ECON102 Lecture Notes - Lecture 3: Real Wages, Unemployment, Potential Output

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25 Aug 2016
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Lost income and production: unemployment benefits create safety net , but don’t fully replace lost earnings.
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Lost human capital : damages persons prospects by destroying human capital and lowers standard of living.
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In Canada, we have unemployment benefits create a safety net but don’t replace lost wages and not everyone
receives wages.
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Working age population are the no. of people ages 15 years and older who are not in institutional
care ( jail, mental hospital).
People too young to work ( under 15 years of age) or in institutional care.
By the labor force survey conducted by Canada Statistics. It askes 54,000 households.
Working age population is divided in to labor force and no-labor force. Labor force is divided into
employed and unemployed.
Employed : you must have a full-time/part-time job and have a paid position. Not volunteers.
no job but made efforts to find a job within the previous 4 weeks
waiting to be called back by which he /she has been laid off
waiting to start a job in four weeks.
Unemployed :
Persons younger than 15 years old,
Persons residing in the Yukon, the Northwest territories, Nunavut, and aboriginal settlements,
Full-time members of the armed forces. Because the target population is civilians only.
Inmates in institutions.
The labor force survey deliberately excludes individuals in all of the following categories:
(# of people unemployed / labor force) * 100
Homeless people are not captured
We estimate between 6-8% of labor force will be unemployed overtime.
The unemployment rate
(labor force/ working age population)*100
Working age population who are members of the labor force.
The labor force participation rate.
Labor market indicators
Marginally attached workers are discouraged searchers : neither working nor looking for
work
Retirees
Long-term future starts: with a job to start in more than four weeks
Involuntary part-timers
Is an imperfect measure because it excludes :
Other definitions of unemployment
Part-time workers who want full time jobs are employed.
Concerned with the duration of unemployment.
Most costly unemployment: is the long-term unemployment
Frictions unemployment : rises from normal labor market turnover. Flow in and out of
the labor force and the process of job creation and job destruction.
Structural employment : changes in technology and international competition
Unemployment can classified into three types
Measuring of unemployment :
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Unemployment :resource that is being wasted. That is sitting idle.
Ch21 : Monitoring jobs and inflation
Wednesday, January 6, 2016
3:54 AM
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