Chapter 20

Economics 210 with Bueckman at University of Tennessee - Knoxville

About this deck

By: Samantha Garner
Textbook:

Essentials of Economics
Created: 2010-12-03
Size: 30 flashcards
Views: 61

About StudyBlue

STUDYBLUE makes things that make you better at school. Things like online flashcards with photos and audio. Things like personalized quizzes and friendly reminders about when (and what) to study next. Think of it as a digital backpack™: access to all of your study materials online and on your phone. STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.

“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy

Sign up (free) to study this.

Labor force Statistics

Produced by Bureau of Labor Statistics

Based on regular survey of 60000households

Based on population 16+

BLS divides population into 3 groups

Employed

Unemployed

Not in Labor Force

Employed

Paid employees

self employed

unpaid workers in a family business

Unemployed

People not working who have looked for work during previous four weeks

Labor force

total number of workers including employed and unemployed

Unemployment rate

Percent of the labor force that is unemployed

100(# of unemployed/ labor force)

Labor force participation rate

percent of the adult population that is in the labor force

100(labor force/adult population)

The unemployment rate in not a perfect indicator of joblessness or health of the labor maket because it

excludes discouraged workers

Does not distinguish between full and part time

Misreports

natural rate of unemployment

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

cyclical unemployment

the deviation of unemployment from its natural rate

associated with business cycles

frictional unemployment

occurs when workers spend time searching for the jobs that best suit their skills and tastes

usually short term

structural unemployment

occurs when there are fewer jobs than workers

usually longer term

result of "sticky wages"

Job Search

the process of matching workers with appropriate jobs

Sectoral shifts

changes in the composition of demand across industries or regions of the country

Gov't employment agencies

give out information about job vacancies to speed up the matching of workers with jobs

Public training programs

aim to equip workers displaced from declining industries with the skills needed in growing industries

Unemployment insurance

a gov't program that partially protects workers' incomes when they become unemployed

Unemployment insurance increases frictional unemployment because

the benefits end when when a worker takes a job

Benefits of unemployment insurance

Reduces uncertainty over incomes

Gives the unemployed more time to search resulting in better job matches and thus higher productivity

Structural unemployment occurs when wage is

kept above the eq'm

What are three reasons for structuarl unemployment?

Minimum-wage laws

Unions

Efficiency wages

Minimum wage laws

the minimum wage may exceed the eq'm wage for the least skilled or experienced workers

Union

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

Exert market power to negotiate higher wages for workers

A typical union worker earns 20% higher wages and gets more benefits

"Insiders"

Workers who remain employed; they are better off

Outsiders

workers who lose their jobs; They are worse off

Non-unionized labor markets

Increase labor supply and reduce wages

Advantages of a Union

counter the market power of large firms, make firms more responsive to workers concerns

Disadvantages of a Union

Unions are cartels; they raise wages above eq'm which causes unemployment and/or depresses wages in non-union labor markets

Efficiency wages

Firms voluntarily pay above eq'm wages to boost worker productivity

4 reasons firms might pay efficiency wages

worker health

worker turnover

worker quality

worker effort

About this deck

By: Samantha Garner
Textbook:

Essentials of Economics
Created: 2010-12-03
Size: 30 flashcards
Views: 61

About StudyBlue

“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy