note_ch28 - Chapter 28 Unemployment Unemployment is a...

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Chapter 28 Unemployment Unemployment is a measure of those who don’t work, but who would like to work. Measuring unemployment Labor Force = Employed + Unemployed Employed = those who are working Unemployed = those not working, but looking for a job Not in the labor force = those neither working nor looking for a job Unemployment rate = Unemployed/Labor Force Labor Force Participation Rate = Labor Force/Adult Population Unemployment rates vary considerably across demographic groups (see table 1). Labor force participation rates vary across demographic groups (see Figure 3). What does unemployment mean? It is supposed to measure utilization of labor
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But this can be hard to interpret for a number of reasons. (1) Some employed workers seek full time work, but are working only part time (2) Some individuals call themselves unemployed so they can qualify for unemployment benefits (3) There are discouraged workers, who leave the labor force – we might want to count them, but they don’t appear in the government statistics.
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