Full-time-equivalent measures show that the UK labour market used fewer hours, and contained more unused labour, than conventional person-based rates suggest. For 2016–18, the FTE employment rate (FTEER) was 63.6%, compared with a conventional employment rate of 74.6%; the FTE unemployment rate (FTEUR) was 9.1%, compared with conventional unemployment of 4.6%.[1] The central implication is not that conventional indicators are wrong, but that they answer a different question: conventional rates count people, while FTE rates quantify hours actually worked and additional hours wanted.[2]
The full-time-equivalent employment rate is defined as total hours worked per week divided by 37.5 multiplied by the working-age population. The 37.5-hour benchmark represents assumed normal full-time weekly hours in the UK, converting total hours into a full-time-equivalent number that can be expressed as a percentage of the working-age population.[3][4]
FTEER gives greater weight to the amount of work performed than to the mere presence of an employment relationship. It includes all hours actually worked, including hours worked by people who would prefer to work fewer hours.[5] Because a person working one hour counts as employed under the conventional measure, but contributes only a small number of hours to FTEER, FTEER cannot exceed the conventional employment rate.[6][7]
The full-time-equivalent unemployment rate is the total additional hours wanted by unemployed and underemployed people divided by total potential hours. Total potential hours are defined as hours currently worked plus additional hours wanted.[8] This combines people without work who are seeking employment with employed people who are actively seeking more hours, thereby measuring the volume of labour underutilisation rather than simply the number of unemployed people.[9]
FTEUR does not subtract overemployment. The article treats hours already being worked as part of current labour supply and notes that overemployed people are not measured as seeking fewer hours in a directly comparable way.[10] Unlike FTEER, FTEUR does not require a normal full-time-hours benchmark, but it does require an estimate of the hours unemployed people would like to work.[11] Since it includes wanted hours among both unemployed and underemployed people, FTEUR cannot be lower than the conventional unemployment rate.[12][13]
| Indicator | What it counts | What it reveals about slack |
|---|---|---|
| Conventional employment rate | People of working age who are employed. Under the ILO definition used in the article, working for just one hour in the reference week is sufficient to count as employed.[14] | Shows the prevalence of employment, but gives equal status to very different amounts of work. |
| FTEER | Total hours actually worked, scaled by 37.5 hours and the working-age population.[15][16] | Shows how much full-time-equivalent labour is actually being used, making part-time work and short hours visible. |
| Conventional unemployment rate | Unemployed people as a proportion of the workforce. It excludes employed people who are seeking additional hours.[17] | Shows joblessness among the active workforce, but excludes underemployment. |
| FTEUR | Wanted additional hours among unemployed and underemployed people as a share of worked plus wanted hours.[18] | Shows the wider volume of unused labour among the active workforce. It excludes economically inactive people who want a job, because the measure is designed to remain comparable with active-workforce employment and unemployment definitions.[19] |
The UK comparison illustrates the scale of the adjustment. A conventional employment rate of 74.6% becomes an FTEER of 63.6%, an 11-percentage-point reduction. Conventional unemployment of 4.6% becomes FTEUR of 9.1%, approximately twice as high.[20] Part-time work and underemployment therefore make conventional indicators look stronger than the underlying volume of labour utilisation warrants.
The article finds that FTE measures particularly alter the picture for women, younger workers and people with low or no qualifications. They also change regional rankings and reveal local economic relationships that are weak or absent when conventional rates are used.[21]
| Dimension | Finding from conventional rates | What the FTE measures add or change |
|---|---|---|
| Gender | Women’s conventional employment rate is just under 70%.[22] Conventional unemployment produces the opposite gender pattern from FTE unemployment.[23] | Women’s FTEER is just under 51%, nearly 19 percentage points below their conventional employment rate.[24] Women have greater unemployment than men on the FTE measure, and women’s FTEER is lowest in predominantly rural areas, unlike their conventional employment rate, which is lowest in predominantly urban areas.[25][26] |
| Age | Workers aged 18–24 have conventional unemployment of just under 11%.[27] | Youth FTEUR is nearly 20%, almost twice the conventional rate.[28] Scotland has the largest youth employment-rate shortfall, while the region with the highest youth unemployment changes from London on the conventional measure to Wales on the FTE measure, where FTE youth unemployment is 22.4%.[29][30] |
| Qualification | People with no qualifications have conventional unemployment of just over 9%.[31] | Their FTEUR is almost 15%, around six percentage points higher, while their FTEER is only 37%.[32][33] The East Midlands shifts from above to below the UK average for low-skilled employment when FTEER is used; London and the East Midlands also shift from below to above average for low-skilled FTE unemployment.[34][35] |
| Regions | Conventional rankings identify the North East as having the highest unemployment rate.[36] | The largest all-worker employment gaps are in Scotland, the South West and Wales. London has the smallest employment gap and is the only region to move from below to above the UK average on FTEER, reflecting more full-time jobs and longer hours. The highest unemployment changes to London on the FTE measure.[37][38] |
| Local economies | Conventional employment is not correlated with workplace hourly pay or jobs density.[39] | FTEER is correlated with median and lower-quartile hourly pay and with jobs density, while neither conventional nor FTE unemployment is correlated with those variables.[40][41] Across 179 NUTS3 areas, FTE and conventional rates are generally less closely aligned for women, young people and low-skilled workers, indicating different local spatial patterns.[42] |
These limitations mean that FTE rates should be read as informative complements rather than mechanically superior replacements. Their value is greatest when the question concerns the amount of labour being used or available, especially where part-time work, short hours and underemployment are unevenly distributed across groups and places.[50][51]
FTEER lowers the apparent strength of UK employment by translating jobs into hours, while FTEUR raises apparent unemployment by adding the unused hours sought by underemployed workers. The resulting picture is of substantially more labour-market slack than conventional rates show, with especially large differences for women, young people, low-qualified workers and several peripheral regions.[52][53]
Conventional rates remain useful for tracking how many people have jobs or are unemployed. FTE rates answer the complementary policy question: how much labour is actually being deployed, and how many additional hours could the active workforce supply? The measures should therefore be reported together, with explicit sensitivity analysis around the full-time-hours benchmark, desired-hours imputation and survey uncertainty.
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