Unemployment
Unemployment- failure to use available resources, particularly labor to produce desire goods and services.
Population- number of people in a country
Labor force- number of people in a country that are classified by either employed or unemployed
Employed- people 16 years of age or older that have a job, in order to be considered employed you must work at least 1 hour every 2 weeks to be considered employed.
Population- number of people in a country
Labor force- number of people in a country that are classified by either employed or unemployed
People that are not in the labor force:
- Kids- full time student
- Military personnel
- Homemakers
- Institutionalised
- Retired people
- Incarcerated
- Full-time students (college)
- Discourage workers
Employed- people 16 years of age or older that have a job, in order to be considered employed you must work at least 1 hour every 2 weeks to be considered employed.
Unemployed- people who are 16 years of age or older that do not have a job, but have actively searched for one in the last 2 weeks.
Unemployment rate- # of unemployed/ total labor force (unemployed+employed)
Unemployment types:
Full employment (4% to 5% unemployment) NRU (Natural Rate of Unemployment)- no cyclical
- Frictional- temporarily unemployed or between jobs (individuals are qualified and have transferable skills). High school graduates and College graduates.(best type of unemployed)
- Seasonal- time of the year where their skills may be required. Ex: lifeguards and Construction workers (weather determinant)
- Structural- changes in the industry, lack of skills (gone obsolete) dont have transferable skills. Have to learn a new skill. Ex: VCR repair person, NASA. "Creative destruction" (permanent loss of jobs due to skills being obsolete). Ex: High School dropout
- Cyclical- results from economic downturns. Ex: recession. As demand of goods and services fall, demand for labor falls and workers are laid off.
Full employment (4% to 5% unemployment) NRU (Natural Rate of Unemployment)- no cyclical
unemployment (Frictional + Structural= natural rate of unemployment)
Okun's law- states that for every 1% that unemployment rises above the natural rate of unemployment rises above the NRU, GDP will by 2%.
Rule of 70- number of years required for GDP to double. Ex: of the annual inflation rate is 2%. 35 years to reach 70% to double GDP.
This post is organized very well, can be easily navigated, and contains all required information, but I would suggest for you to add the formula to Okun's Law, which is (Actual Unemployment Rate - Natural Rate of Unemployment) x 2 = % decline in real GDP, to assist those who are uninformed or maybe just to allow others to have a more pleasant time when solving for Okun's Law related problems since they could just be able to plug digits into a formula.
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