Unemployment

I.            The percent of people in the labor force that are looking for a job, but can't get one.

II.            Labor force: the number of people in a country that are classified as employed or unemployed.

III.           L=  UnEm + Em

IV.         Employed

                  a.            Qqn that works at least one hour a month

                  b.            Qqn temporarily absent from work

                  c.            Part-time people

V.            Unemployed

                 a.            Frictional: Between jobs. Transferable skills.

                 b.            Seasonal: Due to nature of the job and time of the year.

                 c.            Structural: Skills have become obsolete. Non-transferable skills. "Creative destruction".

                 d.            Cyclical: results from recessions, demand for goods and services falls, demand for labor falls and workers are fired.

VI.            Not in labor force

                  a.            Kids

                  b.            Full-time students

                  c.            People in mental institutions

                  d.           Military personnel

                  e.            Stay-at-home parents

                  f.            Retirees

                  g.            Incarcerated (at least six months)

                  h.            Discouraged workers (Hobo)

VII.          Unemployment rate= (#unemployed/#labor force)*100

VIII.        Standard unemployment rate= 4-5%

IX.      Frictional + Structural= NRU (full employment)

X.          Full employment means no cyclical employment.

XI.            Okun's law: When unemployment rises 1% above the natural rate, GDP falls by about 2%.