Lecture+9 - 1 Economics 102 Lecture 9 Unemployment LECTURE...

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Unformatted text preview: 1 Economics 102 Lecture 9 : Unemployment LECTURE 9 UNEMPLOYMENT 1 Unemployment § There are almost no typewriter repairmen left, but Geek Squad has hired over 12,000 in the last few years. • How do changes in a growing and dynamic economy affect unemployment? § The unemployment rate in France has fluctuated around 10% for the last twenty years. • Why so high? LECTURE 9 UNEMPLOYMENT 2 In this lecture, look for the answers to these questions: § How is unemployment measured? § What is the “natural rate of unemployment”? § Why are there always some people unemployed? § How is unemployment affected by unions and minimum wage laws? § What is the theory of efficiency wages, and how does it help explain unemployment? 2 LECTURE 9 UNEMPLOYMENT 3 Labor Force Statistics § Produced by Bureau of Labor Statistics (BLS), in the U.S. Dept. of Labor § Based on regular survey of 60,000 households § Based on “adult population” (16 yrs or older) LECTURE 9 UNEMPLOYMENT 4 Labor Force Statistics BLS divides adult population into 3 groups: • employed : paid employees, self-employed, and unpaid workers in a family business • unemployed : people not working but who have looked for work during previous 4 weeks • not in the labor force : everyone else The labor force is the total number of workers, including the employed and unemployed. LECTURE 9 UNEMPLOYMENT 5 labor force participation rate labor force adult population = 100 x Labor Force Statistics Labor force participation rate : % of the adult population that is in the labor force Unemployment rate (“U-rate”): % of the labor force that is unemployed U-rate # of unemployed labor force = 100 x 3 LECTURE 9 UNEMPLOYMENT 6 E X E R C I S E E X E R C I S E 1: : Calculate labor force statistics Calculate labor force statistics Compute the labor force, u-rate, adult population, and labor force participation rate using this data: 6 78.7 million not in labor force 7.1 million # of unemployed 146.1 million # of employed Adult population of the U.S. by group, July 2007 LECTURE 9 UNEMPLOYMENT 7 Labor Market Statistics for Different Groups § The BLS publishes these statistics for demographic groups within the population. § These data reveal widely different labor market experiences for different groups. § See text for some discussion. LECTURE 9 UNEMPLOYMENT 8 Labor Market Statistics by Education Level, January 2006 62.5 4.4 h.s. diploma 46.0% 7.0% less than h.s. 78.3 2.1 bachelor’s degree or more 72.5 3.5 some college or assoc degree LF part. rate u-rate Adults (25 yrs & older) 4 LECTURE 9 UNEMPLOYMENT 9 LF Participation Rates by Sex, Since 1950 20 30 40 50 60 70 80 90 100 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Men Women LECTURE 9 UNEMPLOYMENT 10 E X E R C I S E E X E R C I S E 2: : The unemployment rate The unemployment rate In each of the following, what happens to the U-rate?...
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Lecture+9 - 1 Economics 102 Lecture 9 Unemployment LECTURE...

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