CH.10 - Unemployment -

What are the 3 groups that BLS divide the civilian non-institutional population?

1.) Employed 2.) Unemployed 3.) Not in the labor force

What are 3 reasons why u-rate is not a perfect indicator of joblessness or the health of the job market?

1.) Excludes discouraged workers 2.) Doesn't distinguish between full-time & part-time work, or people working part time because of unavailability of full-time jobs 3.) Some people misreport their work status

What are 2 things that cause frictional unemployment?

1.) Job Search 2.) Sectoral shift

What are 2 things that the BLS base labor force statistics on?

1.) Monthly surveys of 60,000 households 2.) "Adult population" (16 or older)

What are 2 things that cause structural unemployment?

1.) Weight rigidity above equilibrium wage 2.) Surplus in workers

What is the fraction of unemployed, employed in under 5 weeks?

1/3

Calculate unemployed rate ("u-rate")

100% X (# of unemployed) / (labor force)

Calculate labor-force participation rate

100% X (labor force) / (adult population)

What is the fraction of unemployed, employed in under 14 weeks?

2/3

What is the % of unemployed have been unemployed for over 6 months?

20%

Define cyclincal unemployment

Deviation of unemployment from its natural rate, associated with business cycles, and can be positive or negative depending on the natural rate

Define Structural Unemployment

Long-term; Occurs when there are few jobs than workers

Define natural rate of unemployment

Natural rate of unemployment around which the actual unemployment rate fluctuates

Which race, gender group has the lowest labor force participation rate for adults (20 yrs and older)?

White, Female

Which group of adults have the lowesr labor force participation rate based on education level?

< High School Diploma

Which group of adults have the highest u-rate based on education level?

< High school diploma

Define unemployed.

A person who is currently not employed but is actively looking for work (during the last 4 weeks)

Define employed.

A person working at least 1 hour per week for pay or at least 15 hours per week as an unpaid worker in a family business

Which group of adults have the highest labor force participation rate based on education level?

Bachelors or More

Which group of adults have the lowest u-rate based on education level?

Bachelors or More

Which race teen group has the highest u-rate?

Black

Which race, gender group has the highest u-rate for adults (20 yrs and older)?

Black, Female

Which race teen group has the lowest labor force participation rate?

Blacks

Who produces labor force statistics?

Bureau of Labor Statistics (BLS)

Define labor force.

Employed plus unemployed

Define not in the labor force.

Everyone else (disabilities, homeless, retirees, high school/college students, workers under 16, stay-at-home parents)

What are 2 types of natural rate unemployment?

Frictional and Structural

Which race, gender group has the highest labor force participation rate for adults (20 yrs and older)?

Hispanic, Male

Define civilian non-institutional population.

Population that does not include inmates or prisons and who are not active duty in armed forces

Define Frictional Unemployment

Short-term; Occurs when workers spend time searching for the jobs that best suit their skills and tastes

Which race, gender group has the lowest u-rate for adults (20 yrs and older)?

White, Female

Which race teen group has the highest labor force participation rate?

White

Which race teen group has the lowest u-rate?

White