ECON 20B Lecture 1: Unemployment_notes
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ECON 20B Full Course Notes
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Main idea: in the theory of long-run growth: Measuring unemployment: bureau of labor statistics (bls) conducts current population survey (cps) of 60,000 individuals, survey puts each into 1 of 3 bins: Employed: includes self-employed, family business, part-time, vacation or temporarily not working. Unemployed: not working who looked in previous 4 weeks. Not in labor force: everyone else includes student, retiree, homemaker, discouraged worker. Labor force=total # of workers = # employed + #unemployed. De nition 2. unemployment rate= # unemployed labor force 100. Natural rate of unemployment is the normal rate of unemployment around which the unemployment uctuates. De nition 5. cyclical unemployment is the deviation of the unemployment rate from its natural rate. Problems with measuring unemployment: discouraged workers, part-time for economic reasons, duration of unemployment. Encourages unemployment: minimum wages/unions, frictional unemployment, minimum wages/unions, ef ciency wages: rms choose to pay above the equilibrium wage, health: higher income better health higher productivity. (em- ployer provided health insurance)