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Chp 14 Unenployment
Chapter 14 of Economics class
| Term | Definition |
|---|---|
| unemployment rate | The unemployment rate is equal to the number of unemployed persons divided by the number of people in the labor force. |
| labor force participation rate | The labor force divided by the working age population. |
| employment to population ratio | the number of employed people divided by the working age population. |
| Marginally attached workers | These are people ready and available to work who have conducted a job search within the past twelve months but have not searched in the last four weeks and are therefore not included in official unemployment statistics. |
| U1 | The unemployment rate that only includes people unemployed fifteen weeks or longer, as published by BLS |
| U2 | The unemployment rate that 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, as published by the BLS |
| U3 | The official unemployment rate published by BLS |
| U4 | The unemployment rate that adds discouraged workers to the official unemployment rate, as published by the BLS |
| U5 | The unemployment rate that includes all marginally attached workers, as published by the BLS |
| U6 | The most all-inclusive measure of unemployment as published by the BLS. Includes all those listed in U1-U5 plus those who are employed part time because of economic reasons. |
| Frictional unemployment | Voluntary unemployment that occurs when a person enters the labor force and looks for a job. A recent graduate looking for her first job out of college would be considered frictionally unemployed. Frictional unemployment always exists in an economy. |
| Structural unemployment | Unemployment that is caused by the permanent destruction of jobs in a dying industry, a mismatch between the skills necessary for employment and the seekers' skill sets, and government programs that create incentives to remain unemployed. |
| creative destruction | A term coined by the economist Joseph Schumpeter that refers to the ongoing process of technological innovation and industrial decline. As one industry is being born, another industry is dying. |
| Efficiency wages | A wage the exceeds the market wage. efficiency wages encourage worker productivity but also play a role in creating unemployment. |
| Cyclical unemployment | Unemployment associated with downturns in the business cycle. Most economists view cyclical unemployment as harmful and believe that government intervention is necessary to prevent it fro occurring. |
| Full employment | The level of employment that exists when the economy is being productively efficient. Full employment is associated with an economy at the natural rate of unemployment. |
| natural rate of unemployment | The rate of unemployment that exists when there is no cyclical unemployment present in the economy. The natural rate of unemployment is thought to be independent of the inflation rate. |
| unemployed | The condition of not having a job but being a member of the labor force. To be considered unemployed, a person must be jobless yer actively searching for a job by having searched in the last four weeks. |
| employed | The condition of having a job. |
| labor force | The number of employed plus unemployed people age sixteen and over. |
Created by:
DanielCardenas
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