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# Unemployment (1)

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### Unemployment (1)

1. 1. Unemployment and Its Natural Rate
2. 2. How Is Unemployment Measured? – The working-age population is divided into two groups: – 1. People in the labor force – 2. People not in the labor force – The labor force is the sum of employed and unemployed workers
3. 3. – To be counted as unemployed, a person must be in one of the following three categories: – 1. Without work but has made specific efforts to find a job within the previous four weeks – 2. Waiting to be called back to a job from which he or she has been laid off – 3. Waiting to start a new job within 30 days
4. 4. • Three Labor Market Indicators The unemployment rate  The employment-to-population ratio  The labor force participation rate 
5. 5. How Is Unemployment Measured? • The labor-force participation rate is the percentage of the adult population that is in the labor force. – Labor-force Participation Rate= (Labor Force/Adult Population)*100 • The unemployment rate is calculated as the percentage of the labor force that is unemployed. – Unemployment Rate= (Unemployed/Labor Force)*100 The employment ratio is the employed fraction of the adult population – employment ratio= (employed/adult population)
6. 6. Employed, Unemployed, Not in the Labor Force, Labor Force • Employed: A person is considered employed if he or she has spent most of the previous week working at a paid job. • Unemployed: A person is unemployed if he or she is on temporary layoff, is looking for a job, or is waiting for the start date of a new job. • Not in the Labor Force: A person who fits neither of these categories, such as a full-time student, homemaker, or retiree, is not in the labor force. • Labor Force – The labor force is the total number of workers and the BLS defines the it as the sum of the employed and the unemployed.