Unemployment

Ms Ross Spring 2009

Labor Force

The labor force includes all persons over age sixteen who are either working for pay or actively seeking paid employment.

People who are not employed or are not actively seeking work are not considered part of the labor force.

Unemployment

To make full use of available production capacity, the labor force must be fully employed.

Unemployment is the inability of labor-force participants to find jobs.

Measuring Unemployment

U.S. Census Bureau surveys about 60,000 households a month to determine how many people are actually unemployed.

A person is considered unemployed if he or she is not employed and is actively seeking a job.

Four Types of Unemployment

Seasonal unemployment is the unemployment due to seasonal changes in employment or labor supply.

At the end of each season, thousands of workers must go searching for new jobs, experiencing seasonal unemployment in the process.

Four Types of Unemployment

Frictional unemployment is the brief periods of unemployment experienced by people moving between jobs or into the labor market.

Four Types of Unemployment

Structural unemployment is the unemployment caused by a mismatch between the skills (or location) of job seekers and the requirements (or location) of available jobs.

Four Types of Unemployment

Cyclical unemployment is the unemployment attributable to the lack of job vacancies – i.e., to an inadequate level of output (Real GDP)