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Chp:14 Unemployment
Econ class unemployment chapter
| Term | Definition |
|---|---|
| Unemployed | Person sixteen years or older who searched for work in last four weeks but not currently employed |
| Employed | Person who has worked at least one hour in previous two weeks |
| Labor force | Number of employed persons plus number of unemployed persons |
| Unemployment rate | Percentage of the labor force not currently employed |
| Labor force participation rate | Percentage of working age population classified as either employed or unemployed |
| Employment-to-population ratio | Percentage of working age population classified as employed |
| Marginally attached workers | Not considered in official unemployment rate |
| "Discouraged workers" | Unemployed in general sense but do not meet technical definition so official unemployment rate does not reflect their numbers |
| U1 | Unemployment rate that only includes people unemployed fifteen weeks or longer |
| U2 | Unemployment rate that only includes people who have lost a job as opposed to those who have quit or those who have entered or reentered labor force |
| U3 | Official unemployment rate |
| U4 | Unemployment rate that adds discouraged workers to the official unemployment rate |
| U5 | Unemployment rate that includes all marginally attached workers |
| U6 | Most all-inclusive measure of unemployment as published by the BLS. Includes all listed in U1-U5 plus those who are employed part time because of economic reasons |
| Frictional unemployment | Occurs when people voluntarily enter the labor force or when they are between jobs for which they are qualified |
| Structural unemployment | Occurs when job seekers' skill sets are not in demand because of geography or obsolescence |
| Creative destruction | When workers must retrain or accept a lower paying job in an industry that requires less skill. Structural unemployment is often the outcome of this |
| Efficiency wages | Those that exceed the equilibrium market wafe |
| Cyclical unemployment | Occurs because of contractions in the business cycle. It is not voluntary nor is it result of a skill set mismatch |
| Full employment | Occurs when cyclical unemployment is not present in the economy and is the economic nirvana goal that policymakers seek to maintain |
| Natural rate of unemployment | The rate of unemployment that exists when there is no cyclical unemployment present in the economy and is thought to be independent of the inflation rate |
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