Economic's 2

considered not to be in labor force if you are...

discouraged worker retiree full-time student decide to not enter labor force (stay at home mom and dad)

Current Population Survey

divide the working-age population into two groups: in labor force and not in labor force

Full Employment

economy is at the natural rate of unemployment

Natural Rate of Unemployment

given by frictional, seasonal and structural unemployment rates of unemployment

The unemployment rate does not tell us what?

how long people have been unemployed

Structural Unemployment

is the unemployment that results because of changes in technology or changes in the location of jobs. E: Master Brick Layer, some thing that comes around that renders your skill in brick laying or working in shoe factory in America, company moves to new place and the job skills are not looked at much anymore in the new country

Seasonal Unemployment

is the unemployment that results due to seasonal shifts in labor demand and labor supply. E: christmas comes and goes which causes more purchases so you hire more workers but when christmas goes you let some of the workers go

Labor Force and formula

made up of individuals 16 years and older who are either working or actively looking for work. sum of employed and the unemployed LF= E+UE

Employment to Working Age Population Ratio

measures the amount of people working age who have jobs and thus serve as an indicator of job availability and degree of match between jobs and people's skill # of people employed divided by WAP multiplied by 100

Discourage Worker

one who is willing and able to work but has not made specific efforts to find job in last 4 weeks due to past job hunt failures

Labor Force Participation Rate and formula

percentage of WAP in labor force, provides measure of willingness of WAP to work LF divided by WAP multiplied by 100

unemployment

refers to an outcome in which there are people without work, but who would love to be working, and are thus actively seeking work.

unemployment rate

refers to the percentage of the labor force that is unemployed

Frictional Unemployment

refers to the unemployment that results from the time that it takes to match workers with jobs. takes time for workers to match job skills to job that suites job skills

Cyclical Unemployment

refers to the year-to-year fluctuations in unemployment around its natural rate. increase during recession, fall during expansion unemployment that comes about during the downside of the business cycle

Rise in Unemployment Rate

reflects both a larger number of unemployed and a longer average duration of unemployment

Labor Force Formula

# of people employed + # of people unemployed

Unemployment Rate Formula

# of people unemployed divided by labor force multiplied by 100

Natural Rate of Unemployment is?

5.5%

Entrants or Reentrants

Enter or reenter the labor force to search for a job

Types of Unemployment

Frictional Unemployment Structural Unemployment Seasonal Unemployment Cyclical Unemployment

People end a spell of unemployment if...

Hired or Recalled Withdraw from labor force

People become unemployed if...

Job Losers Job Leavers Entrants or Reentrants

Job Leavers

Leave their jobs and search for another one

Job Losers

Lose their jobs and search for another one - account for about ½ of all unemployment

What does the average duration of unemployment do?

Rises during recession Fall soon after recovery begins

Considered unemployed if...

You are without work but had made specific efforts to find a job within the previous four weeks You are waiting to be called back to a job from which you have been laid off Waiting to start a job within 30 days.

Working-age population and formula

total number of individuals who are 16 years of age and older, who are not any form of institutionalized care and who are not active military duty LF + No LF

Why do we care about unemployment?

unemployment in general is a measure of the health of the economy Economic Hardship: he/she loses income and thus their spending ability psychological problems associated with being unemployed (loss of self-esteem and anxiety bout future)

Considered to be employed if...

work for pay either for someone else or in own business for one or more hours per week work without pay for 15 or more hours per week in family enterprise job that you are temporarily absent with without pay b/c illness, vacation or bad weather full-time and part-time workers are included(doesnt matter)