Chapter 12 Unemployment Inflation

Chapter 12 Unemployment Inflation -...

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Chapter 12 Unemployment Inflation  09/11/2010 05:21:00 How is unemployment measured?  BLS (Board of Labor Statistics) produces data using the monthly  unemployment survey  o Survey   60,000 HH a month in the current population survey  Place each adult (16 yrs or older into 1 of 3 categories):  o 1) employed: includes workers who are paid employees, work in their own  business, work as unpaid workers in family business  o 2) unemployed: includes individuals who are not employed, but where available  to work and tried to find employment during previous 4 weeks  o 3) Not in labor force: fulltime students, homemakers, retirees, imprisoned,  discouraged workers  Labor Force (LF):  LF = unemployed + employed  Active military does not count in labor force  Unemployment rate (UR): % of LF that is unemployed  UR = (unemployed/ LF) * 100  LF = unemployed + employed  UR = (unemployed/ LF) * 100 Labor force participation rate: The % of the adult population that is in the LF  
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o LF participation rate = (LF/adult pop) * 100 Total adult pop = 250,000 Total unemployed = 15,000 Total employment = 135,000 LF = unemployed + employed = 15,000 + 135,000 =  15,000 LF part rate = LF/adult pop = 15,000/25,000 = 60% Unemployment rate = (unemployed/LF)*100=  15,000/150,000 = 10% Problems with measuring unemployment  False reporting issues:  o Claim to be unemployed when working under the table (over counts)  Counts PT work as unemployed even if person would prefer FT work  (underemployed) (understate unemployed)  Discouraged workers (understate) people who are available to work but have 
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Chapter 12 Unemployment Inflation -...

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