Measuring the Total Number of US Job Seekers

Abstract

I document a substantial rise in the proportion of job seekers who are classified as out of the labour force in the United States since 1980. I propose an adjusted unemployment rate to account for these searchers; the adjustment increases the unemployment rate by 5.2 percentage points, rids the unemployment rate of its downward trend and decreases volatility by 50%. I also construct a measure of total search effort in the economy, including employed job seekers. Finally, estimates of the Phillips curve using the adjusted unemployment rate or total searcher rate show no sign of a flattening output-inflation relationship in the post-2008 recession period.