CH.10 - Unemployment -
What are the 3 groups that BLS divide the civilian non-institutional population?
1.) Employed 2.) Unemployed 3.) Not in the labor force
What are 3 reasons why u-rate is not a perfect indicator of joblessness or the health of the job market?
1.) Excludes discouraged workers 2.) Doesn't distinguish between full-time & part-time work, or people working part time because of unavailability of full-time jobs 3.) Some people misreport their work status
What are 2 things that cause frictional unemployment?
1.) Job Search 2.) Sectoral shift
What are 2 things that the BLS base labor force statistics on?
1.) Monthly surveys of 60,000 households 2.) "Adult population" (16 or older)
What are 2 things that cause structural unemployment?
1.) Weight rigidity above equilibrium wage 2.) Surplus in workers
What is the fraction of unemployed, employed in under 5 weeks?
1/3
Calculate unemployed rate ("u-rate")
100% X (# of unemployed) / (labor force)
Calculate labor-force participation rate
100% X (labor force) / (adult population)
What is the fraction of unemployed, employed in under 14 weeks?
2/3
What is the % of unemployed have been unemployed for over 6 months?
20%
Define cyclincal unemployment
Deviation of unemployment from its natural rate, associated with business cycles, and can be positive or negative depending on the natural rate
Define Structural Unemployment
Long-term; Occurs when there are few jobs than workers
Define natural rate of unemployment
Natural rate of unemployment around which the actual unemployment rate fluctuates
Which race, gender group has the lowest labor force participation rate for adults (20 yrs and older)?
White, Female
Which group of adults have the lowesr labor force participation rate based on education level?
< High School Diploma
Which group of adults have the highest u-rate based on education level?
< High school diploma
Define unemployed.
A person who is currently not employed but is actively looking for work (during the last 4 weeks)
Define employed.
A person working at least 1 hour per week for pay or at least 15 hours per week as an unpaid worker in a family business
Which group of adults have the highest labor force participation rate based on education level?
Bachelors or More
Which group of adults have the lowest u-rate based on education level?
Bachelors or More
Which race teen group has the highest u-rate?
Black
Which race, gender group has the highest u-rate for adults (20 yrs and older)?
Black, Female
Which race teen group has the lowest labor force participation rate?
Blacks
Who produces labor force statistics?
Bureau of Labor Statistics (BLS)
Define labor force.
Employed plus unemployed
Define not in the labor force.
Everyone else (disabilities, homeless, retirees, high school/college students, workers under 16, stay-at-home parents)
What are 2 types of natural rate unemployment?
Frictional and Structural
Which race, gender group has the highest labor force participation rate for adults (20 yrs and older)?
Hispanic, Male
Define civilian non-institutional population.
Population that does not include inmates or prisons and who are not active duty in armed forces
Define Frictional Unemployment
Short-term; Occurs when workers spend time searching for the jobs that best suit their skills and tastes
Which race, gender group has the lowest u-rate for adults (20 yrs and older)?
White, Female
Which race teen group has the highest labor force participation rate?
White
Which race teen group has the lowest u-rate?
White