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Unemployment
Unemployment definitions
| Term | Definition |
|---|---|
| Unemployed | people 16 or older who have actively searched for work in the last four weeks but are not currently employed |
| Employed | those who have worked at least one hour in the previous two weeks |
| Labor force | the number of employed plus the number of unemployed persons |
| Unemployment rate | a percentage of the labor force that is not currently employed |
| Labor force participation rate | the percentage of the working age population classified as either employed or unemployed. (about 65% in the U.S.) |
| Employment-to-population ratio | the percentage of the working age population that is classified as employed |
| Marginal attached workers | not considered in the official unemployment rate; these are people ready and available to work, who have conducted a job search in the last four weeks. |
| Discouraged workers | person of legal employment age of who is not actively seeking a job or who does not find employment after long-term unemployment |
| U3 | measures those who fall between the cracks of the official rate |
| U1 | only includes people unemployed 15 weeks or longer |
| U2 | only includes those who have lost a job |
| U4 | adds discouraged workers to the official unemployment rate |
| U5 | includes all marginally attached workers |
| U6 | the most all-inclusive measure of unemployment; all of the above plus all those part-timers for economic reasons |
| Frictional Unemployment | occurs when people voluntarily enter the labor force, or when they are between jobs for which they qualify; It is frictional because the labor market does not automatically match up all available jobs with all available workers |
| Structural Unemployment | occurs when job seekers' skill sets are not in demand because of geography or obsolescence; a solution for structural unemployment is educating and retraining |
| Creative destruction | the outcome of structural unemployment |
| Efficiency wages | those that exceed the equilibrium market wage. Its purpose is to encourage worker productivity |
| Cyclical Unemployment | occurs because of contractions in the business cycle; creates a feedback loop |
| Full Employment | occurs when cyclical unemployment is not present in the economy |
| Natural Rate of Unemployment | exists when there is no cyclical unemployment present in the economy; thought to be independent of inflation |
Created by:
grodriguez15
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