Labor Market and Unemployment Statistics

Flashcards created to help understand key concepts related to labor force statistics and unemployment.

Labor Force Participation Rate (LFPR)

Percentage of the adult population that is in the labor force, including employed and unemployed.

Unemployment Rate

Percentage of the labor force that is unemployed but actively seeking employment.

Employed

Individuals who are paid employees, self-employed, or unpaid workers in family businesses.

Unemployed

Individuals not working who have looked for work during the previous 4 weeks.

Not in Labor Force

Individuals who are neither employed nor actively seeking employment.

Natural Rate of Unemployment

The normal rate of unemployment around which the actual unemployment rate fluctuates.

Cyclical Unemployment

Unemployment that arises from economic recessions when businesses are doing poorly.

Frictional Unemployment

Short-term unemployment that occurs when individuals are moving between jobs.

Structural Unemployment

Long-term unemployment that arises when there are more people seeking jobs than there are available.

Factors Contributing to Frictional Unemployment

Includes job search duration, sectoral shifts, and unemployment benefits.

Minimum Wage

The lowest legal wage that can be paid to workers, which can affect employment levels.

Efficiency Wages

Wages that are set above the market rate to increase worker quality, reduce turnover, and improve effort.

Recession

A period of economic decline when the unemployment rate is above the natural rate.

Discouraged Workers

Individuals who are available for work but have given up looking for jobs and are not counted in the labor force.

Labor Market Health

An assessment of the employment situation, including the unemployment rate and job availability.

Limitations of the U-rate

excludes discouraged workers, doesn’t distinguish between full and part time work, some people mis report their work status in the BLS survey.

what makes up the Natural Rate of Unemployment

Frictional and Structural unemployment