Chapter 9 Flashcards
What is the difference between employed, unemployed, and not in the labour force?
employed - if they sent some time working a paid job in the previous week
unemployed- if they are on temporary layoff or is looking for a job
not in the labour force- someone who fits in neither (homemaker, student, retiree)
How do you calculate the unemployment rate?
number of unemployed / labour force x 100
How do you calculate the labour force participation rate?
labour force/ adult (+15) population x 100
What are the types of unemployment?
frictional
structural
What is frictional unemployment?
it takes time for workers to search for the jobs that best suit their skills
What is frictional unemployment?
it takes time for workers to search for the jobs that best suit their skills
What is structural unemployment?
number of jobs available in some labour markets is insufficient to provide a job for everyone who wants one
What is EI?
employment insurance - a government program that partially protects workers incomes when they become unemployed; creates incentive to enter the labour force
What are the drawbacks to EI?
may cause unemployment rate to be higher than it otherwise would be
What is a union?
a worker association that bargains with employees over wages and working conditions; collective bargaining
What are efficiency wages?
above equilibrium wages paid by firms in order to increase worker productivity.
What are the theories surrounding efficiency wages
- better paid workers are healthier and more productive
- worker turnover decreases
- high wages make workers more eager to keep their job and put in more effort
- attracts a better pool of workers and increases worker quality
Why is it difficult to tell the difference between unemployed and not in the labour force?
people move in and out often (not looking that hard, claim to be unemployed because of EI, paid under the table, doesn’t show those with PT that want FT); discouraged searchers
