Does the ILO Definition Capture All Unemployment? ∗

The labour market status of many non-working persons is at the boundary between un-employment and inactivity. As the unemployed, they seek and are available for work; unlike them, their last search action was not enough close to meet the ILO definition of unemploy-ment. In this paper we examine by non-parametric tests how the transition probabilities of these out-of-the-labour-force job seekers differ from those of the unemployed as well as the other non-participants. First, using data from the European Community Household Panel, we show that in most EU countries these job seekers constitute a distinct labour market state. Second, we rely on information only available in the Italian Labour Force Survey to derive a measure of search intensity which we use to break down the out-of-the-labour-force job seekers. On the basis of their transition probabilities, the most actively searching among them are indistinguishable from the unemployed