Labor Markets

Labor Markets - Labor Markets and Unemployment I. Labor...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Labor Markets and Unemployment I. Labor Supply A. Labor Force – the number of working-age, civilian, non-institutionalized people (henceforth called “adult pop”) who are either employed or unemployed. Labor Force = # employed + # unemployed 2 key ratios: 1. Labor Force Participation Rate = (labor force)/(adult pop). 2. Unemployment rate (µ) = (# unemployed)/(labor force). B. Unemployment 1. Natural Rate of Unemployment – a “normal” or average rate of unemployment. This term leaves much to be desired. It obviously depends on what sort of time frame is being considered; the average unemployment rate for the last 30 years is 6.17%, but the average rate over the last 10 years is 4.94%. 2. Cyclical unemployment – deviations from the natural rate due to upswings or slowdowns in the economy. 3. Measurement difficulties a. overestimation: b. underestimation: discouraged workers lead to underestimation of the true unemployment rate.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4. Types of unemployment: a. frictional unemployment – results from costs associated with matching the right workers with the right jobs. b. structural unemployment – results when there is insufficient demand for workers in a given labor market due to changes in technology, or in the demand for the g/s. c. seasonal unemployment – from systematic changes throughout the year. d. induced unemployment – government (or other) institutions can cause unemployment. C. Labor Supply Curve – there are many different labor markets associated with the many different skill sets that workers may have. 1.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 8

Labor Markets - Labor Markets and Unemployment I. Labor...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online