Labor Market and Unemployment Flashcards
You are employed when ?
You have either a part-time or full-time job
You’re unemployed when ?
They do not have a paid job,looked for work in the previous 4 weeks,and are available for work
The value of the marginal product of labor is?
The market value of a workers additional output for a firm.
Why does the labor supply curve slope upward ?
When wages increase,the opportunity cost of not working increases, leading more ppl to seek more work hours
What doesn’t cause the labor supply curve to shift
Shifts in the labor demand curve that causes a change in the wage rate
Labor Force
-People 16 and older who are either employed or unemployed and looking for work.
-Excludes retired people,
Potential Workers(Not in Labor Force)
-Not in labor force but who could potentially be
-Retirees
-Students
-Stay at home
-Gave up looking for a job
-Illness and disability
Frictional Unemployment
When you’re In-between Jobs
-If you get fired, you are fictionally unemployed
-When you enter the workforce to find your first job, you are fictionally unemployed
Structural Employment
Mismatch between skills that workers have and the skills that employers have want/need
Cyclical Unemployment
Unemployment that rises and falls with the business cycle. Increases during economic downturns and decreases during economic booms.
What Shifts Labor Demand Curve
-Output price or demand for the good changes
-Worker productivity (MPI) changes, due to changes in tech,physical and human capital
Labor Supply Curve Changes
-Worker preferences (more women entering the labor force during WW2
-Opportunity Cost of Time(labor vs leisure trade off
-Population demographics(older population results in less workers
Unemployment Rate Formula
Unemployed/Labor Force • 100
Labor Force Participation Rate Formula
Labor Force/Potential Workers • 100
Employment Rate
Employed/Labor Force • 100
Marginal Product of Labor
Change in output/Change in labor hours
Full employment is described as?
A low but positive unemployment rate due to frictional and structural unemployment
Value of marginal product of labor
Marginal product • Value of product
