count and the ILO measure of unemployment

Overview

ILO measure of unemployment collected in the UK, claimant count measure and claimant count normally lower than the ILO figure.

What you need to know

Answer each one before you reveal it.

Questions from this subtopic

Each one with the model answer underneath.

1. 1

   What two conditions must a person satisfy to be counted as unemployed under the International Labour Organisation definition?

   Model answer

   The person must be without a job but available to start work within the next two weeks, and must have been actively seeking work in the previous four weeks. Someone who has found a job and is waiting to start within the next two weeks also counts. Both conditions matter: being without work is not enough on its own, since a person must also be available and searching to be classed as unemployed rather than economically inactive.

2. 2

   How is the ILO measure of unemployment collected in the UK?

   Model answer

   It comes from the Labour Force Survey, a large sample survey of households conducted continuously, in which people are asked about their activity in a reference period. Because it is a survey of what people actually do, it captures anyone meeting the definition regardless of whether they are entitled to any payment from the state. The results are grossed up from the sample to produce estimates for the whole population.

3. 3

   What does the claimant count measure?

   Model answer

   It counts the number of people claiming unemployment-related benefits and required, as a condition of receiving them, to seek work. It is compiled from administrative records of the benefit system rather than from a survey, so it is essentially a by-product of paying benefits rather than a purpose-built measure of joblessness.

4. 4

   Why is the claimant count normally lower than the ILO figure?

   Model answer

   The claimant count only includes people who both qualify for and actually claim the relevant benefits, whereas the ILO measure includes anyone searching and available for work. Many genuinely unemployed people are excluded from the claimant count: those disqualified by a partner's income or by household savings under a means test, those who have not built up sufficient contributions, and those who simply do not claim. Since the ILO definition has no such conditions, it captures a larger group.

5. 5

   Under what circumstances could the claimant count exceed the ILO measure for a particular group?

   Model answer

   It can happen where someone claims a work-related benefit while not meeting the ILO test of active search and availability, for instance if they are not genuinely searching but comply formally with the conditions of the claim. It can also occur where a person works a small number of hours, which counts as employed under the ILO definition since any paid work in the reference week qualifies, while still receiving benefit. These cases are a minority, which is why the claimant count is lower overall.

6. 6

   Compare the strengths of the claimant count and the ILO measure as indicators of unemployment.

   Model answer

   The claimant count is available quickly, is cheap because it uses records that already exist, is a complete count rather than a sample so it carries no sampling error, and can be broken down to very small geographical areas. Its fundamental weakness is that it measures entitlement rather than joblessness, so a change in benefit rules alters the figure without a single person's employment status changing. The ILO measure applies a consistent definition unaffected by benefit policy and permits international comparison, which is its principal strength. Its weaknesses are that it is a sample survey and therefore subject to sampling error, it is published with a longer delay, and it is far more expensive to produce.

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