Defining Unemployment

Frictional Unemployment

unemployment due to the time workers spend in job search Even if the number of job vacancies equals the number of job seekers, and those job seekers are fully qualified for the jobs available, there will still be some unemployment.

Normative Economics

prescriptions about the way the economy should work

Assume the unemployment rate in the U.S. is 6%. That means approximately 94% of healthy adult Americans have jobs:

False

In your country, there are 24 million people in the labor force. 21.5 million people are employed. What is the unemployment rate in your country?

10.4%

Calculate the unemployment rate in US in Aug 2015. Civilian non-institutional population: 251,096 Employed: 149,043 Unemployed: 8,018 Not in the labor force: 94,035

5.1%

To be considered unemployed, a person must?

Not be working, actively seeking a job, and available for work

Discouraged Workers

nonworking people who have given up looking for work bc they don't believe there are any jobs for them. Not considered unemployed.

Marginally Attached Workers

are available and have looked for a job recently but are not currently looking (they have looked in the past 12 months but not in the past 4 weeks) due to reasons such as family responsibilities or transportation problems.

Positive Economics

branch of economic analysis that describes the way the economy actually works

Last week Stephanie quit her job as a copywriter at an advertising agency. She spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is best classified as:

frictionally unemployed

Labor Force

labor force= employed + unemployed the labor force consists of the adult (16+) civilian non-institutionalized population, working or looking for work (and available for work).

Which of the following individuals can be counted as unemployed? Darren, a 10-year-old child Nazma, a stay-at-home mom Moesha, a full-time college student Carl, who works part time at the Olive Garden but prefer more hours

none of the answers are correct

Employment

number of currently employed in the economy, either full time or part time

Unemployment

number of people actively looking for work, are available for work, but are not currently employed

Underemployment

number of people who work part time bc they cannot find full-time jobs

Frictional Unemployment

occurs bc it takes time to match up those workers with the appropriate jobs due to imperfect information in the period of low unemployment rate, most unemployment is frictional

Adult (16+) noninstitutionalized civilian population

persons 16 years of age and older residing in the 50 states and the District of Columbia, who are not inmates of institutions (e.g., penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces

Unemployment always ___ during recessions and usually ___ during periods of economic expansion

rises; falls (but not always)

Workers are ____ for labor. Employers are ___ for labor.

suppliers; demanders

The labor force participation rate

the percentage of the population aged 16 or older that is in the labor force. Labor force participation rate = Labor Force/Population age 16 and older x 100

The unemployment rate

the percentage of the total number of people in the labor force who are unemployed. Unemployment rate = Number of Unemployed Workers/Labor Force x 100

Structural Unemployment

unemployment that results when there are more people seeking jobs (quantity supplied) in a labor market than there are jobs available (quantity demanded) at the current wage