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Why unemployment can hide labour-market change

Unemployment is a stock, a snapshot, while flows track movement over time. Its level can stay flat as entries and exits rise, masking labour-market change. In Italy, employment fell by 14,000 quarter on quarter in 2016 but rose by 239,000 year on year. Moves from unemployment into work increased, while moves from inactivity rose only modestly. In 2017, fixed-term jobs drove much employment growth; conversion to permanent work fell from 24.3% to 16.5%. India panel evidence could not be verified.

The following diagrams compare the proportion of people moving between employment, unemployment and not in the labour force between May and June.

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