ECN 204 Lecture Notes - Structural Unemployment, Unemployment Benefits, Efficiency Wage

38 views3 pages
25 Apr 2012
School
Department
Course
Professor

Chapter 9 Unemployment and its Natural Rate
Natural Rate of unemployment: refers to the amount of unemployment that the economy normal
experiences
Cyclical Unemployment: refers to the year to year fluctuations in unemployment around its natural rate,
and it is closely associated with the short run ups and down of economic activity
How is Unemployment Measured?
-Statistic Canada job to produce data on unemployment each month; surveys each adult from 15 and
older and categorizes them into three categories: employed, unemployed, not in labor force.
-Person is considered employed if working at a paid job. Person is unemployed if she is on temporary
layoff or is looking for a job. Person who fits neither such as homemaker, retiree, or student is not in the
labor force.
Labor Force: the total number of workers, including both the employed and the unemployed
Calculation:
Labor Force = Number of employed + Number of unemployed
Unemployment Rate (“u-rate”): the percentage of the labor force that is unemployed
Calculation:
Unemployment Rate = Number of unemployed/Labor Force x 100
Labor Force Participation: the percentage of the adult population that is in the labor force
Calculation:
Labor-Force Participation Rate = Labor Force/Adult Population x 100
Activity 1:
Question: Compute the labor force, the unemployment rate, the adult population, and the labor force
participation
Labor Force: 17 180 + 9062 = 18 673 thousand
Unemployment Rate: 100 x 1493/18673 = 8%
Population: 18673 + 9062 = 27 735
Labor Force Participation: 100 x 18673/27735 = 67.3%
Unlock document

This preview shows page 1 of the document.
Unlock all 3 pages and 3 million more documents.

Get access

\$10 USD/m
Billed \$120 USD annually
Homework Help
Class Notes
Textbook Notes