quiz for labor

Employment rate is better in some ways that

-Unemployment rate = divided by labor force -So unemployment ignores the ppl out of the labor force, full time students, kids , retirees, women with young kids, housewives. Even if looking for jobs they are not in labor force -Are hidden unemployment, they tried but did not work so they left -So oof and that group is kinda wrongfully ignored in these calculations

Disadvantages of employment rate

-Well its good bc deals with out of labor force OOLF, hidden employment -Its bad because, policy shocks can change it quick. If there are some shocks that are uncorrelated with labor market such as changes in education policy (free college) would make ppl go to school and then would be a full time student or changes in fertility, migration and then this would be a bad look

Compared with unemployment rate, employment rate is often believed to be a better measure of the labor market. Please explain why it is better. On the other hand, employment rate also has its limitation. Please explain its limitation.

Quick Answer: Compared with unemployment rate, employment rate is better because it concerns the hidden unemployment in the out of labor force group. It has limitation because some policy shocks unrelated to unemployment or labor market situation such changes in fertility and school enrollment rates, will affect the number of the employment rate as well.

Please use your economics theory knowledge to explain why there was a huge increase in the labor supply in Alaska from 1976 to 1977?

Quick Answer: because of the upward- sloping supply curve, which means people are attracted by higher wage. After oil discovery, huge demand for labor in Alaska combined with the upward sloping supply curve leads to an increase in wages. On one hand, more local people choose to work when they are given higher wages; on the other hand, people living in other states migrate to Alaska for better payments in the labor market.

pease explain why US has a general higher labor force participation rate than European countries.

Social benefits system in US is different from European countries. US's social security, pension, health insurance and other benefits are highly correlated with the employment. Thus, US has a higher labor force participation rate because of the benefits highly associated with jobs

linear budget contain implies that

wage is same for every hour worked

the added worker is

counter cyclical

added worker is

countercyclical

the back bending labor supply curve comes about if

income effect dominates sub effect at high wage levels

individual indifference curve map consisted of a series of horizontal lines,, with slopes of zero, what does this mean about his preferences

measure does not increase utility

back bending supply curve has

positive slope at low wage levels and neg at high wage

example of hidden employment

ppl that have given up

normative

should or an opinion

An upward-sloping labor supply curve implies that A. a firm can always hire more workers, even without increasing the wage. B. more workers are willing to work when wages are low. C. more workers are willing to work as the market wage increases. D. there is a continuously increasing demand for labor.

C

cycle framework

workers choose to work more hours during high-wage periods and to work few hours during low-wage periods

steep curve means what in terms of leisure time

you would have to get a good bribe to give up an additional amount of leisure