Unemployment
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Unemployment - Introduction to Macroeconomics - Lecture Slides, Slides of Introduction to Macroeconomics
This course discusses the important economic theories and concepts that facilitate understanding economic events and questions. Its main focus is on analyzing the behavior of important economic aggregates such as national income, unemployment, inflation, interest rates, exchange rates and economics growth. Key points of this lecture are: Unemployment, Natural Rate of Unemployment, Cyclical Rate of Unemployment, Identifying Unemployment, Unemployment Facts, Bureau of Labor Statistics, Current Pop
Typology: Slides
2012/2013
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Unemployment
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UNEMPLOYMENT
- The problem of unemployment is usually seen as two separate problems: - The long-run problem, and - the short-run problem
- The long-run problem focuses on reducing the natural rate of unemployment
- The short-run problem focuses on reducing the cyclical rate of unemployment
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IDENTIFYING UNEMPLOYMENT
- Cyclical Unemployment
- Cyclical unemployment refers to the year-to-year fluctuations in unemployment around its natural rate.
- It is associated with with short-term ups and downs of the business cycle.
- This chapter ignores cyclical unemployment
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UNEMPLOYMENT FACTS
- Three Basic Questions:
- How does government measure the economy’s rate of unemployment?
- What problems arise in interpreting the unemployment data?
- How long are the unemployed typically without work?
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How Is Unemployment Measured?
- Based on the answers to the survey questions, the BLS places each adult into one of three categories: - Employed - Unemployed - Not in the labor force
- Labor force = employed + unemployed
- Adult population = labor force + not in the labor force docsity.com
How Is Unemployment Measured?
- The BLS considers a person an adult if he or she is over 16 years old.
- An adult is considered employed if he or she has spent most of the previous week working at a paid job.
- An adult is considered unemployed if he or she
- is on temporary layoff,
- is looking for a job, or
- is waiting for the start date of a new job. docsity.com
Copyright © 2004 South-Western
Figure 1 The Breakdown of the
Population in 2009
Adult Population (235.9 million)
Labor Force (154.2 million)
Employed (139.9 million)
Not in labor force (81.7 million)
Unemployed (14.3 million)
Unemployment Rate = 100 14.3 ÷ 154.2 = 9.3%
Labor Force Participation Rate = 100 154.2 ÷ 235.9 = 65.4%
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How Is Unemployment Measured?
- The unemployment rate is the percentage of the labor force that is unemployed.
Unemployment rate = Number unemployed Labor force
100
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Copyright © 2004 South-Western
Table 1: The Labor-Market Experiences
of Various Demographic Groups
This table shows the unemployment rate and the labor-force participation rate of various groups in the U.S. population for 2009. docsity.com
Copyright © 2004 South-Western
Figure 2: Unemployment Rate since
This graph uses annual data on the U.S. unemployment rate to show the percentage of the labor force without a job. The natural rate of unemployment is the normal level of unemployment around which the unemployment rate fluctuates; it is estimated by economists at the Congressional Budget Office. docsity.com
Copyright © 2004 South-Western
Figure 3: Labor-Force Participation
Rates for Men and Women since 1950
This figure shows the percentage of adult men and women who are members of the labor force. Over the past several decades, women have entered the labor force, and men have left it. docsity.com
Copyright © 2004 South-Western
What explains the rise in the female
participation rate?
- New technology in the home
- Women have more time available for paid work
- Improved birth control
- Fewer children to take care of
- Changing political and social attitudes - Greater employment opportunities for educated women
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Does the Unemployment Rate Measure What We Want It To?
- It is difficult to distinguish between a person who is unemployed and a person who is not in the labor force. - Discouraged workers , people who would like to work but have given up looking for jobs after an unsuccessful search, don’t show up in unemployment statistics. - Other people may claim to be unemployed in order to receive financial assistance, even though they aren’t looking for work. docsity.com
Copyright © 2004 South-Western
Table 2: Alternative Measures of Labor
Underutilization The table
shows various measures of joblessness for the U.S. economy. The data are for April 2010.
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