Employment

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Employment Unemployment

• Chapter 7
• Sections 1, 2

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Figure 7.2 Unemployment Over the Business Cycle,
U.S. 1969-2006
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Unemployment Rate Since 1900
Back
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Who is unemployed?

• It depends on how you answer the survey question
  asked by the Bureau of Labor Statistics

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Figure 7.1 Classifications in the Household
Survey
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How is the unemployment rate calculated?
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Table 7.1 Unemployment for Different Groups (May,
2006)

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What is the cost of unemployment?A concept map

• Group Exercise

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Okuns Law 1 ? in UR ? 2 ? in GDP
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Okuns Law 1 ? in UR ? 2 ? in GDP
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No fault

• Exercise 1, p.26

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Use CPS lesson
The small nation of Neverland counts its
unemployed using the same methods as the United
States. Of the population of 350 people, 70 are
under age 16, 190 are employed in paid work, and
80 are adults who are not doing paid work or
looking for work because they are doing full-time
family care, are retired or disabled, or are in
school. The rest are unemployed. (No one is
institutionalized, and the country has no
military.) Calculate the following a. The
number of unemployed. b. The size of the labor
force c. The unemployment rate d. The labor
force participation rate (overall, for both
sexes)
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Types of Unemployment

• Frictional (some is good)
• Structural (messy to solve)
• Cyclical (the macroecon problem)
• Overall whats an acceptable rate?
• 4 to 5.5 depending on ones point of view

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Target zone
Figure 7.2 Unemployment Over the Business Cycle,
U.S. 1969-2006