unemployment

(noun)

The state of being jobless and looking for work.

Related Terms

  • labor force
  • poverty
  • expansionary monetary policy

Examples of unemployment in the following topics:

  • Reasons for Unemployment

    • There are three reasons for unemployment which are categorizes as frictional, structural, and cyclical unemployment.
    • There are four types of unemployment.
    • The natural level of unemployment is the unemployment rate when an economy is operating at full capacity.
    • There is always at least some frictional unemployment in an economy, so the level of involuntary unemployment is properly the unemployment rate minus the rate of frictional unemployment.
    • Over time, unemployment has returned to about 5%, which is the approximate natural rate of unemployment.
  • Types of Unemployment: Frictional, Structural, Cyclical

    • Structural unemployment is one of the main types of unemployment within an economic system.
    • It is often impacted by persistent cyclical unemployment.
    • Frictional unemployment is another type of unemployment within an economy.
    • The natural unemployment rate, sometimes called the structural unemployment rate, was developed by Friedman and Phelps in the 1960s.
    • The natural rate of unemployment is a combination of structural and frictional unemployment.
  • Defining Full Employment

    • Full employment is defined as an acceptable level of unemployment somewhere above 0%; there is no cyclical or deficient-demand unemployment.
    • Ideal unemployment excludes types of unemployment where labor-market inefficiency is reflected.
    • Ideal unemployment promotes the efficiency of the economy.
    • The full employment unemployment rate is also referred to as "natural" unemployment.
    • Full employment is defined as "ideal" unemployment.
  • Typical Lengths of Unemployment

    • Long-term unemployment lasts 27 or more weeks.
    • Generally, unemployment is high during recessions.
    • Short-term unemployment is considered any unemployment period that lasts less than 27 weeks.
    • Long-term unemployment is classified as unemployment that lasts for 27 weeks or longer.
    • Short-term unemployment is considered less than 27 weeks, while long-term unemployment is joblessness that lasts 27 weeks or longer.
  • Defining Unemployment

    • It differs from frictional unemployment because it lasts longer.
    • Hidden: the unemployment of potential workers that is not taken into account in official unemployment statistics because of how the data is collected.
    • The final measurement is called the rate of unemployment .
    • The effects of unemployment can be broken down into three types:
    • Unemployment can lead to homelessness, illness, and mental stress.
  • Measuring the Unemployment Rate

    • Unemployment occurs when people are without work and are actively seeking employment.
    • The unemployment rate is measured using two different labor force surveys.
    • The survey measures the unemployment rate based on the ILO definition.
    • The unemployment rate is updated on a monthly basis.
    • They calculate different aspects of unemployment.
  • Shortcomings of the Measurement

    • Unemployment is measured in order to determine the unemployment rate.
    • In order to find the rate of unemployment, four methods are used:
    • Calculates unemployment by different categories such as race and gender.
    • This method is the least effective for measuring unemployment.
    • The unemployment rate is the percentage of unemployment calculated by dividing the number of unemployed individuals by the number of individuals currently employed in the labor force.
  • The Short-Run Phillips Curve

    • The Phillips curve depicts the relationship between inflation and unemployment rates.
    • As unemployment rates increase, inflation decreases; as unemployment rates decrease, inflation increases.
    • When the unemployment rate is 2%, the corresponding inflation rate is 10%.
    • As unemployment decreases to 1%, the inflation rate increases to 15%.
    • As output increases, unemployment decreases.
  • The Phillips Curve

    • The Phillips curve shows the inverse relationship between inflation and unemployment: as unemployment decreases, inflation increases.
    • The Phillips curve relates the rate of inflation with the rate of unemployment.
    • The Phillips curve argues that unemployment and inflation are inversely related: as levels of unemployment decrease, inflation increases.
    • In his original paper, Phillips tracked wage changes and unemployment changes in Great Britain from 1861 to 1957, and found that there was a stable, inverse relationship between wages and unemployment.
    • In this image, an economy can either experience 3% unemployment at the cost of 6% of inflation, or increase unemployment to 5% to bring down the inflation levels to 2%.
  • Impact of Public Policy on Unemployment

    • Most governments strive to achieve low levels of unemployment.
    • However, the types of policies differ depending on what type of unemployment they address.
    • Governments can enact policies to try to reduce frictional unemployment.
    • Structural unemployment is due to more people wanting jobs than there are jobs available.
    • Review the importance of unemployment benefits in the American social welfare program
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