Macro Chapter 15 - Unemployment

labor force

the total number of workers, including both the employed and the unemployed

unemployment rate

the percentage of the labor force that is unemployed

labor force participation rate

the percentage of the adult population that is in the labor forces

natural rate of unemployment

the normal rate of unemployment around which the unemployment rate fluctuates

cyclical unemployment

the deviation of unemployment from its natural rate

discouraged workers

individuals who would like to work but have given up looking for a job

frictional unemployment

unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills

Structural unemployment

unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one

job search

the process by which workers find appropriate jobs given their tastes and skills

unemployment insurance

a government program that partially protects workers’ incomes when they become unemployed

union

a worker association that bargains with employers over wages, benefits, and working conditions

collective bargaining

the process by which unions and firms agree on the terms of employment

strike

the organized withdrawal of labor from a firm by a union

efficiency wages

above equilibrium wages paid by firms to increase worker productivity