Working Age Population: people over 15, those in the labour force + those not in the labour force
The Labour Force: those employed + those unemployed
Employed: full time + part time
Part time: Voluntary + Involuntary
Involuntary: means they have part time job, but can’t get a full time job
Who is Unemployed:
1. Without work, but actually looking for work within the previous 4 weeks
2. Waiting to be called back to a job from which they had been laid off
3. Waiting to start a new job within 4 weeks
The unemployment rate: (Number of people unemployed/Labour Force) x 100
Types of Unemployment:
1. Frictional Unemployment arises from normal labour market turnover – from people entering
and leaving the labour force and the ongoing creation and destruction of jobs. – It is permanent
and healthy phenomenon in a growing economy
2. Structural Unemployment arises when changes in technology, international competition, or
location change the skills needed to perform jobs.
3. Seasonal Unemployment arises because the number of jobs available has changed because of
Full employment exists when the unemployment rate equals the natural rate of unemployment
The natural rate of unemployment is the unemployment rate less cyclical unemployment.
Why is unemployment at full employment “natural”?
- The economy undergoes constant change.
Some facts about NRU: