Chapter 10 Flashcards
Definition of ‘Unemployment’ and Government definition
a situation where someone wants to work but cannot find a job in the current market.
‘aged 15 years and older who didn’t work last week, was available to do so, and made efforts to work in 4 week period.’
3 Traits to being considered ‘Unemployed’
- Did not work in previous week
- Were available to work if they were offered a job
- Were making efforts to look for a job
We also want to be sure to only count those people who are available to work, and making efforts to find employment
Definition of ‘Labour Force’
Everyone who has a job or is unemployed; over 15 years old and part of general public.
Equation for ‘Unemployment Rate’
(# of unemployed / labour force) x 100
Definition of ‘Working Age Population’
the civilian, non institutionalized population aged 15 and over. All Adults except those in armed forces or inmates in an institution.
Examples of populations that are NOT counted in unemployment rate.
full time students, people living with disabilities, parents taking care of children, retired people
These people are part of the labour force.
Equation for Labour Force Participation Rate
(# of people in labour force / working age population ) x 100
What does the Labour Force Participation Rate tell us?
Indicates what fraction of the population wants to be working regardless of whether or not they have a job
Definition of “Discouraged Workers” and “Underemployed Workers” and “Labour Force Survey”
Discouraged = people who were looking for work but have given up because of labour market conditions
Underemployed Workers = people who are either working less than they would like or in jobs below their skill.
“Labour Force Survey” gathering information on the 60,000 households
“Labour Demand Curve” definition
The Labour Demand Curve shows the relationship between the total quantity of labour demanded by all the firms in the economy and the wage rate.
Firms will want to hire more labour when wages are lower and less labour when wages are higher.
Labour Demand Curve: description
Describes the firms of the market and their wages - labour demand
The graph shows that with low units of labour, wages are high.
Labour Supply Curve: description
Descrbies the workers in the market. As wage goes up, labour supply increases (units of labour wanting to work).
Relationship between the total labour supplied in the economy and the wage rate. More labour at higher wage rates and less labour at lower wages.
Definition of ‘Equilibrium’
A place in the economy with stable wage, and amount of labour bought and sold. Does not explain unemployment. At this point, quantity demanded is equal to quantity supplied.
Unemployment occurs when the wage rate is higher than the equilibrium wage. Creates a ‘surplus in workers
ie) When there’s a gap between the number of people and the # of jobs offered due to wage.
Definition of ‘Natural Rate of Unemployment’
The normal level of unemployment that persists in an economy in the long run. 3 Factors contribute to this rate: 1. Frictional Unemployment 2. Structural Unemployment 3. Real Wage or Classical Unemployment
‘Frictional Unemployment’ Definition
Caused by workers who are changing location, job, career. Naturally part of any economy because as jobs change, so do employees - there’s time in between finding jobs and applications.
