chapter 11 Flashcards
What is the working-age population
those aged 16 or older who are not in the military or institutionalized.
Who are the employed
working-age people who are
working.
Who are the unemployed
Working-age people without jobs who are trying to get jobs.
To be unemployed, you must be…
➢ Part of the working-age population.
➢ Not currently working.
➢ Actively searching for work.
➢ Able to accept a job if it were offered.
You are employed as long as you work at least BLANK during the week for BLANK of some kind.
- one hour
- pay
To be unemployed, you must…
be trying to get a job.
What is the labor force
the employed plus the
unemployed.
Who is not in the laborforce
Those in the working-age population who are neither employed nor unemployed.
➢ People who are retired, in school,
unwell, taking care of a child or family
member, or have given up looking for a job.
What is the labor force participation rate
the percentage of the working-age population that is either employed or unemployed.
What is the labor force participation rate equation
Employed + Unemployed divided by
Working age population x 100
what is the unemployment rate
the percentage of the labor force that is unemployed.
what is the unemployment rate formula
the unemployed divided by the labor force x 100
what is the equilibrium unemployment rate
the level of unemployment that occurs when the economy is doing well and everyone who wants a job at the going wage rate has one.
who are the long-term unemployed
people who have
been unemployed for six consecutive
months or longer.
who are the marginally attached
someone who wants a job and has looked for a job within the past year, but who isn’t counted as unemployed because they aren’t currently searching for work.
who are the underemployed
someone who has some work, but wants more hours, or whose job isn’t adequately using their skills.
what is the labor supply
the quantity of labor that individuals are willing and able to offer at different wage rates in a given period.
is the labor supply upward or downward sloping
Upward sloping: Workers supply more labor when wages are high.
what is the labor demand
the quantity of labor (workers) that employers are willing and able to hire at a given wage rate in a specific period
is the labor demand upward or downward sloping
Downward sloping: Employers demand less labor when the price of labor is high.
what is equilibrium
Where the quantity of labor demanded is equal to the quantity of labor supplied.
➢ Everyone who wants to work for the market wage is hired.
what is frictional unemployment
unemployment due to the time it takes for employers to search for workers, and for workers to search for jobs.
➢ Lots of time spent going on interviews, and considering which job is the best fit.
what is structural unemployment
unemployment that occurs because wages don’t fall to bring labor demand and supply into equilibrium.
➢ Wages may remain high as a result of unions, government, or employer actions.
what is cyclical unemployment
unemployment that is due to a temporary downturn in the
economy.
➢ During an economic downturn (2020 recession, 2008 recession), many resources,
including labor, go unused.
what are the three major factors that determine how much time it takes for workers and employers to find each other
- The efficiency of the resources
employers and workers use to find each other. - The alignment of the skills workers
have and the skills employers desire. - Unemployment insurance and other income support during unemployment.
what is the gap between the number of available jobs and the number of available workers called
structural unemployment.
what is Hysteresis
High levels of unemployment that increases the equilibrium unemployment rate.
what are the social costs of unemployment
- Unemployment is isolating and painful:
➢ Surveys show more likely to experience depression, anxiety, divorce, and poverty.
➢ Higher risk of death, including suicide. - Associated with worse outcomes:
Greater permanent earnings losses, and more likely to have health problems. - Children of laid-off workers:
Worse academic outcomes, worse mental health outcomes, and worse employment
outcomes, making less money as adults.
