ECON102 Lecture Notes - Lecture 2: Frictional Unemployment, Full Employment, Human Capital

• School: University of Waterloo
• Department: Economics
• Course: ECON102
• Professor: Mergo Teferi

Document Summary

Unemployment results in lost income and production and lost human capital. The loss of income is devastating for those who bear it even ei cannot make up for it. Prolonged unemployment is the most costly form of unemployment as it permanently damages a person"s job prospects by destroying human capital. Short-term unemployment is generally okay we are mostly concerned with the duration of unemployment. For those under 25, short-term employment is high and fluctuates more strongly, and vice versa for those over 25. How is it calculated each month conducts a survey of 54,000 households, and cuts them into. Working-age population number of people aged 15 years or older. Non-working population does not meet those specifications. Working-age population divided into two groups - people in labour force or not in labour force. Labour force is the sum of employed and unemployed workers. These persons must be paid to be in the labour force.