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OECD 2006 Data on employment, EU, France, US

by wchurchill Fri Mar 31st, 2006 at 06:57:17 AM EST

A curse, and a blessing, on you Jerome for providing a link to this OECD Fact Book, which has been an insidious invasion of my evening time.  I've had some fun (?) looking at these numbers, and I thought I would share my "noodlings on a yellow pad" with the group--probably put everyone to sleep, which is where I should be midnight in California.  There are a huge amount of numbers here, so as I sketched things, I decided I could only handle three sets of data, and I chose EU15, France (which on some of the numbers seemed close to Germany and Italy) and the US.  I was focused on the employment rate, and I looked at the trend over a 15 year period, 1990--2004, but present numbers below for 2004:

Promoted by Colman


*    The overall employment rates for the three groups were:
o    EU15        64.6%
o    France        62.4%
o    USA        71.2%

*    For men the rates were:
o    EU15        72.4%
o    France        68.1%       
o    USA        77.2%

*    For women the rates were:
o    E15        56.7%
o    France        56.7%       
o    USA        65.4%

*    The overall employment for people 25 to 54 years of age:
o    E15        77.6%
o    France        79.3%
o    USA        79.0%

*    The overall employment for people 55 to 64 years of age:
o    EU15        42.3%
o    France        40.6%   
o    USA        59.9%

*    The overall employment for people 15 to 24 years of age:
o    EU15        38.8%
o    France        26.4%
o    USA        53.9%   

My thoughts after looking at the numbers are as follows:
*    While different societies may have different views as to when one normally begins work, and when one normally retires, almost all would include the ages of 25 to 54 years of age as "working years".  In this age group, the employment rates are extremely close, ranging from 77.6% for the EU15 to 79.3% for France--France and the US being virtually identical at 79.3% versus 79%.
*    Overall employment rates for all age groups and genders are higher in the US as compared to the EU15 or France--71% versus 62% and 65%.  Much of this differential is explained by the following comments.
*    The overall employment rate for the 15 to 24 year group shows a significantly higher rate for the US.  However, as we have shown in diaries, at least as far as France is concerned, much of this is due to this age group attending university at a much higher participation rate than the US--and in fact the unemployment rate as a percentage of the entire age group is similar between the US and France, and perhaps this argument may carry overf to the OECD as a whole.
*    The employment rate for the 55--64 age group is significantly higher in the US--roughly 60% versus 40%.  It would be interesting to understand this in more detail, but I believe the French retirement age is 60, versus the American age of 65 (moving up to 67), and this may account for a lot of this.  Question though, is would it account for all of this--it's a big differential.
*    French/OECD females participate at a similar level, but lower than the US--the differential being 8%--it's unclear if this is an explanation since the differential between French/OECD men and US men is also 8%.

I'm seriously looking for input on this data and my tentative conclusions on the data.  But if I'm interpreting the above data correctly, it would seem that 1) France and overall OECD figures are in general similar, 2) employment rates are actually higher in the US than in France/OECDE, but 3) the differential is mainly in the 15-24 and 55-64 age groups, which could be explained by programs supporting more education in the early years, and early retirement in the later years.

I'm really presenting this as a strawman for comment--I could have totally missed something here, it's late in California.  I have not spent enough time going through this data to be confident of my conclusions.  And I would love data driven challenging comments.  *But this data does not seem to support an assumption we sometimes see that there is a large "I've given up looking for a job" group in the US, at least as compared to the EU 15 and France*.

Looking forward to your input (at least somewhat, will be embarrassed if I've totally made a basic logic mistake and I'm not looking forward to that revalation.)

Display:

*    The overall employment for people 55 to 64 years of age:
o    EU15        42.3%
o    France        40.6%  
o    USA        59.9%
Ageism, a tolerated epidemic of using early retirement to ditch more senior [hence more costly] employees at the state's cost, and the fact that, unlike in the USA, retirement pensions are paid by the state and it is illegal for retirees to work [many people in the US retire, collect a pension from their employer, and then go on and do something useful].


*    The overall employment for people 15 to 24 years of age:
o    EU15        38.8%
o    France        26.4%
o    USA        53.9%    
Cultural divide: a young person's place is in school, and accordingly there is much state and family support, as well as a perverse unwillingness by employers and schools to organize their schedules to make work and study compatible.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 04:26:52 AM EST
illegal for retirees to work

Really? Where?

by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 06:24:38 AM EST
[ Parent ]
In Spain if you are getting a retirement pension you can't work.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 06:25:36 AM EST
[ Parent ]
Wow. That seems weird.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 06:35:01 AM EST
[ Parent ]
Well, it makes sense if you think of it as benefit fraud... If you're still working, you're not retired, so how can you collect a retirement pension?

That is, we're talking state pensions (social security). I suppose it's an entirely different matter if you (or your employer) bought a private annuity and you are collecting that whether or not you still work.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 06:42:13 AM EST
[ Parent ]
Forgot the standard disclaimer... I Am Not A Labour Lawyer, but

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 06:42:44 AM EST
[ Parent ]
To complete your quote: but I play a dashing - if slightly geeky - one on TV.

Is that right?

by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 06:59:43 AM EST
[ Parent ]
No, I stutter. But I have a syndicated column on a European blog.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 07:08:55 AM EST
[ Parent ]
But this data does not seem to support an assumption we sometimes see that there is a large "I've given up looking for a job" group in the US, at least as compared to the EU 15 and France.
I wouldn't want this conclusion to go unnoticed, in the sense of asking for your feedback, hopefully based on the data.
by wchurchill on Fri Mar 31st, 2006 at 06:47:03 AM EST
I don't see anything in the data you post (by age group) on the size of the discouraged worker population anywhere.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 06:52:03 AM EST
[ Parent ]
I'm probably missing some other data that you and Colman are looking at, but given that the US employment rate is higher than OECD data for EU15 in all categories, (and for France as well), where are the discouraged workers in the US?
by wchurchill on Fri Mar 31st, 2006 at 07:19:02 AM EST
[ Parent ]
And where are the EU discouraged workers? You tell me, I haven't been looking at the data.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 07:22:50 AM EST
[ Parent ]
See my remark below and the BLS data: it's the US government that says they exist, not me.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 07:24:55 AM EST
[ Parent ]
my comment was intuitive based on looking at the data.  Drew then posted a WSJ article:Fed Analysts Say Low Jobless Rate
Doesn't Mask Labor Market Woes
which comes to the same conclusion. The WSJ article is based upon a working paper prepared by Fed analysts, The Recent Decline in Labor Force Participation and its Implications for Potential Labor Supply which lays out the argument in much more detail.

I made my own attempt at summarizing the argument.  While I think this is a strong case made by the Fed analysts, Colman correctly points out that this seems to be a debate between economic analysts at the Fed, at this point.

by wchurchill on Fri Mar 31st, 2006 at 09:29:39 PM EST
[ Parent ]
I've seen it ... the BLS don't agree with you. Check out their U-6 figure, though that includes underutilised employees as well I think. The difference between unemployment (U-1) and U-6 runs at roughly 4% or so whereas it seems - and I've been looking for good data on this - that it differs by about 1% or so in Europe because the discouraged workers are encouraged to at least pretend to look for work by the conditions of welfare payments in Europe. It's the same people, just falling into different boxes because of different systems.

I'd expect lower labour participation rates in countries with more comprehensive welfare systems by the way.

(Busy today catching up, so this comment is only about 70% thought out!)

by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 06:53:27 AM EST
[ Parent ]
For instance a man made redundant nine months from retirement with a lump sum payment who has therefore no intention of getting a job is encouraged to pretend to look for work so that he can collect unemployment benefit until his old-age pension becomes payable at 65. In the EU system he counts as unemployed. In the US he'd either leave the workforce or count as discouraged.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 06:56:23 AM EST
[ Parent ]
thanks, I'm up too late after looking at this insidious report.  I'll have to look at the BLS numbers tomorrow and try to understand the concept.  Just seems odd from an intuitive standpoint that as you break down the categories, you find more people working in each category for the US versus the EU15, but the US would have more discouraged workers?.  I'll try to dig in and understand tomorrow (or I guess later today).
by wchurchill on Fri Mar 31st, 2006 at 07:31:28 AM EST
[ Parent ]
Here is the BLS report I'm referring to.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 07:40:03 AM EST
[ Parent ]
thanks for this link.  it is quite a rabbit hole as you say elsewhere.  I'm going to follow through other links, and continue with this for a while.  but it does seem incredibly difficult to adjust for the differences in reporting between the two systems.  I'm leaning toward just accepting the numbers as reported--defeated by the system I guess.
by wchurchill on Fri Mar 31st, 2006 at 01:18:37 PM EST
[ Parent ]
You can't do that. It's quite clear that the differences invalidate any comparisons.

If I could find statistics equivalent to U-6 for European countries I'd be a lot happier at making comparisons. I think that the U-1 to U-6 spectrum, combined with measures like labour participation and job quality measures give you a reasonable picture of employment situations in different places.

by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 02:32:25 PM EST
[ Parent ]
NASA treated metric and imperial units as interchangeable, so wchurchill has a point there...

...the probe crashed on landing as a result, so you have a point, too...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 02:36:15 PM EST
[ Parent ]
Your comment is of course correct,,,,but it's just frustrating when the comparisons don't exist.  I also think the U-6 is a good measure, as are the others, though I'm not wild about the ones with discouraged workers--it just doesn't seem "crisp" enough the definitions,,,,and also doesn't seem to be a huge impact.

For some things I would like to write about, I think the participation rate numbers are going to be adequate--I'm thinking of issues such as the ability to support retiring workers.  Are you satisfied that comparisons using participation rates are adequatelyly comparable?

by wchurchill on Fri Mar 31st, 2006 at 03:08:28 PM EST
[ Parent ]
Depends what you're talking about: they're affected by cultural issues.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 05:29:55 PM EST
[ Parent ]
Actually, I'd argue they have roughly the same number of discouraged workers, except that they get counted differently.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 07:42:30 AM EST
[ Parent ]
The Fed released a new report on this yesterday.  I'm not sure if it's in the other newspapers -- I didn't see it in the NYT -- but the WSJ had a short article on it.  (As always, if it's behind the subscription wall, let me know.)

Apparently the Fed is flip-flopping a bit.  The Boston Fed, you'll recall, was the one that had initially issued the report saying that unemployment was artificially low.  Now the DC Fed says that's false.  The participation rate, according to the BLS, has fallen from 67.3% at its peak in 2000 to 66.1% today.  They -- the report was written by staff economists, I think -- suggest that this is normal, since participation tends to rise and fall with booms and busts.  (It's rising, again, now, from the low of about 65.7% in 2005.)  Also, they bring up the demographic trends.

I'm not sure how this compares with the U-6 figure that Colman mentioned.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Mar 31st, 2006 at 07:32:41 AM EST
[ Parent ]
thanks Drew, the WSJ article was good, and linked to the Fed report which was also good.  both support your summary.  I'm quoting one part of the Fed report below.
by wchurchill on Fri Mar 31st, 2006 at 01:39:34 PM EST
[ Parent ]
I'd like to remind everyone here that I've been saying this since my first days on ET: France's unemployment is structural. It's been stable, between 9-12% for 20 years now. It is an economic factor. Unemployed people account for a majority of company creations, they pay VAT, they are part of the system. This is the way it is. 20 years is a long time. If it's worked all along, then it'll keep on working. Plus ça change et plus ça ...
by Alex in Toulouse on Fri Mar 31st, 2006 at 08:01:34 AM EST
Reform!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 08:04:47 AM EST
[ Parent ]
Ré-sis-tance!!!!!!!

by Alex in Toulouse on Fri Mar 31st, 2006 at 08:09:08 AM EST
[ Parent ]
Did anyone here comment on Pfaff's March 29th IHT article, in which he says:

A recent international opinion poll on the free-enterprise and free-market system, found that 74 percent of the Chinese say they think it the best system of all, compared to only 36 percent of the French. (The Germans were not far off the French.)

by Alex in Toulouse on Fri Mar 31st, 2006 at 08:48:16 AM EST
[ Parent ]
Of course they do: if you live under communism, the free-market looks pretty good. If you live under a pure free-market communism starts to sound good.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 08:49:12 AM EST
[ Parent ]
Maybe it's just because China is only communist in name, just like France is only not communist in name. My elder brother always refers to France as "North Korea's last little buddy".
by Alex in Toulouse on Fri Mar 31st, 2006 at 08:54:08 AM EST
[ Parent ]


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Mar 31st, 2006 at 02:56:47 PM EST
[ Parent ]

That's the unemployment rate for different age categories in France (as a % of the active population)

The seniors have both low employment and low unemployment, which means that they have left the active population altogether.

The youth have low employment and high unemployment. I have also read that the inactive rate is unusually high in France (that's also OECD data, but it's not avialable for free, and I have not received the paper version of the factbook yet), meaning that there might be some hidden unemployment in there as well.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Mar 31st, 2006 at 08:06:28 AM EST
Hmmm, it's £35 only. Do you think they'd give us a group or institutional rate to buy multiple copies, since we are a registered think tank? Wait, we're not! Er...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 08:11:03 AM EST
[ Parent ]
How hard is it to become a registered think tank?
by Metatone (metatone [a|t] gmail (dot) com) on Sat Apr 1st, 2006 at 03:41:16 AM EST
[ Parent ]
I was just kidding... Is there such a thing as a Think Tank Registry?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Apr 1st, 2006 at 03:51:35 AM EST
[ Parent ]
Where is Alexandra and her population pyramids when we need her?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 08:15:28 AM EST
[ Parent ]
I've been away tied down with family and work responsibilities. I'm glad the population pyramids are still in demand ;-) I'm still rather swamped but will be stopping by ET a little more now that I'm back on a high speed internet connection.
by Alexandra in WMass (alexandra_wmass[a|t]yahoo[d|o|t]fr) on Tue Apr 11th, 2006 at 02:54:03 PM EST
[ Parent ]
The Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) has similar welfare states but different economies. Inspired by wchurchill I figured it might be fun to compare the Nordic countries not with each other (as we often do up here with strong sibling rivalries (today headline: swedes smartest in the Nordic countries)) but with the political enteties compared by wchurchill.

The Nordic countries has a total population of 24,5 million (Cia world factbook) and longstanding political cooperation through the Nordic council (including free movement). Norway and Iceland are not part of the EU but of the old EFTA, and associated to EU through the EES treaty. If counted as one country (I have weighted individual countries stats against their population) the Nordic countries would have the following stats:

*    The overall employment rates:
o    EU15        64.6%
o    France        62.4%
o    USA        71.2%
o    Nordic countries   73.2%

*    For men the rates were:
o    EU15        72.4%
o    France        68.1%        
o    USA        77.2%
o    Nordic countries   75.5%

*    For women the rates were:
o    E15        56.7%
o    France        56.7%        
o    USA        65.4%
o    Nordic countries   70.2%

*    The overall employment for people 25 to 54 years of age:
o    E15        77.6%
o    France        79.3%
o    USA        79.0%
o    Nordic countries   82.8%

*    The overall employment for people 55 to 64 years of age:
o    EU15        42.3%
o    France        40.6%    
o    USA        59.9%
o    Nordic countries   63.7%

*    The overall employment for people 15 to 24 years of age:
o    EU15        38.8%
o    France        26.4%
o    USA        53.9%  
o    Nordic countries   48.3%

Most notably is the high female participation. Not surprising it is connected with the welfare state, services such as communal daycare for children and communal care for the elderly moves traditionally female tasks from an unpaid sphere (the home) to a paid work (daycares and caring for the elderly) as well as making it more possible to combine children with work.

The Nordic countries also have high participation among elder citizens (swedish retirement age is around 65 suspect similar in the other countries). Iceland, Norway and Sweden has a really high rate while Denmark and especially Finlad has a more normal rate.

There is also a high participation among young people, but with big difference between the countries (Denmark, Norway, Iceland; high youth participation. Sweden and Finland: just above EU-average).

In conclusion: Nordic welfare state(s) doing fine when it comes to employment.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Mar 31st, 2006 at 09:20:01 AM EST
Yay for the welfare state!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 09:22:21 AM EST
[ Parent ]
In conclusion: Nordic welfare state(s) doing fine when it comes to employment.

Killing yourself at work, rather :)) Ré-sis-tance!!
(just taunting)

by Alex in Toulouse on Fri Mar 31st, 2006 at 09:28:57 AM EST
[ Parent ]
Well, you know the protestantic work ethic.

But really to compare working yourself to death I think you have to compare hours worked/employed.

Which I have done (once the spreedsheat has been readied there is no stop to the fun):

o    France        1520
o    USA        1824
o    Nordic countries   1568

Large spread within the Nordic countries though. Norwegians (as the dutch) hardly are ever present at their work (a mere 1363) while the icelanders slave away in american fashion (and Iceland also has an employment rate at 82.8%, they can not do much but work). Finnish people also work long hours while the danes and swedes takes french style vacations.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Mar 31st, 2006 at 09:45:17 AM EST
[ Parent ]
I've always been impressed with the take on life in Nordic countries. It's very successful,
by Alex in Toulouse on Fri Mar 31st, 2006 at 09:52:55 AM EST
[ Parent ]
No question that the Nordic model is impressive.  It certainly would be great if other countries (EU, US, others) could find portions to adapt to their own situation.  When this comes up in conversation with my friends, the general reaction is always very positive.  The social and economic systems are very enviable.  The conversation quickly turns to "is Scandanavia unique?", and how transferrable is the system.  Uniqueness generally focuses on a set of impressions that Americans have about the Nordic countries, such as
  1.  there is not a lot of ethnic diversity, and there are fairly consistent values across the population.  How much does this contribute to overall stability of the country and model?  Very different than the US?
  2.  to what extent does oil money impact the results?  but I think that's just Norway, therefore some impact, but not a huge amount.

Thanks for compiling the data.
by wchurchill on Fri Mar 31st, 2006 at 12:48:05 PM EST
[ Parent ]
there are fairly consistent values across the population
Including solidarity over individualism. I wonder what role Lutheranism plays in this.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 02:31:21 PM EST
[ Parent ]
There are common cultural traits yes, but I really reluctant to ascribe any big importance to it. Part of my reluctance is that it fits into the cultural stereotype discourse which Jerome has been fighting when it comes to France. In the Scandinavian countries case it is mostly positive (expect for that part about suicidalness, which is false by the way). In part it is some very succesfull country-branding and in part I guess it is the general willingness to see things in cathegories.

Oil on the other hand I can easily discuss. The only Nordic country with much oil or natural gas is Norway. In terms of employment Norway is average among the Nordic countries but when it comes to worked hours/year they stand out (1363 hours/employed). That has to do with the oil, oil has made Norway the richest among the Nordic countries. The reason I smacked together the countries was to get less effect from the fact that this is small countries where one factor can make a big difference. Together they have more varied economy as they differ substanially from each other. Sweden and Finland has a lot of forest and high-tech industry (remember the fight between Ericsson and Nokia), Denmark on the other hand has a huge agriculture sector (always had, that was the reason Denmark for so long dominated among the Nordic countries), Norway has oil and Iceland has fish.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Mar 31st, 2006 at 03:32:48 PM EST
[ Parent ]
I've always wondered how much the success of a single company like Nokia or Ericsson has on the macro statistics of their home countries.

Not to deny their success, but they have a very noticeable impact on the economies they are in - R&D numbers, exports, lots of technology related indices, productivity, etc.... Nokia used to make up 70 or 80% of the total stock market value of the country at a time, for instance, and a dman big chunk of Finland's exports.

For small countries, one big successful company can make the difference between average and world leader, and fundamentally, this is a question, at heart, of luck.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Mar 31st, 2006 at 04:39:54 PM EST
[ Parent ]
I think it depends somewhat on which macro statistics you choose. Stockvalue sure, but for example employment I am not as sure. (Sidenote on stockvalue: Sweden has twice the population of Finland, and Ericsson held at its peak something around 40% of the total swedish stock value)

For a company to take of and become world leading it depends a lot on the rest of the society. In Ericssons case, there are the connection with the swedish telephone administration, SAABs military aircrafts and a big electronics industry (for example ABB).

When a company takes of in a little country they suck up the availble resources, mainly personel, and almost all other companies around them adjust. This might create a larger-than-life impression. If they had not taken of, chances are something else would have.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Mar 31st, 2006 at 05:21:29 PM EST
[ Parent ]
There is a big cultural factor, too. Compare Minnesota (with its large Scandanavian population) to the rest of the country and it looks pretty good. I suspect that this applies acrosss Europe also. The cultural differences from one country to another probably outweight the differences in the systems.
by asdf on Sun Apr 2nd, 2006 at 10:37:29 AM EST
[ Parent ]
Glad you took a try at this wchurchil, and you came up with something which is enjoyable to read.
I would never have imagined an employment diary could be !

When through hell, just keep going. W. Churchill
by Agnes a Paris on Fri Mar 31st, 2006 at 09:28:50 AM EST
Excuse me?
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 10:01:37 AM EST
[ Parent ]
Hahahahaha!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 10:02:13 AM EST
[ Parent ]
I looked at the BLS report Colman mentioned.

According to the OECD report:

The overall employment rates (for the 15-64 age group) in 2004 were:
(Persons in employment as a percentage of population in that age group.)
o    EU15       64.6%
o    France     62.4%
o    USA        71.2%

(According to Eurostat that number would be 64.7% for the EU15 and 63.1% for France in 2004. Pretty close.)

According to the 2004 BLS report for the USA:
o    Labor force participation       66%
o    Employment-to-population ratio  62.4%

Now I´ve read that the US BLS numbers are based on the "civilian noninstitutional population aged 16 and older".
Which groups are / aren´t included in the BLS data to boost their numbers from 62.4% to 71.2% in the OECD study? What accounts for that 9% difference?
Armed forces, prisons?

And second the numbers for the 55-64 year old group.

According to the OECD report:

The overall employment for people 55 to 64 years of age:
(Persons in employment as a percentage of population in that age group.)
o    EU15        42.3%
o    France      40.6%  
o    USA         59.9%

(According to Eurostat that number would be 42.5% for the EU15 and 37.3% for France in 2004.)

According to the 2004 BLS report for the USA (55 and older):
o    Labor force participation       36.5%
o    Employment-to-population ratio  35.1%

From 35.1% to 59.9%???
I could understand a 9% jump but a 25% one?

"Among persons aged 55 years and older, the labor force participation rate continued to trend upward in 2004, to 36.5 percent in the fourth quarter, compared with 36.0 percent a year earlier. Labor force participation among this group has been increasing since the third quarter of 1993. The proportion of older persons who held jobs also rose in 2004. In the fourth quarter of 2004, 35.1 percent of those 55 years and older were employed--a figure that was 7.1 percentage points higher than in the third quarter of 1993, the most recent low point in the employment-population ratio for this group."

by Detlef (Detlef1961_at_yahoo_dot_de) on Fri Mar 31st, 2006 at 11:09:49 AM EST
You're not going to like this answer but there are generally pretty good documents on the methodology used. These reports are rabbit holes of definitions and subtle methodological differences that you can very easily fall down for ages.

More usefully, the OECD says "people 55 to 64" and the BLS say "55 and older". That might account for it, I suppose.

by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 11:14:22 AM EST
[ Parent ]
In fact, that might account for the first difference as well.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 11:15:29 AM EST
[ Parent ]
And you didn't even have to make calculations! Just using your knowledge of how they often differ. Unfair...

</sulking>

The US having 36 millions (CIA) over the age of 65 goes a long way to explain both differences, though it still leaves 20 millions in the army and prisons...

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by A swedish kind of death on Fri Mar 31st, 2006 at 11:36:45 AM EST
[ Parent ]
I just read the definitions. See the evening open thread ...

I'm not convinced it explains the first one though. I suspect some other difference in method is contributing as well.

by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 11:39:15 AM EST
[ Parent ]
Simulcomment again!

I'll check out the open thread.

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by A swedish kind of death on Fri Mar 31st, 2006 at 11:41:23 AM EST
[ Parent ]
I have read the evening open thread without understanding the connection between unemployment data and Soduko. Most be some strange economical connection :)

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Fri Mar 31st, 2006 at 11:47:30 AM EST
[ Parent ]
It's the "I'm still a mathematician at heart" bit, combined with "I [don't know anything] just read the definitions".

A mathematician knows another mathematician.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Mar 31st, 2006 at 11:55:02 AM EST
[ Parent ]
Should have understood it. After all, I once used to be able to translate between mathematicians and economists while being neither. Guess I am getting old.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Fri Mar 31st, 2006 at 12:30:26 PM EST
[ Parent ]
You're not going to like this answer but there are generally pretty good documents on the methodology used. These reports are rabbit holes of definitions and subtle methodological differences that you can very easily fall down for ages.

Yes, I know. :)
That´s why I was willing to accept a 9% difference. But a 25% difference? That´s almost doubling the number of employed persons in that age group. I couldn´t find anything on the OECD webpage (and the definitions there) that would explain such a difference.

More usefully, the OECD says "people 55 to 64" and the BLS say "55 and older". That might account for it, I suppose.

That´s probable... since the BLS says:
The proportion of workers aged 65 and older who worked in March and received a pension the previous year was 10 percent in 1994. In 2000, the first year that the elimination of the earnings test took effect, the proportion was 11 percent, and it increased to 13 percent in 2004.

So if the BLS really includes everyone "55 years and older" around 13% of the group "65 years and older " are included in the "working" group too. Given that the life expectancy in the USA in 2001 was around 77 years,
I suspect that almost everyone in the "55-64 age group (10 years) has to work at least "1 hour a week" to account for the 13% workers of the "65 years and older" group with their average life expectancy of 12 years.

No early retirement for anyone in the USA.

by Detlef (Detlef1961_at_yahoo_dot_de) on Fri Mar 31st, 2006 at 04:45:49 PM EST
[ Parent ]
civilian nonistitutional, hm...

Ok, military folks are 100% employed (or they seise to be military). Prisoners are at least not unemployed. But 9% on total population? How many are there in the US military and prisons? How many need there be to explain a 9% gap?

Rough calculation:
US pop: 300 million
adult: 80%
adult pop: 240 million
civilian, not prison: X
military and prison: 240-X

0.624*X+1*(240-X)=0.712*240
X=184
240-X=56

56 million in the US military and prisons is unreasonable, so the exculsion of military and prisoners can not explain that difference.

The difference among elders are even worse...

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by A swedish kind of death on Fri Mar 31st, 2006 at 11:31:51 AM EST
[ Parent ]
You're right: the age difference can't account for the overall difference.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 11:34:13 AM EST
[ Parent ]
Simulcomment!

(Simulcomment, from simultaneos comment: when you comment on something one person has written and said person at the same time comments on what you have written.)

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Mar 31st, 2006 at 11:40:16 AM EST
[ Parent ]
Drew referenced a WSJ article which referenced a recent Fed report, and here's a paragraph that seems to summarize their current thinking on changes in participation rates:
On balance, the results suggest that most of the decline in the participation rate
during and immediately following the 2001 recession was a response to business cycle
developments. However, the continued decline in participation in subsequent years and
the absence of a significant rebound in 2005 appears to reflect other more structural
factors. Indeed, the current level of the participation rate is close to our model-based
estimate of its longer-run trend level, suggesting that the current state of the labor market
is roughly neutral for the participation rate. Finally, projections from the model suggest
that many of these structural factors will continue to put downward pressure on the
participation rate for some time, so that any future cyclical fluctuations in participation
will take place around a declining trend. This continued downtrend, coupled with slower
projected population growth and an apparent downtrend in the average workweek,
suggests that trend growth of aggregate hours will slow further in coming years.

If I'm understanding this very lengthy paper correctly, they are now saying:

  1.  There was a drop in participation rates during and after the recession of 2000, and it did represent a "discouragement" factor that was consistent with what has been seen in other recessions.
  2.  However the continuing decline and lack of rebound, in participation rate is due to other factors, one of which is the aging of the baby boomers.  This aging, plus other structural factors, will according to their model, lead to a continuing drop in the participation rate in the coming years.
  3.  I believe they are saying that unemployment data for the last several years does not include a "discouragement" factor of any significance.

As always, I look forward to comments.
by wchurchill on Fri Mar 31st, 2006 at 02:37:16 PM EST
That would appear to reflect a debate taking place between various staff economists.
by Colman (colman at eurotrib.com) on Fri Mar 31st, 2006 at 02:39:24 PM EST
[ Parent ]
good point, the paper is actually labeled preliminary draft.  It seemed very logical to me in reading it, but important for me to characterize is correctly.
by wchurchill on Fri Mar 31st, 2006 at 03:14:14 PM EST
[ Parent ]
At the risk of being repetitive, or of suggesting reading that everyone has done, the Boston Fed study by Katharine Bradbury to which the above Fed study appears to be replying is here.
by afew (afew(a in a circle)eurotrib_dot_com) on Sat Apr 1st, 2006 at 03:14:03 PM EST
[ Parent ]


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