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ec-1 - Chapter 8 Unemployment and Inflation Employment and...

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Chapter 8: Unemployment and Inflation Employment and Unemployment After this discussion you should be able to: Define and calculate the unemployment rate, the labor force participation rate, and employment-population rate. Identify the three types of unemployment. Explain what factors determine the unemployment rate. Problems in Measuring Unemployment How Unemployment is Measured The unemployed are people who are looking for work but do not have jobs. The employed are people who have jobs. Labor force = employed + unemployed Unemployment rate = (unemployed ÷ Labor force) x 100 Labor force participation rate = (Labor force ÷ working age population) x 100 The U.S. Government’s Bureau of Labor Statistics (BLS) uses two statistics from two major surveys, the Current Population Survey (household survey) and the Current Employment Statistics Survey (establishment survey) to report employment data each month. The household survey provides the information on the labor force, employment, and unemployment that is derived from a sample survey of about 60,000 households conducted by the U.S. Census Bureau for the BLS. Each month during the week that has the 12 th day in it the household survey is taken. Questions asked and Categorization of responses to the household survey The sample is selected to reflect the entire civilian (not in the military) non-institutional population (people who are not in mental hospitals or prison). 1
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Based on responses to a series of questions on work and job search activities, each person 16 years and over in a sample household is classified as employed, unemployed, or not in the labor force. People are classified as employed if , They did any work at all as paid employees during the reference week Worked in their own business, profession, or on their own farm Worked without pay at least 15 hours in a family business or farm
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