ch15-1 - Lecture(s)6&7 UNEMPLOYMENT UNEMPLOYMENT 1...

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UNEMPLOYMENT UNEMPLOYMENT UNEMPLOYMENT 1
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In this chapter,  In this chapter,  look for the answers to these questions: 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
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UNEMPLOYMENT 3
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UNEMPLOYMENT 4
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Describing Unemployment Three basic but important issues: A) How does government measure the economy’s rate of unemployment? B) What problems arise in interpreting the unemployment data? C) How long are the unemployed typically without work?
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UNEMPLOYMENT 6 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 The survey is called the Current Population Survey (CPS). It is a monthly survey of 60,000 households. It provides a comprehensive body of data on the labor force, employment, unemployment, persons not in the labor force, hours of work, earnings, and other demographic and labor force characteristics. Based on “ adult population ” (people 16-65 yrs) also called “ working-age population ”, or “ civilian labor force ”. Based on the answers to the survey questions, the BLS places adult population into 3 groups…
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UNEMPLOYMENT 7 Labor Force Statistics Employed : paid employees, self-employed, and unpaid workers in a family business. In particular, a   person is considered employed if he or she has spent most of the previous week working at a paid job. Unemployed : people not working who have actively looked for work during previous 4 weeks (but could not find it, obviously). Actively looking for work includes activities such as contacting a possible employer, contacting an employment agency or employment center, having a job interview, sending out resumes, filling out job applications, placing or answering job advertisements, and checking union or professional registers. Not in the labor force : everyone else The labor force (LF) is thus = # employed + #unemployed.
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UNEMPLOYMENT 8 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 LF Unemployment rate (“u-rate”): % of the LF that is unemployed u-rate # of unemployed labor force = 100 x Employment rate : % of the LF that is employed
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Measuring the Unemployment Rate and the Labor Force Participation Rate CPS classification The Employment Status of the Civilian Working-Age Population, June 2005
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A C T I V E  L E A R N I N G   1 1         Calculate labor force statistics Calculate labor force statistics 10 Compute the labor force, u-rate, adult population,
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ch15-1 - Lecture(s)6&7 UNEMPLOYMENT UNEMPLOYMENT 1...

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