1 / 21

Unit 5: Full Employment

Unit 5: Full Employment. In the long run, the right answer to unemployment is to create more jobs. - George Walker Bush, Unemployment is of vital importance, particularly to the unemployed. - Edward Heath Business will be either better or worse.

tirza
Download Presentation

Unit 5: Full Employment

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Unit 5: Full Employment • In the long run, the right answer to unemployment is to create more jobs. • - George Walker Bush, • Unemployment is of vital importance, particularly to the unemployed. • - Edward Heath • Business will be either better or worse. • When more and more people are thrown out of jobs, unemployment tends to rise. • - Calvin Coolidge

  2. Society's Goals for Macro System • Growth • Stable Prices & Money • Full Employment • Stability of Business Cycle

  3. Key Measures: • Unemployment Rate • Labor Force Participation Rate • Employment-Population Rate • Net New Jobs Create • New Unemployment Claims • Jobs-workers ratio

  4. Unemployment in the U.S. US Unemployment Data - BLS.gov

  5. Population Institutional Pop.Children (<16)Active Duty Military RetiredDon't want employment nowIn SchoolDiscouraged - quit looking for work Not In Labor Force AdultNon-InstitutionalCivilianPop. [A] Employed [C] Unemployed [D](Not Employed, But Actively Looking) Labor Force [B](willing & able to work) Voluntary Quit Involuntary Quit Returning New Entrant Analyzing employment

  6. Defining “Adult Civilian Non-Institutionalized Population” • = labor force + not-in-labor-force • = total population – institutionalized – active duty military – children under age 16

  7. Defining “Employed”: person is working regardless of type or num of hours/jobs.

  8. Defining “Unemployed”: no job, but willing, able, and actively looking for work.

  9. Defining Labor force: • unemployed + employed

  10. Defining “Not-in-labor force: • retired, stay-at-home spouses, idle rich, non-working students, discouraged would-be workers (not looking)

  11. Unemployment Rate:= Unemployed / Labor Force • Excludes discouraged workers

  12. Labor Force Participation Rate: • = Labor Force / Civ.N-I Adult Pop. • = (employed + unemployed) / CivN-IA Pop

  13. Employment Population Ratio • = employed / population

  14. Why don’t the unemployed have a job right now? 4 Types of Unemployment:

  15. Frictional: open job exists for each unemployed worker but they haven’t matched up yet

  16. Structural: open jobs exist but require skills/locations that match workers’

  17. Seasonal: temporary situation because job only exists during certain months of year.

  18. Cyclical: more unemployed workers than available open jobs.

  19. Policy Goal: ‘full employment’, but that doesn’t mean 0% rate.

  20. NATURAL RATE OF UNEMPLOYMENT: economy at capacity with zero frictional unemployment.

  21. Full Employment is usually defined as achieving the “natural rate” or zero cyclical.

More Related