Measuring Employment and Unemployment from a Fuzzy Perspective. A Comparative Analysis Across European Countries

According to the standards set by the International Labour Office, people of working age who have performed some remunerated work during a specified short reference period are classified as employed, regardless of how many hours they have worked, while those who have not been able to work at all (despite wanting to) are classified as unemployed. As observed by many experts in the field, this rigid division between employed and unemployed can conceal labour markets with deeply different characteristics. In particular, the average number of hours worked and, more importantly, their distribution across employees may vary significantly across countries. The aim of this paper is to define fuzzy indicators of employment and unemployment by using the available information on the number of hours worked and the satisfaction or dissatisfaction of workers with this. In this approach, each person in the labour force is assigned a degree of employment between 0 and 1, where 0 means full non-membership in the fuzzy set of employed (and full membership in the fuzzy set of unemployed) and 1 means full membership in the fuzzy set of employed. To show the potentiality of the proposed method, we apply fuzzy measures to Labour Force Survey data from 29 European countries and compare the results with the official employment and unemployment statistics published by Eurostat.