Search Models of Unemployment∗

To the average person (perhaps even the average economist), unemployment is often equated to a state of involuntary idleness. Such a view, however, appears inconsistent with the way in which unemployment is actually defined and measured. According to International Labor Organization conventions (which are followed by most national labor force surveys), unemployment constitutes those (working-age) individuals who are not employed but who are actively searching for work (over the reference period of the survey— e.g., the previous four weeks). Nonemployed (jobless) individuals not engaged in active job-search (including so-called ‘discouraged workers’) are classified as nonparticipants.