Formal Employment

Economists sometimes talk about “formal employment.” I’ve used the phrase to mean a regular job with an employment contract. These sorts of jobs are associated with a host of “good” things such as stability, worker’s rights, and higher levels of skills (although that might be endogenous). It seems that Gallup has recently come up with a new measure to track how much of the population is in the regularly employed which is a first step toward formal employment. Gallup explains:

his new measure estimates the percentage of the entire 15 and older population — not just those currently in the workforce — who are employed full time for an employer for at least 30 hours per week.

The WSJ describes how this may work as a better measure of global unemployment:

n unveiling the new metric, Gallup chairman Jim Clifton described the effort as a way to count the number of “good jobs” around the world. “In what is perhaps the world’s most pressing problem today, of the 5 billion people age 15 or older, 3 billion want a good job, but there are only 1.2 billion of them to go around,” he wrote. Existing data “lump the lousy jobs together with the good ones. … Do you think Guatemala’s unemployment rate is really 4%? Or that Iran’s is 15%? Our data suggest the real unemployment rates are much, much higher.”

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