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Lecture 3

ECON 1010 Lecture Notes - Lecture 3: Human Capital, Business Cycle, Frictional Unemployment


Department
Economics
Course Code
ECON 1010
Professor
Yong Troy
Lecture
3

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ECON1010- Lecture #3- Chapter 21
ECON1010- Lecture #3- Chapter 21: Monitoring Jobs and Inflation (Part 1)
Why Unemployment Is a Problem
Unemployment results in
oLost incomes and production
oLost human capital
The loss of income is devastating for those who bear it. Unemployment benefits create a
safety net but don’t fully replace lost wages, and not everyone receives benefits.
Labor Force Survey
Every month, Statistics Canada conducts a Labor Force Survey in which it asks 54,000
households.
The population is divided into two groups:
o The working-age population—the total number of people aged 15 years and
over
oPeople too young to work (under 15 years of age)
The working-age population is divided into two groups:
oPeople in the labor force
oPeople not in the labor force
The labor force is the sum of employed and unemployed workers.
To be counted as unemployed, a person must be in one of the following three
categories:
o On temporary layoff with an expectation of recall
o Without work but has made specific efforts to find a job within the previous four
weeks
oHas a new job to start within four weeks
Four Labor Market Indicators
The unemployment rate
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