Download Unemployment

© 2007 Thomson South-Western
IDENTIFYING UNEMPLOYMENT
• How Is Unemployment Measured?
- Categories of Unemployment
• The problem of unemployment is usually divided into
two categories, the long-run problem (長期失業) and the
short-run problem (短期失業).
• The natural rate of unemployment (自然失業率).
• The cyclical rate of unemployment (短期失業率).
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How is Unemployment Measured?
• Natural Rate of Unemployment
- The natural rate of unemployment is unemployment
that does not go away on its own even in the long
run.
- It is the amount of unemployment that the economy
normally experiences.
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Natural rate of unemployment in OECD
countries
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How Is Unemployment Measured?
• Cyclical Unemployment
- Cyclical unemployment refers to the year-to-year
fluctuations in unemployment around its natural
rate.
- It is associated with with short-term ups and downs
of the business cycle.
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How Is Unemployment Measured?
• Unemployment is measured by the Bureau of
Labor Statistics (BLS).
• It surveys 60,000 randomly selected households
every month.
• The survey is called the
Current Population Survey.
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How Is Unemployment Measured?
• Based on the answers to the survey questions,
the BLS places each adult into one of three
categories:
- Employed
- Unemployed
- Not in the labor force
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How Is Unemployment Measured?
• Employed vs. unemployed
- The BLS considers a person an adult if he or she is over 16
years old.
- A person is considered employed if he or she has spent some
of the previous week working at a paid job.
- A person is unemployed if he or she is on temporary layoff,
is looking for a job, or is waiting for the start date of a new
job.
- A person who fits neither of these categories, such as a fulltime student, homemaker, or retiree, is not in the labor force.
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How Is Unemployment Measured?
• Labor Force
- The labor force is the total number of workers,
including both the employed and the unemployed.
- The BLS defines the labor force as the sum of the
employed and the unemployed.
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How Is Unemployment Measured?
• Describing Unemployment: Three Basic
Questions
- How does government measure the economy’s rate
of unemployment?
- What problems arise in interpreting the
unemployment data?
- How long are the unemployed typically without
work?
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The Breakdown of the Population in 2004
Employed
(139.3 million)
Labor Force
(147.4 million)
Adult
Population
(223.4 million)
Unemployed (8.1 million)
Not in labor force
(76.0 million)
© 2007 Thomson South-Western
How Is Unemployment Measured?
• The unemployment rate （失業率） is
calculated as the percentage of the labor force
that is unemployed.
© 2007 Thomson South-Western
How Is Unemployment Measured?
• The labor-force participation rate （勞動參與
率）is the percentage of the adult population
that is in the labor force.
Labor force participation rate
Labor force X
=
100
Adult population
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Unemployment Rate Since 1960
Percent of
Labor Force
10
Unemployment rate
8
6
Natural rate of
unemployment
4
2
0
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
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The Labor-Market Experiences of
Various Demographic Groups
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Labor Force Participation Rates for Men
and Women Since 1950
Labor-Force
Participation
Rate (in percent)
100
80
Men
60
40
Women
20
0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
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台灣勞動力的分類
© 2007 Thomson South-Western
• 民間勞動力：
指在資料標準週內年滿15歲可以工作之民間人口，包括就業
者及失業者。
• 就業者：
指在資料標準週內年滿15歲從事有酬工作者，或從事15小時
以上之無酬家屬工作者。
• 失業者：
指在資料標準週內年滿15歲同時具有下列條件者：
(1) 無工作；(2) 隨時可以工作；(3) 正在尋找工作或已找工
作在等待結果。此外，尚包括等待恢復工作者及找到職業而
未開始工作亦無報酬者。
© 2007 Thomson South-Western
• 非勞動力：
指在資料標準週內，年滿15歲不屬於勞動力之民間人
口，包括因就學、料理家務、高齡、身心障礙、想工
作而未找工作且隨時可以開始工作及其他原因等而未
工作亦未找工作者。
• 勞動力參與率：勞動力占15歲以上民間人口之比率。
• 失業率：失業者占勞動力之比率。
© 2007 Thomson South-Western
失業率計算標準
• 我國目前失業人口之定義，係參採國際勞工組織（ILO）之
規定，與世界主要國家所公布之失業率定義相同，即凡在
資料標準週內，年滿15歲，同時具有(1)無工作；(2)隨時可
以工作；(3)正在尋找工作（尋找工作的方法包括託親友師
長介紹、向私立就業服務機構求職、應徵廣告、招貼、向
公立就業服務機構求職、參加政府考試分發等）或等待工
作結果等三項條件者，謂之失業人口，此外，尚包括等待
恢復工作者及找到職業而未開始工作亦無報酬者。
© 2007 Thomson South-Western
• 前述失業人口定義中第(3)項條件「正在尋找工作」，常被
廣義解釋為「有工作意願」即可，甚且被完全忽略，導致
「失業」認定標準不一，此或為外界質疑我國失業水準偏
低之關鍵。由於「想工作而未找工作且隨時可以開始工作
者」並無找工作之實際行動，依前揭失業定義應視為非勞
動力而不屬失業者，惟為完整呈現勞動力運用狀況，主計
處亦按月將「想工作而未找工作且隨時可以開始工作者」
併入失業人口計算「廣義失業率」。
© 2007 Thomson South-Western
台灣失業率: 1982-2009
7%
6%
5%
4%
3%
2%
1%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
© 2007 Thomson South-Western
© 2007 Thomson South-Western
• 男性勞動者參與率下降的原因
─ 男性勞動者在學受教時間變長
─ 男性勞動者退休時間提前
─ 男性勞動者負起在家照顧子女的比率上升
• 女性勞動者參與率上升的原因
─ 技術創新使得女性勞動者花費在家庭生產活動
的時間比率下降
─ 子女數目減少
─ 社會對女性參與勞動市場價值觀念改變
© 2007 Thomson South-Western
Does the Unemployment Rate Measure
What We Want It To?
• It is difficult to distinguish between a person
who is unemployed and a person who is not in
the labor force.
• Discouraged workers, people who would like to
work but have given up looking for jobs after an
unsuccessful search, don’t show up in
unemployment statistics.
• Other people may claim to be unemployed in order
to receive financial assistance, even though they
aren’t looking for work.
© 2007 Thomson South-Western
Alternative Measures of Labor Utilization
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Unemployment rate and price level
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Inflation rate and unemployment rate
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How Long Are the Unemployed without
Work?
• Most spells of unemployment are short.
• Most unemployment observed at any given
time is long-term.
• Most of the economy’s unemployment problem
is attributable to relatively few workers who are
jobless for long periods of time.
© 2007 Thomson South-Western
Why Are There Always Some People
Unemployed?
• In an ideal labor market, wages would adjust to
balance the supply and demand for labor,
ensuring that all workers would be fully
Labor Supply
employed. Wage
WE
Labor Demand
QE
Quantity of labor
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Why Are There Always Some People
Unemployed?
• Frictional unemployment （摩擦性失業）
refers to the unemployment that results from the
time that it takes to match workers with jobs.
• In other words, it takes time for workers to search
for the jobs that are best suit their tastes and skills.
• Structural unemployment （結構性失業）is
the unemployment that results because the
number of jobs available in some labor markets
is insufficient to provide a job for everyone
who wants one.
© 2007 Thomson South-Western
A JOB SEARCH MODEL
• People allocate their time to three major
economic activities: work, leisure, and job
research.
• Some people specialize in job search, that is,
they spend all of their non-leisure time in job
search. These job searchers are interesting to
us because they will be recorded as
unemployed.
© 2007 Thomson South-Western
A JOB SEARCH MODEL
• Job search is the process by which workers
find appropriate jobs given their tastes and
skills.
• It results from the fact that it takes time for
qualified individuals to be matched with
appropriate jobs.
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A JOB SEARCH MODEL
• This unemployment is different from the other
types of unemployment.
• It is not caused by a wage rate higher than
equilibrium.
• It is caused by the time
spent searching for the
“right” job.
© 2007 Thomson South-Western
A JOB SEARCH MODEL
• The average real wage rate is a part of the
opportunity cost of job search. The higher
average real wage rate the higher would be the
opportunity cost of job search activity.
• The real wage rate that would be obtained
from the best job that could be found after an
appropriate search process in part of benefit
from job search. The higher the average real
wage rate the higher that benefit will be.
© 2007 Thomson South-Western
A JOB SEARCH MODEL
• Assume that the ratio of costs to benefits stays
constant and the fraction of the labor force
engaged in full time job search activity
remains constant as the real wage rate rises.
• The larger the labor force the more people will
be engaged in full-time search activities.
• Hence the number of people engaged in job
search activity will rise as the real wage rate
rises.
© 2007 Thomson South-Western
A JOB SEARCH MODEL
Wage
supply of job
search
W0
B
J0
J
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A JOB SEARCH MODEL
• The labor force is defined as the supply of
labor plus the supply of job search.
• The supply of labor is defined as the number
of people who, at a given real wage rate, are
willing to supply their labor services to a full
job immediately without further search.
© 2007 Thomson South-Western
A JOB SEARCH MODEL L
s
Wage
D
Labor force
W1
A
WE
B
C
LD
0
NE
LE
N,L
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A JOB SEARCH MODEL
• If the real wage rate was WE , the supply of
labor will be NE and the labor force would be
LE. That is, at WE the number of people who
engage in job search in LE – NE.
• If the real wage rate was marginally below WE,
the last person to become employed at NE
would quit and begins to search for a job.
Hence the distance AC measures the value that
this marginal worker places on job search.
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A JOB SEARCH MODEL
• At WE, the person at LE feels that it is just
worth while searching for a job. The value that
this person places on job search is the distance
DB. Hence W1 would be necessary to induce
this person to actually accept a job without
further search.
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A JOB SEARCH MODEL
• Given the labor demand curve LD, WE will be
the equilibrium real wage rate.
• There will always be a certain number of
people searching for jobs due to incomplete
information about job opportunities.
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A JOB SEARCH MODEL
• An increase in the income while unemployed
motivates job seekers to raise their value
placed on job search (the distance DB). Hence,
for a group workers, the job finding rate falls,
and the expected duration of unemployment
increases.
• A favorable shock to firm’s production
functions causes a rightward shift in LD. The
last person to become employment at NE .
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Ls’
Ls
(1)
Labor force
Wage
(2)
W’ E
WE
A’
A
B
LD
0
N’E NE
LE
L’E
N,L
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• A more generous program of unemployment
insurance make more people stay longer in job
search activity, which cause the left-ward shift
in labor supply curve (1).
• A more generous program of unemployment
insurance attract more people to enter the labor
force, which cause the right-ward shift in labor
force curve (2).
© 2007 Thomson South-Western
• In equilibrium,
- real wage rate increases: wE  wE ,
- the total number of employment decrease:
N E  N E ,
- and the number of unemployment increases:
LE  NE  LE  N E
© 2007 Thomson South-Western
Why Some Frictional Unemployment Is
Inevitable
• Search unemployment is inevitable because the
economy is always changing.
• Changes in the composition of demand among
industries or regions are called sectoral shifts.
• It takes time for workers to search for and find
jobs in new sectors.
© 2007 Thomson South-Western
Public Policy and Job Search
• Government programs can affect the time it
takes unemployed workers to find new jobs.
• These programs include the following:
• Government-run employment agencies
• Public training programs
• Unemployment insurance
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Public Policy and Job Search
• Government-run employment agencies give out
information about job vacancies in order to
match workers and jobs more quickly.
• Public training programs aim to ease the
transition of workers from declining to growing
industries and to help disadvantaged groups
escape poverty.
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Public Policy and Job Search
• Unemployment insurance is a government
program that partially protects workers’
incomes when they become unemployed.
• Offers workers partial protection against job
losses.
• Offers partial payment of former wages for a
limited time to those who are laid off.
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Public Policy and Job Search
• Unemployment insurance
• increases the amount of search unemployment.
• reduces the search efforts of the unemployed.
• may improve the chances of workers being matched
with the right jobs.
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Public Policy and Job Search
• Structural unemployment occurs when the
quantity of labor supplied exceeds the quantity
demanded.
• Structural unemployment is often thought to
explain longer spells of unemployment.
• Why is there Structural Unemployment?
• Minimum-wage laws
• Unions
• Efficiency wages
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MINIMUM-WAGE LAWS
• When the minimum wage is set above the level
that balances supply and demand, it creates
unemployment.
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Figure 4 Unemployment from a Wage
Above the Equilibrium Level
Wage
Labor
supply
Surplus of labor =
Unemployment
Minimum
wage
WE
Labor
demand
0
LD
LE
LS
Quantity of
Labor
© 2007 Thomson South-Western
UNIONS AND COLLECTIVE
BARGAINING
• A union is a worker association that bargains
with employers over wages, benefits and
working conditions.
• In the 1940s and 1950s, when unions were at
their peak, about a third of the U.S. labor force
was unionized.
• A union is a type of cartel attempting to exert
its market power.
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UNIONS AND COLLECTIVE
BARGAINING
• The process by which unions and firms agree
on the terms of employment is called collective
bargaining.
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UNIONS AND COLLECTIVE
BARGAINING
• A strike will be organized if the union and the
firm cannot reach an agreement.
– A strike occurs when the union organizes a
withdrawal of labor from the firm.
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UNIONS AND COLLECTIVE
BARGAINING
• A strike makes some workers better off and
other workers worse off.
• Workers in unions (insiders) reap the benefits
of collective bargaining, while workers not in
the union (outsiders) bear some of the costs.
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UNIONS AND COLLECTIVE
BARGAINING
• By acting as a cartel with ability to strike or
otherwise impose high costs on employers,
unions usually achieve above-equilibrium
wages for their members.
• Union workers earn 10 to 20 percent more than
nonunion workers.
© 2007 Thomson South-Western
Are Unions Good or Bad for the
Economy?
• Critics argue that unions cause the allocation of
labor to be inefficient and inequitable.
• Wages above the competitive level reduce the
quantity of labor demanded and cause
unemployment.
• Some workers benefit at the expense of other
workers.
© 2007 Thomson South-Western
Are Unions Good or Bad for the
Economy?
• Advocates of unions contend that unions are a
necessary antidote to the market power of firms
that hire workers.
• They claim that unions are important for
helping firms respond efficiently to workers’
concerns.
© 2007 Thomson South-Western
The Natural Unemployment Rate
• Let N be the number of people employed, and
U be the number unemployed.
• Assume that the labor force ( LF  N  U ) does not
change over time.
s
U
N
f
© 2007 Thomson South-Western
• f is the job finding rate and s is the job
separation rate. Then the change in the number
employed during a period N  is given by
N = fU  sN .
© 2007 Thomson South-Western
• fU is the number of unemployed who find jobs
during a period, while sN is the number of
employed who lose jobs.
• Natural rate of unemployment is determined by
N = 0 :
fU = sN ,
and using the condition that labor force is fixed at
F
F , we find that
fU
=
sN
=
s
L
U .
L


© 2007 Thomson South-Western
Solving this equation for U gives
s
U =L 
s f
F
f
N=L 
s f
F
therefore the natural rate of unemployment is
U
s
Un =
=
U N s f
© 2007 Thomson South-Western
The Determinants of Natural Unemployment
Rate
• Unemployment Insurance.
- The existence of unemployment insurance
makes the unemployed who are receiving
benefits less eager to accept jobs or leave the
labor force.
- The unemployment insurance makes the
employed persons who will be eligible for
benefits more willing to accept job separation.
© 2007 Thomson South-Western
- A more generous program of unemployment
insurance lends to a higher natural rate of
unemployment.
• The Minimum Wage
- A higher minimum wage reduces the incentive
of employers to hire low productivity workers
in sectors covered by the minimum wage.
- While the adverse effect of the minimum
wage on the employment of low productivity
worker is clear, the effect on the
unemployment these worker depends also on
the response of labor force participation.
© 2007 Thomson South-Western
THE THEORY OF EFFICIENCY
WAGES
• Efficiency wages are above-equilibrium wages
paid by firms in order to increase worker
productivity.
• The theory of efficiency wages states that
firms operate more efficiently if wages are
above the equilibrium level.
© 2007 Thomson South-Western
THE THEORY OF EFFICIENCY
WAGES
• A firm may prefer higher than equilibrium
wages for the following reasons:
– Worker health: Better paid workers eat a better diet and
thus are more productive.
– Worker turnover: A higher paid worker is less likely to
look for another job.
– Worker quality: Higher wages attract a better pool of
workers to apply for jobs.
– Worker effort: Higher wages motivate workers to put
forward their best effort.
© 2007 Thomson South-Western
Summary
• The unemployment rate is the percentage of
those who would like to work but don’t have
jobs.
• The Bureau of Labor Statistics calculates this
statistic monthly.
• The unemployment rate is an imperfect
measure of joblessness.
© 2007 Thomson South-Western
Summary
• In the U.S. economy, most people who become
unemployed find work within a short period of
time.
• Most unemployment observed at any given
time is attributable to a few people who are
unemployed for long periods of time.
© 2007 Thomson South-Western
Summary
• One reason for unemployment is the time it
takes for workers to search for jobs that best
suit their tastes and skills.
• A second reason why our economy always has
some unemployment is minimum-wage laws.
• Minimum-wage laws raise the quantity of
labor supplied and reduce the quantity
demanded.
© 2007 Thomson South-Western
Summary
• A third reason for unemployment is the market
power of unions.
• A fourth reason for unemployment is
suggested by the theory of efficiency wages.
• High wages can improve worker health, lower
worker turnover, increase worker effort, and
raise worker quality.
© 2007 Thomson South-Western