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Lecture 9

# ECO 1102 Lecture Notes - Lecture 9: Labour Force Survey, Unemployment Benefits, Uric Acid

Department
Economics
Course Code
ECO 1102
Professor
Octavian Strimbu
Lecture
9

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ECO1102, CHAPTER 9: UNEMPLOYMENT AND ITS NATURAL RATE
The problem of unemployment is usually divided into two categories:
oThe long-run problem
oThe short-run problem
The economy’s natural rate of unemployment refers to the amount of unemployment the
economy normally experiences.
Cyclical unemployment refers to the year-to-year fluctuations in unemployment around
the natural rate.
Identifying Unemployment
How is unemployment measured?
What problems arise in interpreting the unemployment data?
How long does the typical spell of unemployment lasts?
Why will there always be unemployed people?
How Is Unemployment Measured?
Every month, Statistics Canada (SC) conducts the Labour Force Survey (LFS).
Data are collected on:
oUnemployment
oEmployment
oLength of workweek
oDuration of unemployment
From the results of the survey, each adult (aged 15 and older) from the survey is either:
oemployed (spent some time in the previous week working at a paid job)
ounemployed (on temporary layoff or is looking for work)
onot in the labour force (none of the above, e.g., full-time student, a retiree,
homemaker)
FIGURE 9.1: The Breakdown of the Population in 2011

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How Is Unemployment Measured?
Once the surveyed individuals are categorized, then SC will compute various statistics.
Labour force: the total number of workers, including both the employed and the
unemployed
Unemployment rate: the percentage of the labour force that is unemployed
Labour force participation rate: he percentage of the adult population that is in the labour
force
Active Learning: Calculate Labour Force Statistics
Compute the labour force, u-rate, adult population, and labour force participation rate using this
data: