ECON 202 - Chapter 7: Unemployment

Flashcards covering key definitions and concepts related to unemployment, labor force, and alternative measures of unemployment from ECON 202 lecture notes.

Labor Force

Individuals aged 16 and older who are non-institutionalized, non-retired, non-student (unless actively working or looking for work), non-military, and able to work. It equals the sum of employed and unemployed individuals.

Unemployment

A person in the labor force who does not have a job and is actively looking for a job.

Discouraged Workers

Individuals who want to work, have searched for work in the prior year, but are not currently looking for work because they believe they won't be able to find a job.

Labor Force Participation Rate

The fraction of the population over age 16 that is in the labor force, calculated as (labor force / population ≥ 16).

Frictional Unemployment

Joblessness between jobs or when entering or reentering the labor market.

Seasonal Unemployment

Joblessness related to seasonal factors.

Structural Unemployment

Joblessness due to mismatches between workers’ skills and employers’ requirements, or between workers’ locations and employers’ locations.

Cyclical Unemployment

Joblessness arising from changes in production over the business cycle.

Natural Rate of Unemployment

The level of unemployment at which there is no cyclical unemployment; economists' notion of what the unemployment rate should be under full employment (historically 5-6.5%, more recently 4-4.5% in the US).

Marginally Attached Workers

Individuals who would like to work, have searched for work in the recent past, but have stopped looking for work for a variety of reasons.

Underemployed (Working part-time for economic reasons)

Workers who would like to be employed full-time but hold part-time jobs due to economic reasons.

Unemployment Insurance

Payments received from the government upon becoming unemployed, typically temporary and not replacing a worker’s full earnings.

Fair Labor Standards Act (FLSA) Exemptions

Specific categories of employees (e.g., executive, administrative, professional workers meeting salary and duties tests, teachers, lawyers, doctors) who may be exempt from the federal minimum wage and overtime requirements.