The iceberg decomposition: a parsimonious way to map the health of labour markets
Open accessAbstract
This article introduces the metaphor of the iceberg in the labour market. While policy in most OECD countries has historically focussed on reducing unemployment (the tip of the iceberg), the group of inactive people (below the waterline) is much larger. Therefore, we point to the clear limitations of the unemployment rate as the (single) key macro-economic indicator of the health of the labour market. A parsimonious dashboard approach utilising the unemployment-to-population ratio and the inactivity-to-population ratio as two highly appropriate and complementary measures is defended. We show that the ratio of these two indices varies greatly between countries, which calls for different policies for different countries.
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This underutilisation of talent could result in needless economic costs for firms and society.
“This underutilisation of talent could result in needless economic costs for firms and society (Baert, 2021;OECD, 2020a;Pager, 2016).”
From The state of hiring discrimination: A meta-analysis of (almost) all recent correspondence experiments (2023) · cites this paper as Baert, 2021
The paper’s Abstract (page unavailable) links labour underutilisation to a societal economic concern: when more working-age people are inactive, fewer workers support non-working people, making social-security financing a greater problem. It does not address economic costs to firms or specifically describe the underutilised resources as talent. (LLM, conf=0.83)
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Lippens, L., Vermeiren, S., & Baert, S. (2023) · European Economic Review · doi:10.1016/j.euroecorev.2022.104315
Self-citation
- Authors
- Baert, S.
- Affiliations
- Ghent University (BE)
- Corresponding author
- Baert, Stijn
- ORCID
- Baert, Stijn
- Venue
- Economic Analysis and Policy
- Publisher
- Elsevier BV
- Published
- 2021-03
- Volume
- 69
- Pages
- 350-365
- ISSN
- 0313-5926 (ISSN-L)
- OpenAlex
- W3126049205
- Cited by
- 14
- References
- 0
- Citations by year
- 2026: 2 · 2025: 1 · 2024: 1 · 2023: 4 · 2022: 3 · 2021: 3
- FWCI
- 2.00
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- Economic Analysis and Policy (publishedVersion, cc-by-nc-nd)
- SSRN Electronic Journal (publishedVersion)
- Ghent University Academic Bibliography (Ghent University) (submittedVersion, cc-by-nc-nd)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Unemployment and Economic Growth
- Social Sciences › Safety Research › Employment, Labor, and Gender Studies
- Keywords
- iceberg metaphor, unemployment rate, labour market indicators, labour market policy, inactive workers, cross-national comparison
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