Chap 8 student - Unemployment 1 Main points: Main points:...

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Unformatted text preview: Unemployment 1 Main points: Main points: How unemployment is measured The natural rate of unemployment Why there are always some people unemployed How unions and minimum wage laws affect unemployment Efficiency Wages and unemployment 1 2 Labor Force Statistics Based on regular survey of 60,000 households (Dept of Labor, BLS) Based on adult population (16 yrs or older) 3 Labor Force Statistics BLS divides population into 3 groups: Employed : paid employees, self-employed, and unpaid workers in a family business Unemployed : people not working who have looked for work during previous 4 weeks Not in the labor force : everyone else The labor force is the total # of workers, including the employed and unemployed. 4 Adult Population Employed Unemployed Labor Force + Not in Labor Force Adult Population 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 6 Practice Practice 6 Compute the labor force, u-rate, adult population, and labor force participation rate using this data: Adult population of the U.S. by group, June 2010 # of employed 140.0 million # of unemployed 14.7 million not in labor force 80.9 million 7 Labor force = employed + unemployed = 140.0 + 14.7 = 154.7 million U-rate = 100 x (unemployed)/(labor force) = 100 x 14.7/154.7 = 9.5% Practice Practice 7 8 Population= labor force + not in labor force = 154.7 + 80.9 = 235.6 LF partic. rate = 100 x (labor force)/(population) = 100 x 154.7/235.6 = 65.7% Practice Practice 8 9 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. 10 Labor Market Statistics for Whites & Blacks, June 2008 Adults (20 yrs & older) u-rate LF part. rate White, male 4.5% 76.1% White, female 4.2 60.4 Black, male 9.3 71.5 Black, female 7.4 64.3 11 Labor Market Statistics by Education Level, June 2008 Adults (25 yrs & older) u-rate LF part. rate less than h.s. 8.7% 45.9% h.s. diploma 5.1 62.8 some college or assoc degree 4.2 71.9 bachelors degree or more 2.3 78.1 12 20 30 40 50 60 70 80 90 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 LF Participation Rates by Sex, 1950-2007 Men Women 13 Practice Practice 13 In each of the following, what happens to the u-rate?...
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This note was uploaded on 01/05/2012 for the course ECN 222 taught by Professor Lawson during the Summer '08 term at University of North Carolina Wilmington.

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Chap 8 student - Unemployment 1 Main points: Main points:...

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