10: Unemployment
- Page ID
- 158639
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- 10.1: Introduction to Unemployment
- This page discusses unemployment, covering its definition, computation, patterns, and causes. It emphasizes the COVID-19 pandemic's significant effect, with the U.S. unemployment rate reaching 14.8% in April 2020. The chapter examines the severe personal and economic repercussions of unemployment, advocating for low unemployment levels as a key public policy goal, and aims to provide readers with essential insights into the complexities of the labor market.
- 10.2: How Economists Define and Compute Unemployment Rate
- This page covers labor statistics, detailing the definitions and calculations of the labor force participation and unemployment rates, and discussing their implications for economic health. It addresses issues like hidden unemployment and the limitations of the Current Population Survey (CPS) conducted by the U.S. Bureau of Labor Statistics, which, despite its importance, has flaws such as excluding self-employed individuals and not differentiating job types.
- 10.3: Patterns of Unemployment
- This page explores U.S. unemployment trends, noting fluctuations tied to economic cycles and demographic disparities, with younger and less educated workers facing higher rates, and significant racial differences. It also compares U.S. unemployment with other high-income countries, addressing complexities in international comparisons stemming from varying definitions and labor market characteristics.
- 10.4: What Causes Changes in Unemployment over the Short Run
- This page explores cyclical unemployment and its connection to the business cycle, emphasizing how firms’ economic perceptions affect labor demand. It discusses sticky wages and theories like implicit contracts and efficiency wages that explain wage rigidity during downturns.
- 10.5: What Causes Changes in Unemployment over the Long Run
- This page explores the concepts of frictional and structural unemployment, their impact on the natural rate of unemployment, and the influence of productivity changes. It discusses historical U.S. unemployment trends from the 1970s to 2022, considering demographic shifts and comparing U.S. and European rates.
- 10.6: Key Terms
- This page covers essential concepts in unemployment and labor economics, including adverse selection from wage cuts, types of unemployment (cyclical, frictional, structural), and the role of discouraged workers. Key theories like efficiency wages and implicit contracts are discussed, along with the insider-outsider model that distinguishes between current employees and potential hires.
- 10.7: Key Concepts and Summary
- This page defines and computes the unemployment rate, detailing its costs to individuals and the economy. It describes the labor force classifications and the calculation method using the Current Population Survey. The page highlights demographic disparities and cyclical factors in unemployment, examining short-run and long-run changes, including cyclical and structural unemployment, the natural rate, and the effects of economic and policy factors on job dynamics.