The document summarizes key concepts related to business cycles, jobs, unemployment, and inflation measurement. It defines business cycles and recessions, explains how the unemployment rate, labor force participation rate, and employment-to-population ratio are calculated. It also describes how the Consumer Price Index is constructed and used to measure inflation. Charts and figures are included to illustrate trends in these economic indicators over time.
The document discusses several key concepts related to labor and employment:
1. Labor is a factor of production and refers to human effort and skills. Human capital refers to the economic value of people's skills and abilities.
2. Employment involves a contract between an employer and employee, where the employee provides labor in exchange for wages. Unemployment exists when able and willing workers cannot find jobs.
3. Other concepts discussed include the unemployment rate, NAIRU, Phillips curve, underemployment, and differences in perspectives on the causes of unemployment from various economic theories.
This document discusses different theories of unemployment, including:
1) It describes different types of unemployment including frictional, structural, and cyclical unemployment.
2) It explains the classical view that full employment is always achieved through flexible wages adjusting to clear the labor market.
3) It outlines Keynes' view that unemployment can persist if aggregate demand is insufficient, with the aggregate supply curve being horizontal in the short-run so that unemployment, not prices, adjust. Fiscal policy can be used to increase aggregate demand.
4) Wages are downwardly rigid in the short-run in the Keynesian model, so that real wages rise when prices fall during recessions even as nominal wages remain
The document discusses different types and causes of unemployment. It describes how the unemployment rate is calculated monthly by the Bureau of Labor Statistics. There are always some frictional unemployed workers due to the time needed to search for suitable jobs. Additional unemployment is caused by minimum wage laws which reduce the quantity of jobs available. Unions can also contribute to unemployment by negotiating above-market wages for their members. Some firms choose efficiency wages above market rates to improve worker productivity and retention.
This document discusses the nature and measurement of unemployment. It defines unemployment as people who are actively looking for work but are currently without a job. The unemployment rate is defined as the number of unemployed people expressed as a percentage of the labor force. There are inflows and outflows into and out of unemployment as people transition between jobs and leaving the labor force. Disequilibrium unemployment can occur when real wages are above the equilibrium level or due to a reduction in aggregate demand. There are also types of equilibrium unemployment including frictional unemployment from job searching and structural unemployment from changes in industry demand.
The document discusses different types and causes of unemployment. It defines the natural rate of unemployment as the minimum level that exists due to frictional unemployment from job searching, and cyclical unemployment which varies with economic cycles. Unemployment is measured monthly through surveys to determine employment, unemployment, and labor force rates. While most spells of unemployment are short, long-term unemployment accounts for most joblessness. Causes of unemployment include frictional job searching, structural shifts, minimum wages, unions, and efficiency wages paid by firms.
The document discusses different types of unemployment and how it is measured. It defines key terms like the labor force, employed, unemployed, and not in the labor force. Unemployment is calculated as the percentage of the labor force that is unemployed. There are three main types of unemployment: frictional from the time it takes to find a job match, structural from insufficient jobs in some markets, and cyclical from ups and downs in the business cycle around the natural rate of unemployment.
The document defines key terms and concepts related to unemployment statistics:
- The unemployment rate is calculated as the number of unemployed people divided by the labor force. It does not include discouraged workers who have given up looking for jobs.
- There are different types of unemployment including frictional from job transitions, structural from industry changes, and cyclical from economic fluctuations.
- Frictional and structural unemployment comprise the natural rate of unemployment, which no economy can reach zero percent.
- Other important metrics include the labor force participation rate, short vs long-term unemployment, and the dependency ratio.
- Unemployment is measured through labor force surveys and claimant counts, but numbers can vary and not all people
At an event in Westminster chaired by new RF Executive Chair David Willetts, the Resolution Foundation presented early findings from its major new investigation into full employment. A panel of leading experts offered their take on the issue, followed by a Q&A.
The document discusses several key concepts related to labor and employment:
1. Labor is a factor of production and refers to human effort and skills. Human capital refers to the economic value of people's skills and abilities.
2. Employment involves a contract between an employer and employee, where the employee provides labor in exchange for wages. Unemployment exists when able and willing workers cannot find jobs.
3. Other concepts discussed include the unemployment rate, NAIRU, Phillips curve, underemployment, and differences in perspectives on the causes of unemployment from various economic theories.
This document discusses different theories of unemployment, including:
1) It describes different types of unemployment including frictional, structural, and cyclical unemployment.
2) It explains the classical view that full employment is always achieved through flexible wages adjusting to clear the labor market.
3) It outlines Keynes' view that unemployment can persist if aggregate demand is insufficient, with the aggregate supply curve being horizontal in the short-run so that unemployment, not prices, adjust. Fiscal policy can be used to increase aggregate demand.
4) Wages are downwardly rigid in the short-run in the Keynesian model, so that real wages rise when prices fall during recessions even as nominal wages remain
The document discusses different types and causes of unemployment. It describes how the unemployment rate is calculated monthly by the Bureau of Labor Statistics. There are always some frictional unemployed workers due to the time needed to search for suitable jobs. Additional unemployment is caused by minimum wage laws which reduce the quantity of jobs available. Unions can also contribute to unemployment by negotiating above-market wages for their members. Some firms choose efficiency wages above market rates to improve worker productivity and retention.
This document discusses the nature and measurement of unemployment. It defines unemployment as people who are actively looking for work but are currently without a job. The unemployment rate is defined as the number of unemployed people expressed as a percentage of the labor force. There are inflows and outflows into and out of unemployment as people transition between jobs and leaving the labor force. Disequilibrium unemployment can occur when real wages are above the equilibrium level or due to a reduction in aggregate demand. There are also types of equilibrium unemployment including frictional unemployment from job searching and structural unemployment from changes in industry demand.
The document discusses different types and causes of unemployment. It defines the natural rate of unemployment as the minimum level that exists due to frictional unemployment from job searching, and cyclical unemployment which varies with economic cycles. Unemployment is measured monthly through surveys to determine employment, unemployment, and labor force rates. While most spells of unemployment are short, long-term unemployment accounts for most joblessness. Causes of unemployment include frictional job searching, structural shifts, minimum wages, unions, and efficiency wages paid by firms.
The document discusses different types of unemployment and how it is measured. It defines key terms like the labor force, employed, unemployed, and not in the labor force. Unemployment is calculated as the percentage of the labor force that is unemployed. There are three main types of unemployment: frictional from the time it takes to find a job match, structural from insufficient jobs in some markets, and cyclical from ups and downs in the business cycle around the natural rate of unemployment.
The document defines key terms and concepts related to unemployment statistics:
- The unemployment rate is calculated as the number of unemployed people divided by the labor force. It does not include discouraged workers who have given up looking for jobs.
- There are different types of unemployment including frictional from job transitions, structural from industry changes, and cyclical from economic fluctuations.
- Frictional and structural unemployment comprise the natural rate of unemployment, which no economy can reach zero percent.
- Other important metrics include the labor force participation rate, short vs long-term unemployment, and the dependency ratio.
- Unemployment is measured through labor force surveys and claimant counts, but numbers can vary and not all people
At an event in Westminster chaired by new RF Executive Chair David Willetts, the Resolution Foundation presented early findings from its major new investigation into full employment. A panel of leading experts offered their take on the issue, followed by a Q&A.
This document discusses challenges women face when re-entering the workforce after taking time off for family reasons. It covers the topic from multiple perspectives, including the woman's perspective on career continuity, the project manager perspective on project continuity, and economics of diversity in the workplace. The document also presents 5 case studies of women in different situations dealing with re-entering the workforce. It concludes with lessons for working women and project managers, such as resetting expectations, re-skilling, flexibility, matching demand and supply, and leveraging loyalty. The overall message is that facilitating women's re-entry into the workforce has social and economic benefits but also presents challenges that require consideration from multiple viewpoints.
This document provides an outline and overview of key labor market concepts for a university presentation on unemployment and the labor market. It defines important terms like employment, unemployment, labor force participation and different types of unemployment. It also discusses broader measures of unemployment, trends in long-term unemployment in Ireland, and concepts of structural and cyclical unemployment as well as the economic definition of "full employment".
This document discusses different types of labor including manual labor, clerical work, professional work, management, entrepreneurship, and inventions. It defines labor as a factor of production and discusses how households allocate time between market and nonmarket activities based on returns. The quantity of labor supplied is determined by wage rates and availability of leisure and nonmarket opportunities. Issues in the labor market include unemployment, inadequate wages, and economic insecurities.
There are several types of unemployment defined by their causes. Cyclical unemployment results from downturns in demand, while structural unemployment occurs when industries decline due to long-term market changes. Regional unemployment is structural unemployment that affects local areas. Other types include frictional unemployment during job transitions, seasonal unemployment in industries that operate seasonally, and classical unemployment which was formerly blamed on overly high wages. The natural rate of unemployment includes types that exist even in equilibrium markets. Labour immobility contributes to structural unemployment by preventing workers from moving between declining and growing industries.
The document defines unemployment and discusses its various types, including demand deficient unemployment, structural unemployment, voluntary unemployment, and frictional unemployment. It then outlines major causes of unemployment in India such as slow economic growth, the caste system, seasonal occupations in agriculture, and more. Statistics on unemployment rates across Indian states are presented, showing an overall unemployment rate of 6% in India as of August 2018. The psychological and socioeconomic effects of unemployment are examined, along with some potential solutions like increasing demand and improving skills through education and training.
Structural unemployment in Latvia risks becoming entrenched due to skills and geographical mismatches between labor supply and demand. This structural unemployment does not disappear on its own even during economic growth. Timely policy action is needed to minimize unemployment and its substantial costs, which include increased emigration and lower potential growth. Adequate policy measures could include active labor market policies to support labor demand through public employment services, training schemes, and employment subsidies in order to reduce both cyclical and structural unemployment.
1. The document discusses unemployment, defining employed and unemployed persons. Employed persons work in the formal sector and contribute to the country's economy, while unemployed persons are unable to find work opportunities or are not part of the labor force.
2. Unemployment is influenced by factors like the demand for labor, productivity and economic growth. It affects other parts of the economy through decreased spending power and impacts social issues. Governments aim to reduce unemployment through various policies.
3. Unemployment has costs not only economic but also social, increasing issues like poverty, crime and social problems. It impacts individuals' livelihoods and standards of living.
The document summarizes key findings from India's latest employment data from 2009-2010:
- There was hardly any increase in overall employment between 2004-2005 and 2009-2010, despite high GDP growth, indicating nearly jobless growth.
- The labor force participation rate declined significantly, especially for women, both in rural and urban areas, which cannot be fully explained by higher education enrollment.
- Unemployment rates decreased due to many, especially women, withdrawing from the labor force rather than lack of job opportunities.
- Self-employment declined while casual labor increased, especially in rural areas. Real wages increased across worker categories.
However, declining agriculture employment was not matched by increasing manufacturing jobs,
This document provides an analysis of trends in the gender wage gap in the US from 2000 to 2010. It finds that before the financial crisis, the wage penalty was higher for lower-paid female workers compared to higher-paid workers, but this trend reversed during the financial crisis as the penalty reduced for lower-paid workers but remained stable for higher-paid workers. The document also reviews several theoretical models that attempt to explain the persistence of a gender wage gap, such as taste-based discrimination and statistical discrimination.
Women Leading Growth: An Empirical Analysis on the Effects of Women in Leader...Avril Espinosa-Malpica
UBC Economics 490: Seminar In Applied Economics Research Essay
250 years ago the wealthiest country was at most four times richer than the poorest country. Today the richest country is almost 100 times richer than the poorest. In this seminar, I tried to answer this question: Why have some countries grown so quickly over the long run while others have stagnated? To answer this, I focused on understanding and interpreting the effects of women in leadership positions on GDP through economics.
Factors affecting employment during crisis in private businesses in Kurdistan IJAEMSJORNAL
The main aim of this study is to investigate the critical factors that effecting employment during crisis in private businesses in Kurdistan. An empirical quantitative technique utilized to analyze the present research. The researcher applied a random sampling method, where all respondents had equal chances of being selected for the sample. The research was carried out at 18 private businesses in Erbil. The population of this research was approximately 341 employees, accordingly to cover the entire research population; 100 surveys were distributed but 84 forms were collected that were accomplished accurately. The results showed that the highest value was for economic factor this means that economic is strongly related to employment and has strong influence on employment during crisis in private businesses in Kurdistan.
The document discusses future macroeconomic trends and their impact on management. It outlines that the top 5 world economies in 2050 according to HSBC reports will be China, United States, India, Japan, and Germany. It also discusses exogenous and endogenous changes, the Solow growth model, and how technology growth impacts economies. PEST and PESTLE analysis tools are introduced to analyze macroeconomic environments.
Labor market developments during economic transitionDr Lendy Spires
The document summarizes key labor market trends during economic transition in Europe and Central Asia. It finds that a lack of productive job opportunities and growing labor market segmentation are the two main labor market problems. In European transition economies, job scarcity led to persistent unemployment supported by social safety nets. In the CIS, it led to hidden unemployment like underemployment or low-productivity jobs as unemployment is often not affordable. Employment declined substantially in Europe but modestly in the CIS where the burden fell more on wages. Despite job losses, employment ratios remain relatively high, sometimes indicating delayed restructuring and non-viable jobs. Unemployment and labor force participation declined across countries but in different proportions depending on labor market institutions and policies
Location quotients are used to measure how concentrated a particular industry is in a geographic area compared to the national average. They are calculated by taking an industry's share of total local employment and dividing it by the industry's share of total national employment. A location quotient of 1 means the industry has the same concentration locally as nationally. Values above 1 mean it is more concentrated locally, while values below 1 mean it is underrepresented. The document provides examples of calculating location quotients for industries in Bridgeport, CT and Hampton Roads, VA to show their leading industries and explain how location quotients can be used to analyze a region's economic strengths.
Session 4 d discussant iariw paper trappIARIW 2014
This paper develops a new panel dataset of labor income shares for 100 developing countries from 1990 to 2011. It improves upon previous estimates by combining macroeconomic data with information from social accounting matrices and micro-level studies. This allows the paper to better account for the labor income of self-employed individuals, an important issue in developing countries. The findings suggest the labor share has been declining in developing countries over the period studied. This decline carries implications for rising inequality according to the paper.
This study analyzed the determinants of unemployment in Pakistan from 1999-2010. It found that foreign direct investment, GDP growth, and inflation had negative relationships with unemployment, while population growth had a positive relationship. The model showed that 86% of changes in unemployment could be explained by these variables. It concluded that population growth is a key determinant of unemployment in Pakistan and recommended policies to attract FDI, control inflation, and reduce population growth to lower unemployment.
Occupational Change and Social Economic Conditions – An Inter Generational An...ijtsrd
The present study examines the occupational change and socio economic condition – an inter generational analysis of Akhnoor tehsil period of 1985 90 and 2015 17 . The major outcome of study is that share of primary activities has sharply declined in 2015 17 as compared to 1985 90. Secondary activities was totally missing in 1985 90 but their share in 2015 17 has been increased. Whereas share of Tertiary activities has increased in 2015 17 as compared to 1985 90. The emerging structural change in occupational structure shows a big decline in share of agriculture, with modest increase in share of industry and sharp rise in occupation in services. The Present study is based on both Primary and Secondary sources. Present study is helpful in finding the occupational change and social and economic conditions in Semi kandi, Kandi and Non kandi villages of Akhnoor tehsil. The present study reveals the structural transformation in occupation in the period of 1985 90 and in 2015 17 and also show the social and Economic status of the people residing in semi kandi, kandi and non kandi villages of Akhnoor tehsil. The study will be having policy implications for the Policy makers, that how regional planning should be done to ensure the development of infrastructure facilities and what measures be undertaken to generate more employment opportunities in the study area. The present study focuses on the Analysis of occupational change and its impacts on people in the period from Ist generation 1985 90 and IInd generation 2015 17 . It also examines the impact of income and employment on the people. To find out the structural transformation either from Primary, Secondary and Tertiary or directly from Primary to Tertiary activities in these areas under study. Vibhuti Sharma | Manali Sharma "Occupational Change and Social Economic Conditions – An Inter Generational Analysis of Akhnoor Tehsil" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-2 , February 2021, URL: https://www.ijtsrd.com/papers/ijtsrd38520.pdf Paper Url: https://www.ijtsrd.com/economics/other/38520/occupational-change-and-social-economic-conditions-–-an-inter-generational-analysis-of-akhnoor-tehsil/vibhuti-sharma
This document is a research report on unemployment in Pakistan that was submitted by four students to their professor. The report defines unemployment and discusses different types of unemployment including cyclical, structural, regional, classical, seasonal, frictional, and voluntary unemployment. It also provides examples of how unemployment rates are calculated. Additionally, the report examines reasons for unemployment in Pakistan such as low industrial growth, use of advanced technology, lack of vocational training programs, population growth, and more.
The document discusses how unemployment is defined and calculated. It begins by explaining the natural rate of unemployment includes frictional, structural, and cyclical unemployment. It then defines who is considered unemployed or not in the labor force. The unemployment rate is calculated as the percentage of the labor force that is unemployed. While the unemployment rate provides timely information, it has shortcomings as it excludes discouraged workers and those who are underemployed. The document also discusses other indicators like the labor force participation rate and how unemployment statistics vary by age, gender, and race.
Unemployment rates in the 1930s reached 25% as described in John Maynard Keynes' work on macroeconomics. High unemployment leads to losses in production, income, and human capital as people are without jobs. The unemployment rate, employment-to-population ratio, and labor force participation rate are key indicators used to measure the labor market and level of unemployment. While some unemployment is natural, high unemployment underutilizes the labor force and damages the economy. Inflation also poses economic problems as it redistributes wealth, diverts resources from production, and is imperfectly measured by the consumer price index.
This document discusses challenges women face when re-entering the workforce after taking time off for family reasons. It covers the topic from multiple perspectives, including the woman's perspective on career continuity, the project manager perspective on project continuity, and economics of diversity in the workplace. The document also presents 5 case studies of women in different situations dealing with re-entering the workforce. It concludes with lessons for working women and project managers, such as resetting expectations, re-skilling, flexibility, matching demand and supply, and leveraging loyalty. The overall message is that facilitating women's re-entry into the workforce has social and economic benefits but also presents challenges that require consideration from multiple viewpoints.
This document provides an outline and overview of key labor market concepts for a university presentation on unemployment and the labor market. It defines important terms like employment, unemployment, labor force participation and different types of unemployment. It also discusses broader measures of unemployment, trends in long-term unemployment in Ireland, and concepts of structural and cyclical unemployment as well as the economic definition of "full employment".
This document discusses different types of labor including manual labor, clerical work, professional work, management, entrepreneurship, and inventions. It defines labor as a factor of production and discusses how households allocate time between market and nonmarket activities based on returns. The quantity of labor supplied is determined by wage rates and availability of leisure and nonmarket opportunities. Issues in the labor market include unemployment, inadequate wages, and economic insecurities.
There are several types of unemployment defined by their causes. Cyclical unemployment results from downturns in demand, while structural unemployment occurs when industries decline due to long-term market changes. Regional unemployment is structural unemployment that affects local areas. Other types include frictional unemployment during job transitions, seasonal unemployment in industries that operate seasonally, and classical unemployment which was formerly blamed on overly high wages. The natural rate of unemployment includes types that exist even in equilibrium markets. Labour immobility contributes to structural unemployment by preventing workers from moving between declining and growing industries.
The document defines unemployment and discusses its various types, including demand deficient unemployment, structural unemployment, voluntary unemployment, and frictional unemployment. It then outlines major causes of unemployment in India such as slow economic growth, the caste system, seasonal occupations in agriculture, and more. Statistics on unemployment rates across Indian states are presented, showing an overall unemployment rate of 6% in India as of August 2018. The psychological and socioeconomic effects of unemployment are examined, along with some potential solutions like increasing demand and improving skills through education and training.
Structural unemployment in Latvia risks becoming entrenched due to skills and geographical mismatches between labor supply and demand. This structural unemployment does not disappear on its own even during economic growth. Timely policy action is needed to minimize unemployment and its substantial costs, which include increased emigration and lower potential growth. Adequate policy measures could include active labor market policies to support labor demand through public employment services, training schemes, and employment subsidies in order to reduce both cyclical and structural unemployment.
1. The document discusses unemployment, defining employed and unemployed persons. Employed persons work in the formal sector and contribute to the country's economy, while unemployed persons are unable to find work opportunities or are not part of the labor force.
2. Unemployment is influenced by factors like the demand for labor, productivity and economic growth. It affects other parts of the economy through decreased spending power and impacts social issues. Governments aim to reduce unemployment through various policies.
3. Unemployment has costs not only economic but also social, increasing issues like poverty, crime and social problems. It impacts individuals' livelihoods and standards of living.
The document summarizes key findings from India's latest employment data from 2009-2010:
- There was hardly any increase in overall employment between 2004-2005 and 2009-2010, despite high GDP growth, indicating nearly jobless growth.
- The labor force participation rate declined significantly, especially for women, both in rural and urban areas, which cannot be fully explained by higher education enrollment.
- Unemployment rates decreased due to many, especially women, withdrawing from the labor force rather than lack of job opportunities.
- Self-employment declined while casual labor increased, especially in rural areas. Real wages increased across worker categories.
However, declining agriculture employment was not matched by increasing manufacturing jobs,
This document provides an analysis of trends in the gender wage gap in the US from 2000 to 2010. It finds that before the financial crisis, the wage penalty was higher for lower-paid female workers compared to higher-paid workers, but this trend reversed during the financial crisis as the penalty reduced for lower-paid workers but remained stable for higher-paid workers. The document also reviews several theoretical models that attempt to explain the persistence of a gender wage gap, such as taste-based discrimination and statistical discrimination.
Women Leading Growth: An Empirical Analysis on the Effects of Women in Leader...Avril Espinosa-Malpica
UBC Economics 490: Seminar In Applied Economics Research Essay
250 years ago the wealthiest country was at most four times richer than the poorest country. Today the richest country is almost 100 times richer than the poorest. In this seminar, I tried to answer this question: Why have some countries grown so quickly over the long run while others have stagnated? To answer this, I focused on understanding and interpreting the effects of women in leadership positions on GDP through economics.
Factors affecting employment during crisis in private businesses in Kurdistan IJAEMSJORNAL
The main aim of this study is to investigate the critical factors that effecting employment during crisis in private businesses in Kurdistan. An empirical quantitative technique utilized to analyze the present research. The researcher applied a random sampling method, where all respondents had equal chances of being selected for the sample. The research was carried out at 18 private businesses in Erbil. The population of this research was approximately 341 employees, accordingly to cover the entire research population; 100 surveys were distributed but 84 forms were collected that were accomplished accurately. The results showed that the highest value was for economic factor this means that economic is strongly related to employment and has strong influence on employment during crisis in private businesses in Kurdistan.
The document discusses future macroeconomic trends and their impact on management. It outlines that the top 5 world economies in 2050 according to HSBC reports will be China, United States, India, Japan, and Germany. It also discusses exogenous and endogenous changes, the Solow growth model, and how technology growth impacts economies. PEST and PESTLE analysis tools are introduced to analyze macroeconomic environments.
Labor market developments during economic transitionDr Lendy Spires
The document summarizes key labor market trends during economic transition in Europe and Central Asia. It finds that a lack of productive job opportunities and growing labor market segmentation are the two main labor market problems. In European transition economies, job scarcity led to persistent unemployment supported by social safety nets. In the CIS, it led to hidden unemployment like underemployment or low-productivity jobs as unemployment is often not affordable. Employment declined substantially in Europe but modestly in the CIS where the burden fell more on wages. Despite job losses, employment ratios remain relatively high, sometimes indicating delayed restructuring and non-viable jobs. Unemployment and labor force participation declined across countries but in different proportions depending on labor market institutions and policies
Location quotients are used to measure how concentrated a particular industry is in a geographic area compared to the national average. They are calculated by taking an industry's share of total local employment and dividing it by the industry's share of total national employment. A location quotient of 1 means the industry has the same concentration locally as nationally. Values above 1 mean it is more concentrated locally, while values below 1 mean it is underrepresented. The document provides examples of calculating location quotients for industries in Bridgeport, CT and Hampton Roads, VA to show their leading industries and explain how location quotients can be used to analyze a region's economic strengths.
Session 4 d discussant iariw paper trappIARIW 2014
This paper develops a new panel dataset of labor income shares for 100 developing countries from 1990 to 2011. It improves upon previous estimates by combining macroeconomic data with information from social accounting matrices and micro-level studies. This allows the paper to better account for the labor income of self-employed individuals, an important issue in developing countries. The findings suggest the labor share has been declining in developing countries over the period studied. This decline carries implications for rising inequality according to the paper.
This study analyzed the determinants of unemployment in Pakistan from 1999-2010. It found that foreign direct investment, GDP growth, and inflation had negative relationships with unemployment, while population growth had a positive relationship. The model showed that 86% of changes in unemployment could be explained by these variables. It concluded that population growth is a key determinant of unemployment in Pakistan and recommended policies to attract FDI, control inflation, and reduce population growth to lower unemployment.
Occupational Change and Social Economic Conditions – An Inter Generational An...ijtsrd
The present study examines the occupational change and socio economic condition – an inter generational analysis of Akhnoor tehsil period of 1985 90 and 2015 17 . The major outcome of study is that share of primary activities has sharply declined in 2015 17 as compared to 1985 90. Secondary activities was totally missing in 1985 90 but their share in 2015 17 has been increased. Whereas share of Tertiary activities has increased in 2015 17 as compared to 1985 90. The emerging structural change in occupational structure shows a big decline in share of agriculture, with modest increase in share of industry and sharp rise in occupation in services. The Present study is based on both Primary and Secondary sources. Present study is helpful in finding the occupational change and social and economic conditions in Semi kandi, Kandi and Non kandi villages of Akhnoor tehsil. The present study reveals the structural transformation in occupation in the period of 1985 90 and in 2015 17 and also show the social and Economic status of the people residing in semi kandi, kandi and non kandi villages of Akhnoor tehsil. The study will be having policy implications for the Policy makers, that how regional planning should be done to ensure the development of infrastructure facilities and what measures be undertaken to generate more employment opportunities in the study area. The present study focuses on the Analysis of occupational change and its impacts on people in the period from Ist generation 1985 90 and IInd generation 2015 17 . It also examines the impact of income and employment on the people. To find out the structural transformation either from Primary, Secondary and Tertiary or directly from Primary to Tertiary activities in these areas under study. Vibhuti Sharma | Manali Sharma "Occupational Change and Social Economic Conditions – An Inter Generational Analysis of Akhnoor Tehsil" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-2 , February 2021, URL: https://www.ijtsrd.com/papers/ijtsrd38520.pdf Paper Url: https://www.ijtsrd.com/economics/other/38520/occupational-change-and-social-economic-conditions-–-an-inter-generational-analysis-of-akhnoor-tehsil/vibhuti-sharma
This document is a research report on unemployment in Pakistan that was submitted by four students to their professor. The report defines unemployment and discusses different types of unemployment including cyclical, structural, regional, classical, seasonal, frictional, and voluntary unemployment. It also provides examples of how unemployment rates are calculated. Additionally, the report examines reasons for unemployment in Pakistan such as low industrial growth, use of advanced technology, lack of vocational training programs, population growth, and more.
The document discusses how unemployment is defined and calculated. It begins by explaining the natural rate of unemployment includes frictional, structural, and cyclical unemployment. It then defines who is considered unemployed or not in the labor force. The unemployment rate is calculated as the percentage of the labor force that is unemployed. While the unemployment rate provides timely information, it has shortcomings as it excludes discouraged workers and those who are underemployed. The document also discusses other indicators like the labor force participation rate and how unemployment statistics vary by age, gender, and race.
Unemployment rates in the 1930s reached 25% as described in John Maynard Keynes' work on macroeconomics. High unemployment leads to losses in production, income, and human capital as people are without jobs. The unemployment rate, employment-to-population ratio, and labor force participation rate are key indicators used to measure the labor market and level of unemployment. While some unemployment is natural, high unemployment underutilizes the labor force and damages the economy. Inflation also poses economic problems as it redistributes wealth, diverts resources from production, and is imperfectly measured by the consumer price index.
The document discusses increasing unemployment rates and reasons for unemployment. It notes private sector employment has been negative for 10 years, with 8 million jobs lost during the recession. Unemployment duration and rates are at record highs. Reducing unemployment will require stimulating all three engines of the economy - consumers, businesses, and government - as each are currently struggling. The document proposes a non-profit jobs program as a potential "fourth engine" to reduce unemployment.
The document discusses unemployment and its measurement. It describes how the US Census Bureau conducts monthly surveys to determine the labor force status. There are three categories for unemployment: those without work but seeking in past 4 weeks, waiting to be recalled from layoff, or waiting to start a new job within 30 days. The unemployment rate is the percentage of the labor force that is unemployed, while the employment-population ratio is the percentage of the working age population with jobs. Unemployment can be frictional from job turnover, structural from skills/location changes, or cyclical from business cycle fluctuations.
The document discusses the natural rate of unemployment and its causes. It is made up of frictional unemployment, which occurs due to the time needed to search for suitable jobs, and structural unemployment, which happens when wages are kept above the equilibrium level. This can be due to minimum wage laws, unions bargaining for higher wages than the market equilibrium, and efficiency wages, where firms voluntarily pay above market wages to boost productivity. The natural rate of unemployment is normal for a healthy economy, while cyclical unemployment rises above it during recessions.
The document discusses different types and measures of unemployment. It defines unemployment as when a person is able and willing to work but unable to find a job. There are three main types of unemployment: frictional unemployment due to voluntary job changes, cyclical unemployment that rises and falls with the economy, and structural unemployment due to changes in industry demand. The unemployment rate is calculated by dividing the number of unemployed by the total labor force, which excludes those not actively seeking work. Unemployment rates fluctuate over time and differ between demographic groups.
This document discusses unemployment and its impact on the economy. It defines unemployment as people who are able and willing to work but cannot find employment. There are two main types of unemployment discussed: frictional unemployment which occurs due to imperfect information in the job market, and demand-deficient unemployment which occurs when there is a fall in aggregate demand. The document also examines unemployment rates among youth aged 15-24 and older workers aged 55-64 from 1995-2005 in Australia, finding that youth unemployment fell significantly while older worker unemployment also declined in 2005.
The document discusses different types of unemployment including frictional, structural, classical, seasonal, and cyclical unemployment. It defines the unemployment rate as the number of unemployed people divided by the total labor force. Structural unemployment occurs when workers' skills do not match available jobs, and can be caused by new technology, consumer demand shifts, or globalization. Cyclical unemployment rises during economic downturns as spending decreases and companies lay off workers. The document also notes the private and social costs of unemployment as well as its relationship to business cycles and taxes.
The document discusses measuring GDP and inflation. It defines nominal GDP as the value of goods and services produced during a year valued at that year's prices, while real GDP is valued at the prices of a base year to remove the effects of inflation. The consumer price index is used to measure inflation by tracking the prices of goods in a fixed basket over time. Fiscal and monetary policy can be expansionary to increase growth during recessions or contractionary to decrease inflation during expansions.
Unemployment is measured as the number of people willing and able to work but unable to find employment. There are different types of unemployment including cyclical, frictional, and structural. Theories of unemployment include the Keynesian and classical theories. Keynesian theory states that aggregate demand determines employment while classical theory says real wages impact employment. Unemployment has costs like reduced income and increased dependence. The NAIRU is the lowest unemployment rate that avoids inflation increases. Factors like productivity and benefits influence the NAIRU, which is important for policymakers to consider.
The document discusses different aspects of unemployment, including definitions of key terms like the labor force participation rate and unemployment rate. It provides historical unemployment rate data for the US and other countries. It also examines different types of unemployment like seasonal, frictional, structural, and cyclical unemployment. Reasons for unemployment and impacts on individuals are explored.
This document provides an overview of business cycles, unemployment, and inflation. It discusses the phases of the business cycle including expansion, recession, peaks and troughs. It also examines causes of business cycles and different types of unemployment including frictional, structural, cyclical, and seasonal unemployment. Key labor market indicators like the unemployment rate, labor force participation rate, and natural rate of unemployment are defined. The relationship between actual and potential GDP over the business cycle is also explored.
This document discusses unemployment, including how it is measured, its various costs, types of unemployment, and policies related to achieving full employment. Unemployment is measured as the number of people actively seeking work but unable to find a job. There are personal, economic, and social costs of unemployment. The main types of unemployment are frictional, structural, seasonal, and cyclical. Full employment is defined as the lowest unemployment rate compatible with price stability, around 4-6%. Policies aim to reduce unemployment through monetary policy, fiscal policy, education/training, and labor market flexibility.
This document discusses unemployment and inflation. It defines unemployment and discusses how unemployment rates can be manipulated. It also discusses the labor force survey used in Europe. It then discusses different types of unemployment including frictional, structural, and cyclical unemployment. The document also discusses the relationship between unemployment and inflation, including the Phillips curve and the natural rate of unemployment. It discusses criticisms of the relationship between inflation and unemployment and costs of both unemployment and inflation.
The document discusses different types of unemployment including voluntary, involuntary, seasonal, structural, cyclical, technological, disguised, and hidden unemployment. It explains how unemployment is measured by comparing the labor force to the number of employed individuals. The relationship between inflation and unemployment is also examined through the Phillips Curve model, which shows an inverse relationship where rising wages/inflation leads to lower unemployment. Factors like structural changes, cost-push inflation, and government transfers can impact the Phillips Curve relationship over time.
In this comprehensive chapter on unemployment, we embark on an explorative journey into the intricate dynamics of joblessness, aiming to dissect its multifaceted nature and illuminate pathways towards meaningful solutions.
We commence our inquiry by delineating the diverse manifestations of unemployment, discerning between frictional, structural, cyclical, and seasonal unemployment. Each form bears its distinct characteristics and implications, necessitating nuanced approaches for effective intervention.
Delving deeper, we unravel the underlying drivers of unemployment, which encompass a constellation of factors spanning technological innovation, globalization, mismatched skills, and economic fluctuations. Understanding these root causes is pivotal for devising targeted strategies that address the systemic barriers to employment.
Furthermore, we scrutinize the reverberating ripple effects of unemployment across individuals, families, and communities. From financial insecurity and diminished well-being to social disintegration and diminished human capital, the repercussions of joblessness permeate every facet of society, underscoring the urgency of concerted action.
Turning our gaze towards potential remedies, we embark on a quest to unearth pathways towards inclusive prosperity. We advocate for investments in education and skills development, fostering a dynamic workforce equipped to thrive in an ever-evolving labor market. Additionally, we champion the imperative of proactive labor market policies, including job creation initiatives, wage subsidies, and retraining programs tailored to the needs of vulnerable populations.
Moreover, we spotlight the catalytic role of entrepreneurship and innovation in engendering job growth and economic resilience. By cultivating an ecosystem conducive to enterprise, we nurture the seeds of innovation and empower individuals to chart their own pathways to prosperity.
Yet, our quest for solutions extends beyond policy prescriptions to encompass a broader ethos of social solidarity and collective responsibility. We underscore the imperative of forging partnerships across sectors, harnessing the collective ingenuity of government, business, civil society, and academia to forge a more equitable and inclusive future.
In sum, this chapter serves as a testament to the complexities of unemployment and the imperative of collective action. By embracing a holistic approach that addresses the structural roots of joblessness while fostering individual empowerment, we can aspire towards a future where every individual has the opportunity to realize their full potential and contribute meaningfully to society.
The document discusses the natural rate of unemployment, which is the average rate of unemployment around which the economy fluctuates. It is affected by factors like the rates of workers losing jobs and unemployed workers finding jobs. There are two main types of unemployment: frictional unemployment due to the time it takes workers to search for jobs, and structural unemployment caused by wages being rigid above market levels due to things like minimum wages and unions. The document analyzes trends in U.S. unemployment over time and potential factors influencing the natural rate, such as demographics, sectoral shifts in the economy, and social policies.
(1) The document discusses labor market concepts like the labor force, employment, unemployment, and wages.
(2) It explains that the labor force is made up of those working or looking for work, while unemployment refers to those looking for work but unable to find it.
(3) Wages are determined by factors like expected inflation, unemployment rates, bargaining power between employers and employees, and efficiency wage theories where higher pay can increase productivity.
This document provides an overview of business cycles, unemployment, and inflation in the United States. It discusses how GDP and the economy fluctuate in cycles, with alternating periods of expansion and recession. Unemployment rates and types of unemployment, including frictional, structural, cyclical, and seasonal, are also examined. Key labor market indicators like the unemployment rate and labor force participation rate are defined. The concept of potential GDP and the natural rate of unemployment are introduced.
2. Objectives
After studying this chapter, you will able to
Explain how we date business cycles
Define the unemployment rate, the labor force
participation rate, the employment-to-population ratio,
and aggregate hours
Describe the sources of unemployment, its duration, the
groups most affected by it, and how it fluctuates over a
business cycle
Explain how we measure the price level and the inflation
rate using the CPI
3. Vital Signs
A recession started in March 2001 and ended in
November 2001.
What defines a recession, who makes the decision that we
are in one, and how?
How do we measure unemployment and what other data
do we use to monitor the labor market?
Being employed alone does not determine standard of
living; the cost of living also matters, so we also need to
know what the Consumer Price Index is, and how that is
measured and used.
4. The Business Cycle
The business cycle is the periodic but irregular up-and-
down movement in production and jobs.
The NBER defines the phases and turning points of the
business cycle as follows:
A recession is a significant decline in activity spread
across the economy, lasting more than a few months,
visible in industrial production, employment, real income,
and wholesale-retail trade. A recession begins just after
the economy reaches a peak of activity and ends as the
economy reaches its trough. Between trough and peak,
the economy is in an expansion.
5. The Business Cycle
Business Cycle Dates
Figure 22.1 shows the percentage change in real
GDP over each cycle between 1928 and 2003.
6. The Business Cycle
The 2001 Recession
The 2001 recession was one of the mildest recession on
record.
But the recovery from that recession was unusually slow
and weak—a jobless recovery.
7. Jobs and Wages
Population Survey
The U.S. Census Bureau conducts monthly surveys to
determine the status of the labor force in the United
States.
The population is divided into two groups:
The working-age population—the number of people
aged 16 years and older who are not in jail, hospital, or
other institution.
People too young to work (less than 16 years of age) or
in institutional care.
8. Jobs and Wages
The working-age population is divided into two groups:
People in the labor force
People not in the labor force
The labor force is the sum of employed and unemployed
workers.
9. Jobs and Wages
To be considered unemployed, a person must be:
without work and have made specific efforts to find a job
within the past four weeks, or
waiting to be called back to a job from which he or she
was laid off, or
waiting to start a new job within 30 days.
11. Jobs and Wages
Three Labor Market Indicators
The unemployment rate is the percentage of the labor
force that is unemployed.
The unemployment rate is (Number of people
unemployed/Labor force) × 100.
The unemployment rate reaches its peaks during
recessions.
12. Jobs and Wages
Three Labor Market Indicators
The labor force participation rate is the percentage of
the working-age population that is in the labor force.
The labor force participation rate is (Labor force/Working-
age population) × 100.
The labor force participation rate has increased from 59
percent in the 1960s to 67 percent in the 1990s.
The labor force participation rate for men has declined, but
for women has increased.
13. Jobs and Wages
Three Labor Market Indicators
The labor force participation rate falls during recessions as
discouraged workers—people available and willing to
work but who have not made an effort to find work within
the last four weeks—leave the labor force.
14. Jobs and Wages
Three Labor Market Indicators
The employment-to-population ratio is the percentage of
working-age people who have jobs.
The employment-to-population ratio is (Number of people
employed/Working-age population) × 100.
The employment-to-population ratio has increased from 55
percent in the early 1960s to 67 percent in 2000.
The employment-to-population ratio has declined for men
and increased for women.
15. Jobs and Wages
Three Labor Market Indicators
Figure 22.3 shows the three labor market indicators
for 1963–2003.
16. Jobs and Wages
Figure 22.4 shows the
changing face of the labor
market– participation rates
and employment-to-
population ratios for males
and females separately.
17. Jobs and Wages
Aggregate Hours
Aggregate hours are the total number of hours worked by
all workers during a year.
Aggregate hours have increased since 1960 but less
rapidly than the total number of workers because the
average workweek has shortened.
19. Jobs and Wages
Aggregate Hours
Figure 22.5 shows
aggregate hours …
and average weekly hours
per person, 1963–2003.
20. Jobs and Wages
Real Wage Rate
The real wage rate is the quantity of goods and services
that can be purchased with an hour’s work.
The real wage rate equals the money wage rate divided by
the price level—the GDP deflator.
Three measures are
Hourly earnings in manufacturing
Total wages and salaries per hour
Total wages, salaries, and supplements per hour
21. Jobs and Wages
Figure 22.6 shows the
three measures of real
wage rates for 1963–2003.
22. Unemployment and Full Employment
The Anatomy of Unemployment
Three types of people are unemployed
Job losers—workers who have been laid off or fired and
are searching for new jobs.
Job leavers—workers who have voluntarily quit their jobs
to look for new ones. Job leavers are the smallest fraction
of the unemployed.
Entrants and reentrants—people entering the labor force
for the first time or returning to the labor force and
searching for work.
23. Unemployment and Full Employment
The Anatomy of Unemployment
People end a spell of unemployment for two reasons
Hired or recalled workers gain jobs.
Discouraged unemployed workers withdraw from the labor
force.
24. Unemployment and Full Employment
Figure 22.7 illustrates the
labor market flows
between the different
states.
25. Unemployment and Full Employment
Figure 22.8 shows
unemployment by
reason, 1963–2003.
Job leavers are the
smallest group.
Job losers are the
largest and the most
cyclical group.
26. Unemployment and Full Employment
The duration of
unemployment increases
during recessions and
Figure 22.9 shows
unemployment by
duration close to a
business cycle peak in
2000…
… and close to a trough
in 2002.
27. Unemployment and Full Employment
Figure 22.10 shows the
unemployment rates of
teenagers and adults,
whites and blacks close to
a business cycle peak in
2000…
… and close to a trough in
1992.
Young black men
experience the highest
unemployment rates.
28. Unemployment and Full Employment
Types of Unemployment
Unemployment can be classified into three types:
Frictional
Structural
Cyclical
29. Unemployment and Full Employment
Types of Unemployment
Frictional unemployment is unemployment that arises
from normal labor market turnover.
The creation and destruction of jobs requires that
unemployed workers search for new jobs.
Increases in the number of young people entering the
labor force and increases in unemployment benefit
payments raise frictional unemployment.
30. Unemployment and Full Employment
Types of Unemployment
Structural unemployment is unemployment created by
changes in technology and foreign competition that
change the match between the skills necessary to perform
jobs and the locations of jobs, and the skills and location of
the labor force.
Cyclical unemployment is the fluctuation in
unemployment caused by the business cycle.
31. Unemployment and Full Employment
Full Employment
Full employment occurs when there is no cyclical
unemployment or, equivalently, when all unemployment is
frictional or structural.
The unemployment rate at full employment is called the
natural rate of unemployment.
The natural rate of unemployment is estimated to have
been around 6 percent on the average in the United
States, but during the 1990s, the natural unemployment
rate fell below 6 percent.
32. Unemployment and Full Employment
Real GDP and Unemployment Over the Cycle
Potential GDP is the quantity of real GDP produced at full
employment.
It corresponds to the capacity of the economy to produce
output on a sustained basis; actual GDP fluctuates around
potential GDP with the business cycle.
33. Unemployment and
Full Employment
Figure 22.11 shows real
GDP, and the
unemployment rate...
…and estimates of
potential GDP and the
natural unemployment
rate, for 1983–2003.
34. The Consumer Price Index
The price level is the “average” level of prices and is
measured by using a price index.
The consumer price index, or CPI, measures the
average level of the prices of goods and services
consumed by an urban family.
35. The Consumer Price Index
Reading the CPI Numbers
The CPI is defined to equal 100 for the reference base
period.
The value of the CPI for any other period is calculated by
taking the ratio of the current cost of a market basket of
goods to the cost of the same market basket of goods in
the reference base period and multiplying by 100.
36. The Consumer Price Index
Constructing the CPI
Constructing the CPI involves three stages:
Selecting the CPI basket
Conducting a monthly price survey
Using the prices and the basket to calculate the CPI
37. The Consumer Price Index
Figure 22.12 illustrates the
CPI basket.
Housing is the largest
component.
Transportation and food
and beverages are the
next largest components.
The remaining
components account for
only 26 percent of the
basket.
38. The Consumer Price Index
The CPI basket is based on a Consumer Expenditure
Survey.
The current CPI is based on a 1993-95 survey, although
the reference base period is still 1982-84.
Every month, BLS employees check the prices of 80,000
goods and services in 30 metropolitan areas.
The CPI is calculated using the prices and the contents of
the basket.
39. The Consumer Price Index
For a simple economy that consumes only oranges
and haircuts, we can calculate the CPI.
The CPI basket is 10 oranges and 5 haircuts.
Item Quantity Price Cost of CPI
basket
Oranges 10 $1.00 $10
Haircuts 5 $8.00 $40
Cost of CPI basket at base period prices $50
40. The Consumer Price Index
This table shows the prices in the base period.
The cost of the CPI basket in the base period was $50.
Item Quantity Price Cost of CPI
basket
Oranges 10 $1.00 $10
Haircuts 5 $8.00 $40
Cost of CPI basket at base period prices $50
41. The Consumer Price Index
Item Quantity Price Cost of CPI
basket
Oranges 10 $2.00 $20
Haircuts 5 $10.00 $50
Cost of CPI basket at base period prices $70
This table shows the prices in the current period.
The cost of the CPI basket in the current period is $70.
42. The Consumer Price Index
The CPI is calculated using the formula:
CPI = (Cost of basket in current period/Cost of basket in
base period) 100.
Using the numbers for the simple example, the CPI is
CPI = ($70/$50) 100 = 140.
The CPI is 40 percent higher in the current period than in
the base period.
43. The Consumer Price Index
Measuring Inflation
The main purpose of the CPI is to measure inflation.
The inflation rate is the percentage change in the price
level from one year to the next.
The inflation formula is:
Inflation rate = [(CPI this year – CPI last year)/CPI last
year] × 100.
44. The Consumer Price Index
Figure 22.13 shows the CPI and the inflation rate, 1973–
2003.
45. The Consumer Price Index
The Biased CPI
The CPI may overstate the true inflation for four reasons
New goods bias
Quality change bias
Commodity substitution bias
Outlet substitution bias.
46. The Consumer Price Index
The Biased CPI
New goods bias New goods that were not available in the
base year appear and, if they are more expensive than the
goods they replace, the price level may be biased higher.
Similarly, if they are cheaper than the goods they replace,
but not yet in the CPI basket, they bias the CPI upward.
Quality change bias Quality improvements generally are
neglected, so quality improvements that lead to price hikes
are considered purely inflationary.
47. The Consumer Price Index
The Biased CPI
Commodity substitution bias The market basket of
goods used in calculating the CPI is fixed and does not
take into account consumers’ substitutions away from
goods whose relative prices increase.
Outlet substitution bias As the structure of retailing
changes, people switch to buying from cheaper sources,
but the CPI, as measured, does not take account of this
outlet substitution.
48. The Consumer Price Index
The Biased CPI
A Congressional Advisory Commission estimated that the
CPI overstates inflation by 1.1 percentage points a year.
The bias in the CPI distorts private contracts, increases
government outlays (close to a third of government outlays
are linked to the CPI), and biases estimates of real
earnings.
To reduce the bias in the CPI, the BLS will undertake
consumer expenditure surveys more frequently and revise
the CPI basket every two years.
The business cycle and its dating can be made interesting to students. If you have the capacity to show or assign Web pages, look at the NBER Business Cycle Dating Committee’s page at http://www.nber.org/cycles/recessions.html. (The link is on the Economics Place Web site.)
You might like to look at the dating of the cycle in other countries. This dating is done by the Economic Cycle Research Institute (ECRI). You can find their Web site at http://www.businesscycle.com/research/intlcycledates.asp (also on the Economics Place Web site).
Another page on the ECRI Web site (at http://www.businesscycle.com/pdfs/0012-businessChron.PDF and also on the Economics Place Web site) shows the cycle peak and trough dates for 18 countries from 1948 through 2001 nicely aligned in a table.
You can compare the timing of cycles internationally. You can also compare the severity of U.S. cycles over time. Note that the recession that the NBER dates as beginning in March 2001 is incredibly mild on all criteria except the labor market. It will be interesting to watch for the next announcement of the end of the recession and beginning of recovery. This event should occur during 2002.
The Establishments survey: The textbook doesn’t talk about the Establishments survey that measure nonfarm jobs. But it is the numbers from this survey that have shown zero job growth since the last recession. It might be worth mentioning those numbers and getting your students to get the data for that past year from the BLS website.
Positive versus normative. Unemployment is an emotionally charged subject and is a good one for reinforcing the important point that economics is positive in contrast to normative. Economists do not make normative judgments as to whether unemployment is good or bad; rather they explain why unemployment exists and what determines its rate.
The benefits of unemployment. It comes as a shock to most students that unemployment has benefits as well as costs and that there is an efficient amount of unemployment that is greater than zero. (Note that this statement is positive!) You might like to spend a bit of class time on this topic. If you do, here are some ideas about what to do:
A good way to introduce the idea that unemployment brings benefits is to think about the unemployment of things rather than people. Look around the campus and notice all the unemployed automobiles in the parking lots/stations. Notice the unemployed class rooms early in the morning and late at night. Notice the unemployed coffee shop seats at peak lecture times. Look around the city and notice all the unemployed automobiles in the car sales lots. Try to make a reservation at any of the hotels in the city and notice that you can almost always get a room—hence, lots of unemployed hotel rooms.
[Continued on the note for the next slide.]
Now ask: does all this unemployment bring benefits? The students quickly see that it would be very costly to organize rental markets in which cars don’t sit idle all day, and so on.
Now ask: do the same ideas apply to unemployed people? (Be sure to be compassionate about the misery that unemployment can bring. You are not claiming that it is not costly. You’re trying to identify the benefits, if any.)
You’ll quickly get your students to see that imagining an economy without any unemployment is nearly impossible. If consumers are free to change their decisions about what they want to buy, some goods and services must fall out of favor when others come into favor. The firms making the unfavored products fall on hard times and often their workers are fired or laid off.
Sure, these laid off workers could start work right away, cleaning shoes or selling flowers at intersections. But they are better off (in their own opinion) being frictionally unemployed and searching for new jobs. To eliminate this source of unemployment we would need to forbid consumers from changing their buying plans or insist that no one remain idle and get on with doing any job even if it doesn’t earn a wage.
Note that if this is how we ran our economy, we’d still be using coal-fired stoves and the pony express, and we’d be wearing coonskin caps. There would be no McDonald’s, Federal Express, or Nike shoes.
Male-female differences in the labor market. Students are interested in the different behavior of the male labor force participation rate and the female labor force participation rate. Students will probably believe that the reason for the increasing female participation rate is social, not economic. They will identify changing social attitudes toward women as the major source and probably see the women’s liberation movement as the driving force for this change. While not to deny the importance of attitudes, this area is a good one in which to get students to explore the economic forces that lie behind social attitudes and change. Get them to think about the technological advances that have contributed to more women being in the labor force. Many goods that were previously produced in the household are now mass-produced and available for purchase—most items of prepared food, for example. New appliances have increased productivity in the home enabling household production in less time—laundry, kitchen, and cleaning equipment for example. The market provides new goods and services that households want but can’t readily make at home—home entertainment equipment (TV, CD, DVD, etc) for example. These changes lead to many families deciding to have two income-earners rather than the older tradition of one. It is interesting to let students discuss what they think will happen to the labor force participation rates in the future and whether or not they think they will ever be equal—or unequal in the opposite direction!
Jobs and home production. It is interesting to ask students to think about appropriate measures of labor force participation over long periods of time or in very different economic arrangements. The technical definition involves spending time working for gain, or seeking work for gain. In the United States, this usually equates to work outside the home. Ask students whether women who are unpaid family workers on farms are in or out of the labor force; and then ask whether they are if they don’t work outside the home, but cook, make and wash clothing, and otherwise maintain the household for a large family.
Labor turnover and unemployment. Ask in class how many students have jobs and how many of them have changed their job within the last 12 months. You can now discuss the constant movement in and out of the labor market and the consequence that frictional unemployment will always exist.
Identifying frictional, structural, and cyclical unemployment. Ask your class if anyone they know has been laid off. Then discuss whether losing a job creates frictional, structural, or cyclical unemployment. Look at your local examples. If you live in a steel-producing area, for example, you can talk about local structural unemployment arising from the closing of a steel manufacturer due to international competition. For cyclical unemployment, ask students how they think the business cycle and cyclical unemployment is related to full-time enrollments at higher education institutions. Students often don’t think there is any relationship. But nationally during a recession, the growth rate of full-time enrollments increases. Ask students if they can explain this relationship. The answer is that during a recession and due to the increase in cyclical unemployment, the opportunity cost of school decreases. This is a great way to keep students thinking about marginal benefits and costs.
The CPI—an average. It is important for students to understand that the CPI is based on the average expenditure basket, not the expenditure pattern of any given household. Displaying the detailed press releases on the BLS Web site helps make this point very forcibly: students often do not realize until they see the numbers that the CPI must include both costs of owning a house and costs of renting one; costs of buying a car and costs of public transportation; and so on.
Making the CPI personal. If you have time (or want to make time) you can get your students to construct their own CPI basket. Each student makes a statement of her/his expenditure in the same categories as the CPI basket in the figure on this slide. Students then compare their expenditure patterns to the average of the CPI basket.
CPI biases—concrete illustrations. New goods bias can be illustrated with MP3 music rather than CDs; quality change with computers and cars; commodity substitution with movies versus videos; and outlet substitution by the growth of Wal-mart, Target, and shopping on the internet.