Unemployment

Employed: The number of people with a job. This figure normally does not include people working in the informal sector (e.g., unlicensed cab drivers, illegal workers, etc.).

Labor force: The number of people who either have a job or are actively looking for a job. This number excludes retirees, children, stay-at-home parents, full-time students, and other categories of people who are neither employed nor actively seeking employment.

Unemployed: People who are actively seeking employment but are currently without a job.

Long-term unemployed: People who have been out of work for a long time (more than 3 to 4 months in many countries) but are still looking for a job.

Frictionally unemployed: People who are not working because they are taking time to search for a job that matches their skills, interests, and other preferences better than what is currently available, or people who have left one job and are about to start another job. Frictional unemployment is short-term and transitory in nature.

Unemployment rate: The ratio of unemployed to labor force.

Activity ratio (or participation ratio): The ratio of labor force to total population of working age (i.e., those between 16 and 64 years of age).

Underemployed: A person who has a job but has the qualifications to work at a significantly higher-paying job.

Discouraged worker: A person who has stopped looking for a job. Discouraged workers are statistically outside the labor force, thus not counted in the official unemployment rate.

Discouraged workers and underemployed people may be considered examples of “hidden unemployment.”

Voluntarily unemployed: person voluntarily outside the labor force, such as a jobless worker refusing an available vacancy for which the wage is lower than their threshold or those who retired early.