Understanding Unemployment

Explain why unemployment is a problem and how we measure the unemployment rate and other labor market indicators

Explain why unemployment occurs and why it is present even at full employment

What kind of job market will you enter when you graduate?

What are the three categories to be counted as unemployed?

What is the unemployment rate?

• The percentage of the labor force that is unemployed

• The percentage of the working-age population that is unemployed

• The total number of unemployed people in the economy

What is the employment-to-population ratio?

• The percentage of the working-age population who have jobs

• The percentage of the labor force that is employed

• The total number of employed people in the economy

What is the labor force participation rate?

• The percentage of the working-age population who are members of the labor force

• The percentage of the labor force that is unemployed

• The total number of people in the labor force

What are the types of unemployment?

• Frictional, Structural, Cyclical, Seasonal

• Temporary, Permanent, Seasonal, Frictional

• Cyclical, Structural, Long-term, Short-term

What is natural unemployment?

• Unemployment that arises from frictions and structural change

• Unemployment that occurs during economic recessions

• Unemployment that is caused by seasonal job changes

What are the effects of unemployment?