Unemployment Flashcards
Why is unemployment important?
Unemployment significantly affects the real GDP. A lower real GDP translates to a lower standard of living.
Why is prolonged unemployment a big problem?
- Financial stress
- Health problems
- Marital stress
- Social unrest (crime increase)
- Loss of human capital
Who are considered out of the labor force?
Individuals who are neither employed nor actively seeking employment
- Full time students
- Retirees
- Discouraged workers
- Disable individuals
- Volunteers
- Homeworkers
- People serving in the army
What are the 3 categories to be counted as unemployed?
1) Without work but has been actively looking for a job within the previous 4 weeks.
2) Not working but has a new job to start within 4 weeks.
3) On a temporary layoff with an exception of recall.
John looked for work for six months but could not find a job to his liking. He now gave up seeking a job and spends his time at the beach. For purposes of employment he is considered:
A) out of the labor force.
B) unemployed.
C) employed in the underground economy.
D) underemployed.
A) out of the labor force
How do u calculate the Unemployment Rate?
UR = (unemployment / total labor force) x 100
If the unemployment rate is 8 percent, then this means:
A) 8 percent of the population is unemployed.
B) 8 percent of the population age over sixteen is unemployed.
C) 8 percent of the labor force is unemployed.
D) the number of unemployed persons equals 8 percent of the
employed persons.
C) 8 percent of the labor force is unemployed.
In November 2010 the labor force in Econland, was 14,800. There were 14,483 persons employed. The local unemployment rate
A) was 1.2%.
B) was 2.1%.
C) was 5.6%.
D) was 7.1%
B) was 2.1%.
Utopiacity has a working age population of 20 million. Of those,
11 million are employed and 1 million are unemployed. The
unemployment rate is
A) 5%
B) 8.1%
C) 8.3%
D) 5%
C) 8.3%
Utopiacity has a working age population of 20 million. Of those,
11 million are employed and 1 million are unemployed. The
participation rate is
A) 55%
B) 65%
C) 56%
D) 60%
D) 60%
Find Labour Force Participation Rate (LFPR),
Employment Rate (ER), and Unemployment rate (UR)
Heading Data in Thousands
Population 15 yrs + 27,072.6
Labour Force 18,307.2
Employment 17,145.2
Full-Time Employment 13,992.4
Part-time employment 3,152.9
Unemployment 1,162.0
UR = (U/ LF) x 100 = (1,162.0/ 18,307.2) x 100 = 6.3%
LFPR = (LF/ WAP) x 100 = (18,307.2 / 27,072.6) x 100 = 67.6%
ER = (E/ WAP) x 100 = (17,145.2 / 27,072.6) x 100 = 63.3%
How do u calculate the labor force participation rate (LFPR)?
( Labor Force / Working age population (WAP) ) x 100
How do you calculate the Employment Rate (ER)
(Employment / WAP) x 100
What are hidden (disguised) unemployment ?
People who are able and eager to have a full-time and/or suitable job but do not have the desired job. Officially, they are NOT counted as unemployed, but are
➢ Underutilized in the labor market, or
➢ Discouraged workers (effectively unemployed)
What is the first group of hidden (disguised) unemployment, people who are officially employed but not in a very efficient way.
➢ Part-time or temporary workers - these people may qualify as hidden unemployment if they desire to obtain and are capable of performing full-time work. They are also referred to as involuntary part-time workers.
➢ Underemployed – those who have jobs that are below their skills or qualifications and they would prefer a more suitable employment (e.g. an experienced technician like a welder or plumber that accepts a job delivering pizzas if the suitable work is not available).
What is the second group in hidden employment, including people who are discouraged in seeking for a job. Therfore, categorized as “not in the labour force.”
Discouraged workers: they are not counted in the official unemployment statistics because they are not actively seeking work. However, they want and are available for a job.
What can the issue of hidden employment lead to?
- An underestimation of the true level of unemployment in an economy.
- It can affect economic policies: Governments may need to target policies to address job quality and workforce participation.
What is cyclical unemployment?
Unemployment that increases during a recession and decreases during an economic expansion. It’s a type of unemployment that arises due to fluctuations over the course of the business cycle.
What is frictional unemployment?
It includes seasonal and job transition unemployment (when people move between jobs or entering the labour market for the first time). It is usually short-term unemployment.
What are government policy examples for frictional unemployment?
Spending on job search by career counseling services, and providing accurate labor market information to help match job seekers with available vacancies more efficiently.
What is an example of job transition?
After you graduate from Vanier College, it will take some time to find a job (the job search process is not instantaneous).
What is seasonal unemployment and give an example?
It occurs regularly due to changes in demand for labour in certain industries (e.g., agriculture, tourism, retail, construction). Ex: In Canada, ski resort workers face seasonal unemployment in the summer, while farm labour may experience it in winter.
These fluctuations are considered normal and do not indicate an
economic recession.
What is structural unemployment?
It results from a structural change in the economy, such as the development of a new technology or industry that may create a mismatch between the skills workers have and the skills needed by employers. It occurs because individuals lack skills valued by
employers. It can be long term.
What are some government policy examples for structural unemployment?
Spending on education, vocational training (chef, mechanic, computers, etc.) Supporting structurally unemployed people through income supplements (e.g. employment insurance benefit
Give an example of structural unemployment
Increased international competition
➢ Causes a decrease in the demand for a product. Then, the demand for labour associated with producing that product falls.
➢ Causes a firm to change the location of their production facility to lower their operational costs. Then workers become unemployed in the area where the production facility once operated.
A welder who quits his job and tries to get a better welding job by moving
from Pittsburgh to Madison to is said to be:
A. underemployed.
B. frictionally unemployed.
C. cyclically unemployed.
D. structurally unemployed.
B. frictionally unemployed.
If a person loses her job because her abilities and skills are a poor match
with current requirements of employers, this person is considered
A) a discouraged worker.
B) frictionally unemployed.
C) structurally unemployed.
D) officially unemployed.
C) structurally unemployed.
A forestry worker who is out of work because of the temporarily low
demand for wood products associated with a recession is defined as:
A. naturally unemployed.
B. underemployed.
C. frictionally unemployed.
D. cyclically unemployed.
D. cyclically unemployed
How does an influx of young workers tend to increase both frictional and structural unemployment, leading to a rise in the natural rate of unemployment, at least in the short term.
➢Higher Frictional Unemployment: Young workers entering the labor force often spend more time searching for their first jobs or transitioning between jobs.
➢Higher Structural Unemployment: If young workers lack the skills or experience required for available jobs, they may struggle to find employment, contributing to structural unemployment.
If a nation’s labor force receives a significant influx of young workers:
A. B. C. D. frictional unemployment will likely decrease to zero.
the natural rate of unemployment is unlikely to change
the natural rate of unemployment is likely to decrease.
the natural rate of unemployment is likely to increase.
D. the natural rate of unemployment is likely to increase
Sarah, a recent college graduate with a degree in engineering. Despite her qualifications, the only job she can find is a part-time position at a retail store. Sarah is willing and able to work full-time in her field but has to settle for a job that neither uses her skills effectively nor provides her with enough hours. Officially, she is considered as ….. but actually she is ….
A) employed, out of the labor force
B) hidden employed, unemployed
C) employed, hidden unemployed
D) hidden employed, employed
C
What is inflation?
It is the sustained increase in the general price level of goods and services in an economy over a period of time.
