ECON 103 Lecture Notes - Lecture 8: Ronald Coase, Frictional Unemployment, Cherry Picking
27 Sep 2016
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Document Summary
Discouraged workers not counted in labor force because not looking for work. Unemployment that results from the process of matching workers and jobs. Contributes to u3 hovering above zero in good times. Number of jobs may not satisfy job seekers. Ex. after housing bubble collapsed around 2008, many construction workers could not find jobs. For a long-term example, we may be observing many low-skill factory-type factory-type jobs being lost and workers who have left the labor force after becoming discouraged. Fewer free trade deals that cause large sectoral shifts. Allow the market to arrive at an equilibrium wage. Based on full employment which refers to the natural rate of unemployment, which is a combination of frictional and structural unemployment persisting when labor and resource markets are at equilibrium. Multiple factors can determine and change this rate over time. Job matching technologies like linkedin and monster. comas well as staffing firms can shrink both structural and frictional unemployment.
