Population-at-risk (PAR) rates for unemployment duration groups

The measurement of long term unemployment as a percentage of current unemployment (LAPU) can mislead. At turning points changes in short-term unemployment have more influence on LAPU than long-term unemployment. Population-at-risk (PAR) rates provide a precise way of measuring unemployment, and exits from unemployment, for groups of any duration. PAR rates for the UK confirm that the longer the duration of unemployment the lower the exit rate. But PAR exit rates show that long-term unemployment is more sensitive to changes in labour market conditions than short-term.-apparently contradicting the 'withered flowers ' theory of unemployment. PAR rates for most duration groups anticipate changes in total unemployment so providing advance indicators of economic turning points. Keywords/phrases: population at risk, trade cycle, short-term unemployment, long-term unemployment, exit rates, seasonal variation. 1