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ECON 20B (45)
Chapter 28

Ch. 28 Unemployment.docx

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University of California - Irvine
Mu- Chun Chen

Ch. 28 Unemployment I. Identifying unemployment A. How is unemployment measured? - data on types of employment, length ave. work week, duration unemployed - more weeks = more GDP + higher standard of living - cyclical unemployment: year to year fluctuations in unemployment around its natural rate - each adult placed into 1 of 3 categories  employed unemployed not in labor force - labor force: total # of workers, including both employed and unemployed - unemployment rate: percentage of labor force that’s unemployed - labor-force participation rate: percentage of adult population that is in labor force - natural rate of unemployment: normal rate of unemployment around hih the unemply9ment rate fluctuates - cyclical unemployment: deviation of unemployment from its natural rate B. Does the unemployment rate measure what we want it to? - discouraged workers: individuals who would like to work but have given up looking for job - best to view official unemployment rate as a useful but imperfect measure of joblessness C. How long are the unemployed without work? - most spells of unemployment are short, and most unemployment observed at any given time is long term - economists and policymakers must be careful when interpreting data on unemployment D. Why are there always some people unemployed? - frictional unemployment: unemployment that results because it takes time for workers to search for jobs that best suit their tastes and skills - structural unempl
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