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).
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.
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.
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.
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
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 full-time student, homemaker, or retiree, is not in the labor force.
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.
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?
Employed Labor Force (139.3 million) (147.4 million) Adult Population (223.4 million) Unemployed (8.1 million) Not in labor force (76.0 million) The Breakdown of the Population in 2004
How Is Unemployment Measured? • The unemployment rate（失業率） is calculated as the percentage of the labor force that is unemployed.
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 forc e particip ation rate Labor forc e = 100 X Adult popu lation
Unemployment rate Natural rate of unemployment Unemployment Rate Since 1960 Percent of Labor Force 10 8 6 4 2 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Labor Force Participation Rates for Men and Women Since 1950 Labor-Force Participation Rate (in percent) 100 Men 80 60 40 Women 20 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
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。
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。
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。
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
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.
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.
Labor Supply WE Labor Demand QE 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 employed. Wage Quantity of labor
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.
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.
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.
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.
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.
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.
A JOB SEARCH MODEL Wage supply of job search W0 B J0 J
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.
A JOB SEARCH MODEL Ls Wage D Labor force W1 A WE B C LD 0 NE LE N,L
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.
A JOB SEARCH MODEL • At WE, the person at LEfeels 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.
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.
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 .
Ls’ Ls (1) Labor force Wage (2) A’ W’ E WE B A LD L’E 0 N’E N,L LE NE
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).
In equilibrium, - real wage rate increases: , - the total number of employment decrease: - and thenumberofunemployment increases:
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.