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| | | | Unemployment Insurance Recipients and the Number of Unemployed: Why the Numbers are Different (Continued) | | | | Jason Palmer & Jim Rhein | | | | Conclusion Each month the government conducts a survey to produce information about the levels of labor force, employment, and unemployment in the economy. The results of this survey are used to calculate the unemployment rate. Simultaneously but separately, state unemployment agencies track information about individuals filing for and receiving unemployment insurance benefits. Both of these sources of information are very important variables in understanding and measuring labor market activity. Commonly, however, people assume the unemployment rate simply reflects the number of individuals who are receiving U.I. benefits. This is not true and, in fact, the number of unemployed is actually much larger than the number of individuals receiving unemployment insurance. As was demonstrated, less than half of all unemployed individuals in Michigan collected unemployment insurance in 2006. As a result, if unemployment insurance recipients were used instead of the actual number of unemployed to calculate the jobless rate, the rate in Michigan in 2006 would have been considerably lower. |
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