Employment Minister Chris Grayling said that at any one time up to 40,000 young people were on a training scheme under Labour so did not show up on claimant count figures, even though they were still unemployed.
Around 1.3 million people were on a training allowance scheme under Labour so they 'disappeared' from the jobless register, added Mr Grayling.
Under the coalition’s work programme, no one disappears from the system because they continue to receive jobseeker’s allowance, said the minister, adding: 'What you see is what you get. That was not the case under the New Deal (Labour’s employment programme).'
Mr Grayling said that because people no longer automatically leave jobseeker’s allowance when they start a work programme, the number of long-term claimants, especially young people, had 'inevitably' risen.
'We’re giving a true picture rather than an artificial one.'
A Department for Work and Pensions spokesman said: 'This Government is doing everything it can at every level to help young people into meaningful and sustainable work.
'It is working with business small and large to develop the help and programmes that we believe will help young people across the country.
'We have created the £1 billion Youth Contract that will give young people the chance to get into new jobs or training.
'It will create 250,000 work experience places and 160,000 wage incentives worth £2,275, making it easier for businesses to take that chance on employing young people.
'The Youth Contract also provides 20,000 incentive payments for small businesses to take on their first apprentice.