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Module 1: Unemployment - Coggle Diagram
Module 1: Unemployment
Unemployment Definition Cost and Data
Defintion
Those who are willing and able to work who don't have a job
Cost
Personal
Lowers GDP
Lowers Family Wealth
Data
Unemployment rises during recessions and peaks at the end of recession
Different Labor Populations
Labor Force
Unemployed + employed
allows us to understand who is willing to work
Underemployed, marginally attached, and discouraged
Underemployed rate can show a better picture as it includes part time, marginally attached, and discouraged workers
Measures of Labor Market Health
Unemployment Rate
One limitation is that it fails to account for discouraged workers
Unemployment Variation
Can have variation between different areas, ages, and education levels meaning that it is important to consider specific areas rather than just looking at broad unemployment
Underemployment Rates
Underemployed/Employed + Underemployed
Labor Force Participation Rate + Employment Population Ratio
LFPR used in conjunction with unemployment rate to see if discouraged workers is causing unemployment rate to decline
EPR advantage is that it is a simple figure with almost no drawbacks
Different Types of Unemployment
Frictional
between jobs
Seasonal
employed based on the season
Cyclical
Due to recessions - not naturally occurring
Unemployment Duration
longer duration Causes more competition due to new grads entering the labor market
Full Employment
when unemployment rate = natural unemployment rate (no cyclical)
Structural
some structure changes so that people who had skills for something is no longer needed so they need to acquire new skills for a new job
typically longer unemployment due to having to learn new skills