UvA-DARE (Digital Academic Repository) The construction of instruments for measuring unemployment Rodenburg, P. Publication date 2006 Document Version Final published version Link to publication Citation for published version (APA): Rodenburg, P. (2006). The construction of instruments for measuring unemployment. Thela Thesis. General rights It is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an open content license (like Creative Commons). Disclaimer/Complaints regulations If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library: https://uba.uva.nl/en/contact, or a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible. UvA-DARE is a service provided by the library of the University of Amsterdam (https://dare.uva.nl) Download date:25 Sep 2021 The Construction of Instruments for Measuring Unemployment ISBN 90 5170 768 1 Cover design: Crasborn Graphic Designers bno, Valkenburg a.d. Geul This book is no. 383 of the Tinbergen Institute Research Series, established through cooperation between Thela Thesis and the Tinbergen Institute. A list of books which already appeared in the series can be found in the back. The Construction of Instruments for Measuring Unemployment ACADEMISCH PROEFSCHRIFT ter verkrijging van de graad van doctor aan de Universiteit van Amsterdam op gezag van de Rector Magnificus prof. mr. P.F. van der Heijden ten overstaan van een door het college voor promoties ingestelde commissie, in het openbaar te verdedigen in de Aula der Universiteit op woensdag 5 juli 2006 te 12.00 uur door Peter Rodenburg geboren te Voorschoten Promotiecommissie: Promotor: Prof. dr. M.S. Morgan Co-promotor: Dr. ir. M.J. Boumans overige leden: Prof. dr. R.E. Backhouse Prof. dr. F.A.G. den Butter Prof. dr. J.B. Davis Prof. dr. M. Heidelberger Prof. dr. J. Visser Faculteit der Economische Wetenschappen en Econometrie Table of Contents 1 Introduction 1.1 Prologue . 1 1.2 The scope of the thesis . 2 1.3 The research problem . 6 1.4 Outline of the thesis . 13 Appendix 1.A: Origin of the Representational Theory of Measurement. 18 Appendix 1.B: Classification of measurement. 19 2 Standardized Quantitative Rules for the Direct Measurement of Dutch Unemployment, 1900-1940 2.1 Introduction . 22 2.2 The SQR of Trade Union data . 24 2.2.1 The idea of an SQR. 24 2.2.2 Development of the TU SQR . 24 2.3 Measurement problems of TU SQR. 34 2.4 The SQR of Labour Exchange data . 41 2.5 The measurement problems of LEx SQR. 46 2.6 Conclusions. 49 Appendix 2.A: Accuracy vs. Precision. 54 Appendix 2.B: Employment assistance 1900-1940 . 56 3 Heidelberger's Correlation Rule and the Measurement of Cyclical Unemployment 3.1 Introduction . 59 3.2 Associative measurement and Heidelberger's correlation rule 60 3.3 The development of UV-analysis. 62 3.3.1 Dow and Dicks-Mireaux: the measurement of excess demand. 62 3.3.2 Solow and the measurement of structural unemployment in the USA . 69 3.3.3 NIESR: measurement according to the traditional classification . 70 3.4 The correlational structure of UV-analysis. 72 3.5 The abandonment of UV-analysis. 76 3.5.1 The identification problem of UV-analysis. 77 3.6 Conclusions . 80 3.7 Epilogue: The place of the UV curve in economic theory . 82 i 4 Two Approaches for Derived Measurement of the NAIRU 4.1 Introduction. 91 4.2 The Phillips curve and the concepts of the NAIRU and the Natural Rate of Unemployment . 93 4.2.1 The Phillips curve . 93 4.2.2 The Natural Rate of Unemployment and the NAIRU . 95 4.3 Measurement of the NAIRU: The structural approach . 98 4.4 The Phillips curve as an invariant regularity for measurement?. 101 4.5 The statistical approach: Vector Auto Regression models . 109 4.6 The Representational Theory of Measurement and the statistical approach: . 112 4.7 Conclusions . 114 Appendix 4.A: VAR models: A formal treatment. 117 5 Models as Measuring Instruments: Measurement of Duration Dependence of Unemployment 5.1 Introduction . 120 5.2 Models as measuring instruments?. 121 5.3 The phenomenon of duration dependence and its causes. 127 5.4 The framework for measurement of duration dependency. 129 5.5 Lancaster's 1979 duration model. 134 5.6 Lancaster’s duration model as a measuring device. 138 5.6.1 The internal principles of the model. 138 5.6.2 The Weibull function as a bridge principle. 140 5.6.3 Calibrating the model . .. 141 5.7 Conclusions . 143 6 Conclusions 6.1 The research question reconsidered. 146 6.2 The measuring instruments of unemployment. 152 6.3 Accuracy, concept formation and measurability . 156 6.4 The role of measuring instruments. 161 References 164 Summary in Dutch 178 ii Preface The cliché goes that writing a dissertation is a matter of hard labour that can easily give rise to mental breakdowns. I have to say, now this thesis is finally finished, that I have to agree. Yes, this thesis is the result of many years of hard labour, sometimes on the verge of a breakdown. However, I feel it is important to stress here that I experienced this period as a very joyful one. Two important factors accounted for this. First, I experienced the writing of this thesis as an intellectual voyage of discovery. It was great to see the slow progress in the process of writing. The second reason why my PhD-ship became such a pleasant period was because of the wonderful people who I came to meet and who contributed each in their own way to its completion. Without their help and support it may even not have been finished at all. The foremost persons I am very grateful to are my supervisors. In the first place I would like to thank Mary Morgan for accepting me as her PhD student and for letting me work with her. Though the working relation was sometimes complicated due to the geographical separation (Mary gave up her position at the University of Amsterdam and returned to London, about half a year after I started my PhD), I never felt lost and always felt very privileged to work with her. From Mary I learned to look at the bigger picture and not to worry when a case study didn’t seem to fit into my thesis outline. I appreciate the enormous degree of freedom she gave me to pursue my research. In retrospect, I can honestly say that I would not have wanted it in any another way. I am also greatly indebted to Marcel Boumans, my co-supervisor. He streamlined my thought and forced me to think in terms of measurement. In addition, he went through numerous (and undoubtedly boring) earlier versions. I am grateful for the profound comments he made. Without Marcel this work would have been very different. To this sequence I definitely have to add Harro Maas. Not only was he formally my co- supervisor for the period of one year (in 2004, when Marcel Boumans was based at the Netherlands Institute for Advanced Study in the Humanities and Social Sciences in Wassenaar), in practice, he served throughout my whole PhD as my third PhD supervisor. He was always sincerely interested in my research and progress, keen on keeping me to my deadlines, and provided me with helpful advice on many occasions. iii I felt very lucky to work with these three supervisors and my gratitude to them goes beyond words. Their contributions to this thesis are immeasurable. Other members of the Research Group in the History and Methodology of Economics are (or were) Geert Reuten, Mark Blaug, John Davis, Hsiang-Ke Chao, Robert Went, Edith Kuiper, Floris Heukelom, Carla van El, Adrienne van den Bogaard, Eric Schliessler, Maarten Biermans, and Dirk Damsma. They all contributed in some way to this thesis and make me look back to my PhD period with great pleasure. I enjoyed the discussions, the open intellectual climate of the research group and the great literature we read and discussed. Geert Reuten, who inspired me in my undergraduate days, and Hsiang-Ke Chao, with whom I have worked for many years on the same topic and whom never stopped encouraging me, deserve special mentioning. While it is impossible for me, for reasons of space, to mention all staff of the Department of Economics separately here, I would like to thank in particular Robert Helmink and Wilma de Kruijf of the secretariat for their help and support, and Frank Klaassen and Dirk Veestraeten for their company and interesting and entertaining discussions during supper in the university restaurant. A special thanks goes out to my colleagues and students at the Department of European Studies of the University of Amsterdam. The Department provides a friendly academic climate and enabled me to finish the last bits of my thesis. In particular, I like to thank Michael Wintle for his support and comments on an early version of Chapter 2, and Lia Versteegh and Robbert Büthker for their encouragement and co-operation in teaching. Others who need to be thanked are Aico van Vuuren, for his helpful comments and suggestions on Chapter 5 on search models of unemployment, and Massimo Giuliodori, for his comments and discussions on VAR models in Chapter 4.