The Unemployment Rate
If I am a stay at home parent not looking for work, I am not part of the ____________ .
Labor Force
If I find a job by putting my resume/CV on LinkedIn, allowing potential employers to see my skills and work experience, I am using technology to overcome this type of unemployment.
frictional unemployment
In Europe we see more generous unemployment benefits, relative to the U.S. The cost of this is more _______ _____________.
Structural unemployment
Labor Force Participation Rate = (? + ?)/ ?
(Unemployed + Employed) / Adult Population
A policy that encourages young individuals to remain full time students ____________ labor force participation.
reduces
The unemployment rate is the number of unemployed individuals divided by the ___________, which is the number of ___________ individuals + number of ___________ individuals.
Labor Force; Employed + Unemployed
The shortest term unemployment that is cause by imperfect information, causing difficulties of matching an employee to an employer.
frictional unemployment
Employment protection laws and generous unemployment benefits serve to benefit those who are _____________, with the unseen cost of hurting the __________ .
employed, unemployed.
Three factors that determine the labor force participation rate.
Life cycle effects; demographics; Incentives
Increasing the minimum wage __________ quantity demand for labor, while it ____________ quantity supplied.
decreases; increases
If the adult population is 1,000,000 individuals, the number of employed individuals is 500,000, and the number of unemployed individuals in 50,000, my unemployment rate is ________%.
(50,000 / 550,000) X 100 = 9%
Persistent long-term unemployment caused by long-lasting shocks or permanent features of an economy that make it more difficult for some workers to find jobs.
Structural Unemployment
Unemployment benefits, employment protection laws, minimum wage requirements, and union contracts __________ the risk of hiring a new worker.
increase
As the baby boomer generation reaches retirement, the labor force participation rate will _______.
fall
Job retraining, job-search assistance, work tests, and early employment bonuses are all examples of _______ _______ __________ _________.
Active Labor Market Policies
If the working age adult population is 1,000,000 individuals, the number of employed individuals is 500,000, and the number of unemployed individuals in 50,000, my labor force participation rate is ________%.
(550,000 / 1,000,000) x 100 = 55%
In the early 1800s textile artisans had disdain for mechanical looms. Their fear was that technological innovation would cause __________ unemployment. Joseph Schumpeter would call this __________ __________.
structural; creative destruction.
The employment at will doctrine and active labor market policies make labor markets more __________. In other words, unemployed individuals will have an easier time finding another job.
dynamic
Policies that do not allow retirement age individuals to work and receive their pension payments _________ the incentive to participate in the labor force.
reduces
When Real GDP growth is positive we can expect the unemployment rate to _________.
fall
The unemployment rate does not account for _________ workers and ___________.
discouraged; underemployment
Unemployment correlated with the business cycle.
Cyclical unemployment
Long-term unemployment tends to ___________ as the rigidity of employment regulation increases.
increase
Policies that push older individuals into retirement imposes a cost on ____________ workers. They now have to pay ________ taxes, since older individuals are not contributing to GDP.
younger; higher
structural + frictional
natural rate of unemployment