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The measurement of labour market slack: An empirical analysis for Portugal
This paper presents a perspective on the measurement of labour market slack in Portugal based on the degree of attachment of several groups of non-employed individuals. We discuss the adequacy of the conventional criteria used for the measurement of unemployment. Following the relevant strand of literature on this topic, we apply a classification of labour market status based on the transition behaviour of non-employed individuals. We conclude that some subgroups in inactivity display a transition behaviour into employment which is closer to the unemployed. This suggests that the classification of some individuals as inactive might not be adequate, since they show considerable attachment to the labour market and we reject the equivalence relative to their inactive counterparts.