Is unemployment necessarily bad?
- assuming closed economy
(Unemployment is calculated by) Statistics Canada divides the non-institutional
(excluded people in prison, people in long term residential care facility, military)
adult population into three mutually exclusive categories (cant be in more than one
2. unemployed (looking for work but not working; temporary laid off)
3. not in labour force (not looking for work) (stay at home parents;
students; senior citizens)
- adult population = 15+
Do these figure reflect reality?
1. Discouraged workers
Someone who is unemployed and gets so discouraged about being
unemployed and stop looking for work
In the not in the labour force category
People who are working part time but want to work full time
Included in employed
People working at jobs that are below their skill level Included in employed
Survey over the phone could be lying; trying to collect government benefits, etc
Why is there unemployment?
There are three types of unemployment:
1. Frictional unemployment
Job search actually good for the economy; takes people a
while to get a job, takes firms a while to get a employee
likely to get a