Reconciling workless measures at the individual and household level. Theory and evidence from the United States, Britain, Germany, Spain and Australia

Individual- and household-based jobless rates can offer conflicting signals about labour market performance. We outline a means of quantifying and decomposing the extent of any disparity (polarisation) between individual- and household-based measures and apply this to data from five countries over 25 years. Comparing actual household workless rates with counterfactuals based on a random distribution of employment, we find evidence of growing disparities between individual- and household-based non-employment measures in all five countries. The extent of this polarisation varies widely, but for each country, most of the discrepancies stem from within-household factors than from changing household composition.