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Unemployment
This stack is a review of terms found in Chapter 14.
| Term | Definition |
|---|---|
| Unemployed | Persons 16 years or older that have actively searched for work in the last four weeks, but are not currently employed. |
| Employed | Persons who have worked at least one hour in the previous two weeks. |
| Labor Force | The number of employed people plus the number of unemployed people. |
| Unemployment Rate | A percentage of the labor force that is not currently employed. |
| Labor Force Participation Rate | The percentage of working age population classified as either employed or unemployed. |
| Employment-to-Population Ratio | The percentage of working age population that is classified as employed |
| Marginally Attached Workers | Persons not considered in the official unemployment rate. |
| Discouraged Workers | Persons that are unemployed in a general sense,but do not meet the technical definition. They are often products of Marginally Attached workers or part-timers. |
| U3 | The official Unemployment rate often distributed by BLS. |
| U1 | Only includes people unemployed 15 weeks or longer. |
| U2 | Only includes people who have lost a job as opposed to those who have quit or those who have entered or re-entered the Labor Force. |
| U4 | Includes/adds discouraged workers into the official unemployment rate. |
| U5 | Includes all Marginally attached workers. |
| U6 | The most all-inclusive of them all. It includes every type of worker or non-worker due to economic reasons. |
| Frictional Unemployment | It occurs when people voluntarily enter the labor force, or when they are between jobs for which they qualify. |
| Structural Unemployment | It occurs when job seekers' skill sets are not in demand because of geography or obsolescence. An outcome of creative destruction. |
| Creative Destruction | Occurs when old technology or industries die out, creating and freeing up resources for new technology and industries. |
| Cyclical Unemployment | Occurs because of contractions in the business cycle. |
| Full Employment | Occurs when cyclical unemployment is not present in the economy. This is economic nirvana and the goal that policymakers should seek to maintain. |
| Natural Rate of Unemployment | This is the natural rate hypothesis, which suggests that in the long run there is a level of unemployment that the economy maintains independent of the inflation rate. |
| Efficiency Wages | Those that exceed the equilibrium market wage |
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