Unemployment
1. Measurement
- Labor force = employed + unemployed
- Unemployment rate = 100 × unemployed
/ labor force
- Labor force participation rate = 100 ×
labor force / adult population
- Not in the labor force includes students, homemakers, retirees,
institutionalized ...
- Employment Situation
2. Types of unemployment
- Frictional unemployment
- Structural unemployment
- Cyclical unemployment
- Natural rate of unemployment
- Discouraged workers
3. Sources of unemployment
- "Most spells of unemployment are short, and most unemployment observed
at any given time is long term."
- Job search: unemployment insurance, employment agencies
- Minimum wage laws
- Unions
- Efficiency wages