ECON 1010 Chapter Notes - Chapter 21: Unemployment Benefits, Real Wages, Business Cycle
24 Jul 2016
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Unemployment is a serious and social economic problem because of: lost incomes and production. Job losses are devastating for people that bear them and they make unemployment a frightening prospect for everyone. Unemployment benefits create a safety net but don"t fully replace lost earnings. Lost production = decrease in consumption, decrease in investment in capital, lowering the living standard in both the present and the future: lost human capital. Prolonged unemployment permanently damages a person"s job prospects by destroying human capital. The working age population is the total number of people aged 15 years and over, divided into: those in the labor force, those that aren"t in the labor force. To be counted in the survey as employed, a person must have either a full time or part time job. To be counted in the survey as unemployed, a person must be available to work and: On temporary lay off with an expectation of recall.
