Lecture 10 - Chapter 8: The Unemployment Rate Econ 1120

with unemployment, what are labor characteristics

-how productive is yourn labor force -is your labor force well-educated, what types of jobs can they do -waht type of jobs available in your economy -is the education matching the jobs becoming avaialble

very important macro indicators with regards to productivity measures

-output per worker hour -capital per worker -capacity utilization rates

What counts as an employed person

An employed person is any person 16 years old or older who: works for pay, either for someone else or in his or her own business for 1 or more hours per week, works without pay for 15 or more hours per week in a family enterprise, or has a job but has been temporarily absent, with or without pay.

With regards to unemployment what are UI benefits

Unemployment insurance benefits - help people through spell of unemployment. Intereting to look at how existence of unemployment benefits have changed the bevhor of people that find themselves unemployed

when we have an aggregate average of unemployment

We have duration/spells of unemployment ex. how many months has it taken for you to get employed -how many spells of unemployment has a typical person gone through

with regards to unemploymnet what are search models and transiton rates

help us understand how UI benefits help us understand how unemployment insurance benefits actually impact the way that labor markets work With regards to transition rates, the best way to find a job is to have a job.

who are the peiople not in the labor force**

included are persons 16 years of age or older residing in the 50 states and the Distritc of Columbia who are not inmates of institutions (for example, penal and mental facilities, homes for the aged), and who are not an active duty in the Armed Forces

population

labor force + not in labor force**

labor force participation rate =

labor force / population x100%

equation for natural rate of unemployment

natural rate. = frictional + structural

A person who is not looking for work, either because or he or she does not want a job or has given up looking, is _____

not in the labor force

Who is an unemployed person

popee plantAn unemployed person is a person 16 years old or older who: is not working, is available for work, and has made specific efforts to find work during the previous 4 weeks.NOTE: persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

Cyclical unemployment

the icnrease in unemployment that occurs during recessions and depressions -unemployment created during the swings in the business cycle

Frictional unemployment

the portion of the unemployment that is due to the normal working of the labor market; used to denote short run job/skill matching problems

Structural unemployment

the portion of unemployment that is due to changes in the structure of the economy that results in a significant losss of jobs in certain industries -

the natural rate of unemployment

the unemployment that occurs as a normal part of the functioning of the economy. -At other times, the natural rate of unemployment is the rate of unemployment where we would've no inflationary pressures. In other words, its the rate of unemployment that leads to nonaccelerating inflation in the economy rate of unemployment that you would have in an economy as people match jobs and get the right jobs. As individuals find new job skills when economy changing structurally.

with unpmployment there are _____ in labor force participation

trends -people not thinking they're going to get a job, they're discouraged, be careful about thinking problems have been solved

anotehr issue masked by aggregate average of unemployment rate

under vs over employment 1. Under employed is basically working in a job that doesn't using the job or ecuation experience someone may have 2. Over employment - people working more than they really want to work if they had their way -Supposed traditional family with dad raise earner and mom secondary wage earner -if employers want fulltime work, and she accepts full time work, but she would really want to work part time.

Unemployment rate

unemployed / (employed + unemployed) x 100%

Very important macro indicators with regards to income and product measures, especially across countries

-Gross National income -Disposable income -Personal income -median income

Who is respondible for defining and measuring the unemployment rate in the US

-United States department of labor, bureau of labor statistics -Is the principal Federal agency responsible for measuring the labor market activity, working conditions, and price changes in the economy. Its mission is to collect, analyze and disseminate essential economic information to support public and private decision making. As an independent statistical agency, BLS serves its diverse user communities by providing products and services that are objective, timely, accurate, and relevant

what are very important macro indicators with regards to employment measures

-employment -job creation -job destruction -average work week

unemployment is only an

aggregate average - every person who is unemployed has a story behind them.

labor force =

employed + unemployed