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Unemployment Vocab
Economics Unemployment Vocab
| Term | Definition |
|---|---|
| Unemployed | Persons age 16 and older who have actively searched for a job in the last four weeks but are not currently employed |
| Employed | Have worked at least one hour in the last two weeks |
| Labor Force Participation Rate | Percentage of the working age population classified as either employed or unemployed |
| Employment-to-Population Ratio | Percentage of the working age population that is classified as employed |
| Marginally Attached Workers | Not considered in the unemployment rate; Have searched for work in the past twelve months but not the last four weeks |
| "Discouraged Workers" | Given up on the job search; not included in the unemployment rate |
| U3 | The official unemployment rate |
| U1 | Only includes people unemployed for fifteen weeks or longer |
| U2 | Only people who have lost a job as opposed to quitting or entering/re-entering the labor force |
| U4 | Adds discouraged workers to the official rate |
| U5 | Includes marginally attached workers |
| U6 | The most inclusive; Included all of the other rates and part time workers |
| Frictional Unemployment | Occurs when people voluntarily enter the labor force or when b/w jobs they are qualified for |
| Structural Unemployment | When job seekers' skill sets are no in demand because of geography or obsolescence |
| Creative Destruction | An innovation occurs, old technologies and industries are destroyed, which frees up the resources for the new technology and its industry |
| Efficiency Wages | Those that exceed the equilibrium market wages; purpose is to encourage the worker productivity |
| Cyclical Unemployment | Occurs because of contractions in the business cycle; not voluntary; creates a feedback loop |
| Full Employment | Occurs when cyclical unemployment is not present in the economy; associated with the natural rate of unemployment |
| Labor Force | The number of employed persons plus the number of unemployed persons |
| Natural Rate of Unemployment | The rate of unemployment that exists when there is no cyclical unemployment present in the economy; thought to be independent of the of the inflation rate |
| Unemployment Rate | The percentage of the labor force that is not currently employed |
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haileyfink
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