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Types of Unemployment
Frictional UnemploymentStructural UnemploymentCyclical Unemployment
Quick Practice
Lets add Seasonal Unemployment
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Natural Rate of Unemployment
Frictional U + Structural U = NRU = 5% U = FE
Cyclical U is Macroeconomic Unemployment
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Who are the Unemployed?
It’s a long story…Start with the total population of the US:
Subtract those under 16Subtract those in the Armed Forces and
"institutionalized"
This gives you the “Non Institutional Adult Civilian Population”
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Who are the Unemployed cont.
From Non-Institutional Adults…Subtract those already retired and the
“homemakers”Subtract full time students over the age of 16Subtract the "discouraged" (those not looking)
This leaves the “Civilian Labor Force”
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Who are the Unemployed cont.
From the Civilian Labor Force…Subtract Full time employeesSubtract Part time workers (15-39 hr/wk)Subtract unpaid family business workers
(family)Subtract anyone on sick leave, strike, or
vacation
This leaves you with the “Employed Population”
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Who are the Unemployed? cont.
Everyone else…
They must be either looking for a job and not finding one, or in between jobs/changing careers
NOTE: People who would like work but have given up looking for a job ar “Discouraged workers” and DO NOT count toward the official unemployment rate.
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Other things to know…
Labor-Force Participation RateLabor productivity vs. Efficient use of
laborHuman capital
The knowledge, skills, training, etc… that make a person productive. any other measure of quantity of labor.
It is not the civilian labor force or any measure of the Quantity of Labor