Ch. 11 - Unemployment Flashcards
What is the working-age population?
Those age 15 or older who are not a full-time member of the Canadian Armed Forces or institutionalized
Define employed
Define unemployed
Working-age people who are working
Working-age people without jobs who are trying to get jobs
What are the requirements to be considered unemployed?
- Part of the working-age population
- Not currently working
- Actively searching for work
- Able to accept a job if offered
What is the labour force?
The employed + the unemployed
Who isn’t in the labour force?
Those in the working-age population who are neither employed nor unemployed
What is the Labour Force Participation Rate? How do you calculate it?
The percentage of the working-age population that is either employed or unemployed
LFPR = ((Employed + Unemployed) / Working-age Population) X 100
What is the Unemployment Rate? How do you calculate it?
The percentage of the labour force that is unemployed
UR = (Unemployed / Labour Force) X 100
What is the Equilibrium Unemployment Rate?
The long-run unemployment rate to which the economy tends to return to
= Frictional Unemployment + Structural Unemployment
What defines Long-Term Unemployment?
People who have been unemployed for six consecutive months or longer
What are discouraged searchers?
Someone who wants a job but isn’t counted as unemployed because they aren’t currently searching for work since they don’t believe they’ll find anything suitable
What does it mean to be underemployed?
Someone who has some work but wants more hours, or whose job isn’t adequately using their skills
What is Involuntary Part-Time?
Someone who wants full time work and is working part-time because they haven’t found a full time job
What are the 3 types of unemployment? Define each one
- Frictional Unemployment
- Unemployment due to the time it takes for employers to search for workers and for workers to search for jobs - Structural Unemployment
- Unemployment that occurs because wages don’t fall to bring labour demand and supply into equilibrium - Cyclical Unemployment
- Unemployment that is due to a temporary turndown in the economy
What are reasons for frictional unemployment?
- The efficiency of the resources employers and workers use to find each other
- The alignment of the skills workers have and skills employers desire
- Employment insurance and other income support during unemployment
What are reasons for structural unemployment?
- Efficiency Wages make it unprofitable for employers to lower wages and lower total costs and create unemployment
Institutional Factors
- Unions can keep wages high for some workers
- Job protection regulations make it hard to fire workers
- The minimum wage keeps wages from falling below the set minimum wage
