econ final ch 15

Not in Labor Force

This category includes those who fit neither of the first two categories, such as full-time students, homemakers, and retirees.

Unemployed

This category includes those who were not employed, were available for work, and had tried to find employment during the previous four weeks. It also includes those waiting to be recalled to a job from which they had been laid off.

Employed

This category includes those who worked as paid employees, worked in their own business, or worked as unpaid workers in a family member's business. Both full-time and part-time workers are counted. This category also includes those who were not working but who had jobs from which they were temporarily absent because of, for example, vacation, illness, or bad weather.

What are "sectorial shifts"?

are changes in the composition of demand across industries or regions of the country. Such shifts displace some workers, who must search for new jobs appropriate for their skills & tastes.

What can affect "frictional unemployment"?

name brands (dell to apple)

What is "cyclical unemployment"?

the deviation of unemployment from its natural rate

What is the "natural rate of unemployment"?

the normal rate of unemployment around which the actual unemployment rate fluctuates

calculate labor force participation ratio

100 x labor force/adult participation rate

calculate adult population

Labor force + not in the labor force

How is unemployment affected by minimum wage laws?

Minimum-wage laws matter most for the least skilled and least experienced members of the labor force, such as teenagers. Their equilibrium wages tend to be low and, therefore, are more likely to fall below the legal minimum.

calculate amount of people in labor force

Number of employed+number of unemployed

Which agency is responsible for the provision of unemployment statistics in U.S.?

Bureau of Labor Statistics (BLS)

theory of efficiency wages how does it help explain unemployment?

Efficiency-wage theory states that such a constraint on firms is unnecessary in many cases because firms may be better off keeping wages above the equilibrium level. worker health, worker turnover, worker quality, worker effort

What are the limitations of the unemployment rate? Why isn't it a perfect barometer of the labor market?

On the one hand, some of those who report being unemployed may not, in fact, be trying hard to find a job. They may be calling themselves unemployed because they want to qualify for a government program that gives financial assistance to the unemployed or because they are working but paid "under the table" to avoid taxes on their earnings. discouraged workers

How is unemployment affected by unions?

When a union raises the wage above the equilibrium level, it raises the quantity of labor supplied and reduces the quantity of labor demanded.

What is the theory of efficiency wages?

firms voluntarily pay above-equilibrium wages to boost worker productivity.

calculate unemployment rate

number of unemployed/labor force x100

What is "structural unemployment"?

occurs when there are fewer jobs than workers usually longer-term

What is "frictional unemployment"?

occurs when workers spend time searching for the jobs that best suit their skills and tastes short-term for most workers

How does the size of unemployment insurance affect unemployment level?

people respond to incentives