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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Measuring Labor Utilization: The Non-Employment Index
Marianna Kudlyak

The elevated number of non-employed people who are out of the labor force has raised some concerns about how well the headline unemployment rate measures available labor. An alternative measure of labor utilization, the Non-Employment Index, accounts for all non-employed individuals, distinguishing between groups like short-term versus long-term unemployed, discouraged workers, retirees, and disabled individuals, and adjusting for how likely each is to transition to employment. Current data show the index is very close to its value in 2005–06, the period near the peak of the previous economic expansion.

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Marianna Kudlyak, "Measuring Labor Utilization: The Non-Employment Index" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 08, 2017.
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