Econ Chapter 9 Unemployment
Why would the Bureau of Labor (BLS) OVERSTATE the true degree of unemployment?
1) Claim to be actively looking, but aren't. 2) Jobs in the underground economy
Why would the Bureau of Labor (BLS) UNDERSTATE the true degree of unemployment?
1) Discourage Workers 2) Involuntary part-time workers
What are the 3 conditions to be unemployed?
1) Don't have a job 2) Available for work 3) Actively looking for work in the last four weeks
What are the 3 types of unemployment?
1) Frictional 2) Structural 3) Cyclical
What advice would you give to someone looking for a job in frictional unemployment?
Keep searching, there are jobs for which you are qualified; Don't get discouraged
Natural Rate of Unemployment
Normal rate of unemployment consisting of frictional unemployment plus structural unemployment (Cyclical unemployment equals 0%)
What advice would you give to someone looking for a job in structural unemployment?
Retrain or re-locate
Frictional Unemployment
Short-term unemployment arising from the process of matching workers with jobs Key Words: Search & Qualified
What would happen if cyclical unemployment were eliminated in the economy?
The economy is considered to be at full employment
How do you calculate the unemployment rate?
Unemployed divided by Labor Force Labor Force= Employed + Unemployed
Structural unemployment
Unemployment arising from a persistent mismatch between the skills & characteristics of workers and the requirements of jobs. (Caused by a change in the structure of the economy) Key Words: Mismatch; could be long-term
Cyclical Unemployment
Unemployment caused by a business cycle recession or slow down Key Words: Decrease in total number of jobs