MGEA06H3 Lecture Notes - Lecture 2: Labour Force Survey, National Research Universal Reactor, Employment-To-Population Ratio
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pter 8 –
ment and I
O utl i
What is the unemployment rate? How the unemployment rate is calculated?
The significance of the unemployment rate.
What is the natural rate of unemployment (NRU)? What are the factors that
determine the NRU?
What is inflation?
The costs of inflation.
Who gains and who loses as a result of inflation?
MGEA06 – Week 2 Iris Au
The Un e
nt R a
Defining and Measuring Unemployment
Statistics Canada carries out a monthly survey called the Labour Force
Survey by interviewing a random sample of 56000 households across
It classifies the adult population (age 15 or above) into 3 groups:
1) Employed (E): those who get a paid job (either full time or part time).
2) Unemployed (U): those who are currently available for work; but do not
have a job; and have been actively looking for a job during the past four
3) Not in the labour force (NILF): those who do not have a job and are not
looking for one.
Once we classify our adult population in these 3 groups, we can calculate the
Labour force (LF) = # of employed + # of unemployed.
The labour-force participation rate (LFPR) = the percentage of adult
population that is in the labour force:
Labour -force participation rate (Adult Population / Labour force) x 100
Unemployment rate (ur) = the percentage of the labour force that is
Unemployment rate (# of unemployed/ labour force) x 100%
Employment rate (er) = the percentage of adult population that is
employment rate (# of employed/ adult population) x 100%
*** Note: Employment rate is N O T equal to 1 – the unemployment rate.