Unemployment and the BLS. Some Issues What do we mean by unemployment?

Unemployment and the BLS

Some Issues

• What do we mean by unemployment?

Some Issues

• What do we mean by unemployment?– What does the BLS mean by Unemployment?– What do economists mean by unemployment?

Some Issues


• Is unemployment a good thing?– Why a healthy economy has unemployment– The natural rate of unemployment

Some Issues


• Is unemployment a good thing?

• Unemployment and the Business Cycle

The BLS and Unemployment

• The Bureau of Labor Statistics (BLS) publishes monthly unemployment data.

• Interviews a sample of 60,000 workers.

Classification

• Employed (E)– worked at least one hour for pay last month.

• Voluntarily unemployed (VU)– not employed and not looking for work (including people in college, prisons, military, retired, stay-at-home mothers, etc.)

• Involuntarily unemployed (IU) – not employed and actively looking for work

The Unemployment Rate

• Civilian Labor Force (CLF)

• Unemployment Rate (U)

CLF = E + IU

IUE

IU

CLF

IUU

A Critique

• The Idea is good. We want to know the CLF and the percent unemployed.

• Excluding children and Voluntary Employed makes sense

• The BLS also makes seasonal adjustments.– Unadjusted U goes up in June and down in

December.

Some Issues

• Consider a worker who – Was fired for incompetence and now looking

for a comparable job. IU

Some Issues

• Consider a worker who – Quit to have a baby. VU

• Some Issues– Consider a worker who

• Took early retirement. Would like a new position that does not involve relocation. Knows that nothing local is available. IU

Some Issues

• Consider a worker who – Works during tourist season in a dude ranch

and draws unemployment compensation the rest of the year. IU

Some Issues

• Consider a worker who – Has a 15 hour a week job, but wants to get full

time employment. E

Some Issues

• Consider a worker who – Was laid off two months ago. Expects to be

rehired when demand picks up in a month or two. Doing repairs on the house. IU (Perhaps).

Some Issues

• Consider a worker who – Expects to graduate from college at the end of

the semester, but is in despair about the chances of getting a job then. VU

The Process

Involuntary Unemployed This MonthWorking This Month

Voluntary Unemployed This Month

Involuntary Unemployed Next MonthWorking Next Month

Voluntary Unemployed Next Month

U for different groups

Unemployment Data for Different Groups, 1999

All Races White Black Total 4.2% 3.7% 8.0% Males Total 4.1% 3.7% 8.2% 16-19 Years 14.7% 12.6% 30.9% 20 Years and Older 3.5% 3.0% 6.7% Females Total 4.3% 3.8% 7.8% 16-19 Years 13.2% 11.3% 25.1% 20 Years and Older 3.8% 3.3% 6.8%

U for different groups

Additional 1999 Unemployment Data

Experienced Wage and Salary Workers 4.0% Married Men, Spouse Present 2.2% Women who Maintain Families 6.4%

U for different nations

1998 Unemployment Rates for Different Countries

France 11.7 Japan 4.1 Germany 9.4 Italy 12.3 United Kingdom 6.3 Canada 8.3 United States 4.5

Unemployment and the BLS. Some Issues What do we mean by unemployment?

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