Problems in measuring unemployment rate.
Why is it not necessarily an accurate depiction of unemployment in the economy?
1. It is difficult to distinguish between a person who is unemployed and a person who is not in the labor force (not actively seeking job?).
2. Not all unemployment ends with the job seeker finding a job. Almost half of all spells of unemployment end when the unemployed person leaves the labor force.
3. Some people call themselves unemployed to qualify for government aid, or they are working but paid "under the table" (tax evasion).
4. Discouraged workers: Individuals who have given up finding jobs after unsuccessful search.
--------- Mankiw
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