Official unemployment rate is an imperfect measure of the rate of unemployment (joblessness). Give examples on how the definition of unemployment rate overstates or understates the number of jobless people in the economy.
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The unemployment rate may be understated due to discouraged and part time workers. The rate cannot measure intent of workers. Discouraged workers might "want" to work, but they have demonstrated no effort to obtain employment, so they are placed in the "not in labour force" category. Part-time workers might "want" to work full time, but they are in fact working, and are thus placed completely in the "employed persons" category
The unemployment rate may be overstated due to unreported legal employment and unreported illegal employment.
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