ECON-2000 Lecture Notes - Lecture 27: Unintended Consequences, Unemployment Benefits, Full Employment
Document Summary
Unemployed workers: adults who do not have a job, but are looking for one. Unemployment rate: percent of lab force with a job (unemployed/labor force) Certain industries are hit hard, like housing. How its measured: if you"re not looking for a job, you"re not part of the labor force. When gdp falls, firms lay off workers, increasing unemployment. Workers must retrain, reeducate, relocate, or change their expectation about work and pay. Government can help with training programs or relocation subsidies. Frictional: caused by time delays in matching available jobs and workers, people don"t take new jobs instantly. Government regulations that can make it difficult to hire/fire. Unemployment insurance: benefits the worker by reducing consequences of being laid off and provides time to find a new job. Helps macroeconomics by stopping economic problems from spreading to other industries. Unintended consequence: reduces incentives to quickly find another job. Cyclical: caused by economic downturns, the worst type, occurs for unknown length of time.
