Unemployment

• What is the definition of unemployment?

  Condition when a person is seeking work but can't find it
• What conditions must be met for a person to be considered unemployed?

  Must be willing, able, and actively seeking work
• Who is excluded from the definition of unemployment?

  Incarcerated, institutionalized, full-time students, disabled
• What is the labour force defined as?

  • Individuals aged 18–65
  • Working or actively seeking work
  • Excludes retirees, incapacitated, students, incarcerated, hospitalized
• What is the unemployment rate?

  Proportion of the labour force that is unemployed
• How is the unemployment rate calculated?

  $Unemployment Rate =$$(Number of unemployed/labour force)*$$100$
• What is underemployment?

  Working in jobs below qualifications or part-time seeking full-time
• What does the labour force participation rate measure?

  Percentage of the population involved in the labour force
• How is the labour force participation rate calculated?

  $Participation Rate=$$(Labour force/ population)*$$100$
• What is full employment?

  Occurs when unemployment is at the "natural" rate
• What are the types of unemployment and their causes?

  1. Frictional Unemployment:

  • Short-term during job transitions
  • Causes: Job searching, career shifts, skill mismatches

  1. Structural Unemployment:

  • Long-term skill mismatch
  • Causes: Technological advancements, globalization

  1. Seasonal Unemployment:

  • Tied to specific seasons
  • Causes: Seasonal demand, weather impacts

  1. Cyclical Unemployment:

  • During economic downturns
  • Causes: Reduced consumer spending, investment declines
• What are the human costs of unemployment?

  Lower morale, skill erosion, increased crime risk
• What are the economic costs of unemployment?

  Lost output, increased government spending, lost tax revenue
• What government policies can address different types of unemployment?

  1. Frictional Unemployment:

  • Improve job centers and online platforms
  • Provide career counseling and training

  1. Structural Unemployment:

  • Offer education and retraining
  • Subsidize relocation costs

  1. Seasonal Unemployment:

  • Diversify the economy
  • Implement off-season programs

  1. Cyclical Unemployment:

  • Adopt expansionary fiscal policies
  • Use expansionary monetary policies