Chapter 7 Flashcards
Unemployment
3 Unemployment facts:
- Unemployment rates differ greatly among groups
- A significant part of changes in labour force status is cyclical
- Most people who become jobless remain so for a short period of time
What qualifes a person as unemployed?
Has been looking for a job for 4 or less weeks, is waiting to be recalled to a job after being laid off
What qualifies someone as employed?
In the last week:
- Did 1+ hours of paid work
- Did 15+ hours of unpaid work for a family owned business
- On leave of some time (vacation, maternity, etc)
What two categories of people are not in the labour force?
- Someone who is unable to work
- A Discouraged searcher
What is the labour force participation rate?
of persons in the labour force divided by the working age population
What is the unemployment rate?
number of unemployed persons in the labour force
What is the employment rate?
the number of employed persons in the working age population?
What is cyclical unemployment?
When output is below the full employment level because unemployment is above its natural rate
What was Canada’s unemployment rate in in 2022?
5.3%
When was female unemployment lower/higher than male?
It was higher through the 1990s and was lower after that
What does “the Canadian labour market is dynamic” mean?
the labour market flow in and out of employment, unemployment and the labour force
What is the rate of job separation?
The ratio of employed people who become unemployed/ leave the labour force in a given month
What is the job finding rate?
The ratio of unemployed people who find a job in a given month
What does a short vs long duration of unemployment signify?
A short duration signifies people are moving quickly between jobs, a long duration signals a problem that the government may need to address
What does the Beveridge curve demonstrate?
Shows unemployment vs number of job openings
What is jobless recovery?
The notion of a lag between a recession ending and when the unemployment rate starts to fall
What is frictional unemployment?
The time spent looking for jobs, getting interviewed, etc
What is structural unemployment?
changes in the composition of the demand for labour
What is real wage unemployment?
results from government actions, such as a minimum wage above equilibrium rate
What is the non-accelerating rate of unemployment?
Aka the natural rate, is the positive rate that exists when output is at its potential level, and the labour force is fully employed
What is Hysteresis?
extended period of high unemployment raises the natural rate
How can the government discourage layoffs?
increase firms cost of laying off workers
What do policies to reduce the natural rate of unemployment do?
they increase the rate of job finding and reduce the separation rate
