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Chapter 14
Unemployment
| Term | Definition |
|---|---|
| unemployed | what you're considered if you have looked for a job in the last four weeks and are not employed |
| employed | those who have worked for at least an hour in the last two weeks |
| labor force | number of employed persons plus the number of unemployed persons |
| unemployment rate | percentage of the labor force that is not employed |
| 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 | people who are ready to work; have conducted a job search within the last twelve months, but not the past four weeks |
| discouraged workers | people who have given up searching for a job |
| U3 | the official unemployment rate published by the BLS |
| U1 | the unemployment rate that only includes people unemployed fifteen weeks or longer, as published by the BSL |
| 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 BSL |
| U4 | the unemployment rate that adds discouraged workers to the official unemployment rate, as published by the BSL |
| U5 | the unemployment rate that includes all marginally attached workers, as published by the BSL |
| U6 | the most all-inclusive measure of unemployment as published by the BSL; includes all those listed in U1-U5 plus those who are employed part time because of economis reason |
| frictional unemployment | voluntary unemployment that occurs when a person enters the labor force and looks for a job |
| 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 seeker's skill sets, and government programs tht create incentives to remain unemployed |
| creative destruction | as innovation occurs, which frees up the resources for the new technology and its industry |
| efficiency wages | those that exceed the equilibrium market wage |
| cyclical unemployment | occurs because of of contraction in the business cycle |
| full employment | occurs when cyclical unemployment is not present in the economy |
| natural rate of unemployment | the rate that exists when there is no cyclical unemployment in the economy |
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