Unemployment
_____ shifts displace some workers, who must search for new _____ appropriate for their skills & tastes
sectoral, jobs
If minimum-wage laws, unions, efficiency wages, and all other factors that could prevent wages from reaching equilibrium were eliminated, then there would be no ________
structural unemployment.
labor force
total # of workers, including 0 the employed and unemployed
Benefits of UI is Gives the unemployed more time to search, resulting in better job matches and thus higher productivity
T
Frictional unemployment results from the process of matching workers and jobs.
T
Structural unemployment results when the number of jobs is insufficient for the number of workers.
T
Unemployment rate
100 x # of unemployed labor force / labor force
Labor force participation rate
100 x labor force/adult population
Unemployed: people not working who have looked for work during previous _________ weeks
4
BLS divides population into 3 groups
Employed: paid employees, self-employed, and unpaid workers in a family business Unemployed Not in the labor force: everyone else
Unemployment insurance decreases frictional unemployment
F
The economy is always changing, so some ______ unemployment is inevitable
Frictional
Firms voluntarily pay above-equilibrium wages to boost worker productivity
The theory of efficiency wages
Sectoral shifts are changes in the composition of ______ across industries or regions of the country
demand
Structural unemployment occurs when not ____________ to go around because wage is above ____
enough jobs, eq'm
Two types of unemployment
frictional and structural
Three reasons for above-equilibrium wages include
minimum wage laws, unions, and efficiency wages
Structural
occurs when there are fewer jobs than workers usually longer-term
Frictional
occurs when workers spend time searching for the jobs that best suit their skills and tastes, short-term for most workers(optimal)
Cyclical unemployment
the deviation of unemployment from its natural rate
Natural rate of unemployment
the normal rate of unemployment around which the actual unemployment rate fluctuates
