Lecture # Chapter 9
Unemployment and its Natural Rate
Statistics Canada divides the non-institutional (non-military) adult population (15+) into three
• Not in the labour force.
Unemployment Rate = # of unemployed/labour force X 100
LFPR = Labour Force/Adult Population X 100
Employment Rate = #Employed/Adult Population X 100
The figures provided by Statistics Canada might not reflect reality because:
• Discouraged Workers
o People who would like to have a job but have been discouraged in their searches.
They did not look for a job so they would count as not in the labour force
although they would love to have a job.
o People who are working less hours then they would like.
o People who are working not up to their professionally trained skill level.
There are three types of unemployment
• Frictional Unemployment
o Job search times
o Sectoral shifts. When some sectors are on the rise and some are on the decline.
o Seasonal • Structural Unemployment
o Quantity of labour demanded is less than the quantity of labour supplied.
o Could be caused by Minimum wage laws in economic theory
o There is a diff