Unemployment Rate
An Unemployment Rate is a macro-economic measure of unemployed population (of unemployed persons) with respect to a worker population (in some labor market).
- Context:
- It can be calculated by subtracting the Natural Unemployment Rate (frictional + structural) and the Job Destruction Rate from the Job Creation Rate.
- It can range from being a Structural Unemployment Rate to being an Temporal Unemployment Rate.
- It can range from being be an Annual Unemployment Rate to being a (seasonally adjusted) Monthly Unemployment Rate.
- It can range from being a Civilian Unemployment Rate to being a Military Unemployment Rate.
- It can range from being a With-University Degree Unemployment Rate to being a Without-University Unemployment Rate.
- It can range from being a Short-Term Unemployment Rate to being a Long-Term Unemployment Rate.
- It can range from being a Low Unemployment Rate to being a High Unemployment Rate.
- It can be related to a Price Inflation Rate is a Phillips Curve.
- It can be related to a Job Vacancy Rate in a Beveridge Curve.
- It can be related to an Underemployment Rate.
- It can be related to an Unemployment Benefit Claim Rate.
- It can contain a Long-Term Unemployment Rate.
- …
- Example(s):
- a Natural Unemployment Rate.
- a Global Unemployment Rate.
- a Regional Unemployment Rate, such as a US unemployment rate or a China unemployment rate.
- …
- Counter-Example(s):
- See: Ratio, Active Population, Unemployment Cause.
References
2015
- (Wikipedia, 2015) ⇒ http://en.wikipedia.org/wiki/unemployment#Measurement Retrieved:2015-6-21.
- There are also different ways national statistical agencies measure unemployment. These differences may limit the validity of international comparisons of unemployment data. [1] To some degree these differences remain despite national statistical agencies increasingly adopting the definition of unemployment by the International Labour Organization.[2] To facilitate international comparisons, some organizations, such as the OECD, Eurostat, and International Labor Comparisons Program, adjust data on unemployment for comparability across countries. Though many people care about the number of unemployed individuals, economists typically focus on the unemployment rate. This corrects for the normal increase in the number of people employed due to increases in population and increases in the labour force relative to the population. The unemployment rate is expressed as a percentage, and is calculated as follows: : [math]\displaystyle{ \text{Unemployment rate}=\frac{\text{Unemployed workers}}{\text{Total labor force}} * 100\% }[/math] As defined by the International Labour Organization, "unemployed workers" are those who are currently not working but are willing and able to work for pay, currently available to work, and have actively searched for work. [3] Individuals who are actively seeking job placement must make the effort to: be in contact with an employer, have job interviews, contact job placement agencies, send out resumes, submit applications, respond to advertisements, or some other means of active job searching within the prior four weeks. Simply looking at advertisements and not responding will not count as actively seeking job placement. Since not all unemployment may be "open" and counted by government agencies, official statistics on unemployment may not be accurate. In the United States, for example, the unemployment rate does not take into consideration those individuals who are not actively looking for employment, such as those still attending college. [4] The ILO describes 4 different methods to calculate the unemployment rate: [5] * Labour Force Sample Surveys are the most preferred method of unemployment rate calculation since they give the most comprehensive results and enables calculation of unemployment by different group categories such as race and gender. This method is the most internationally comparable. * Official Estimates are determined by a combination of information from one or more of the other three methods. The use of this method has been declining in favor of Labour Surveys. * Social Insurance Statistics such as unemployment benefits, are computed base on the number of persons insured representing the total labour force and the number of persons who are insured that are collecting benefits. This method has been heavily criticized due to the expiration of benefits before the person finds work.
... The primary measure of unemployment, U3, allows for comparisons between countries. Unemployment differs from country to country and across different time periods. For example, during the 1990s and 2000s, the United States had lower unemployment levels than many countries in the European Union, [6] which had significant internal variation, with countries like the UK and Denmark outperforming Italy and France. However, large economic events such as the Great Depression can lead to similar unemployment rates across the globe.
- There are also different ways national statistical agencies measure unemployment. These differences may limit the validity of international comparisons of unemployment data. [1] To some degree these differences remain despite national statistical agencies increasingly adopting the definition of unemployment by the International Labour Organization.[2] To facilitate international comparisons, some organizations, such as the OECD, Eurostat, and International Labor Comparisons Program, adjust data on unemployment for comparability across countries. Though many people care about the number of unemployed individuals, economists typically focus on the unemployment rate. This corrects for the normal increase in the number of people employed due to increases in population and increases in the labour force relative to the population. The unemployment rate is expressed as a percentage, and is calculated as follows: : [math]\displaystyle{ \text{Unemployment rate}=\frac{\text{Unemployed workers}}{\text{Total labor force}} * 100\% }[/math] As defined by the International Labour Organization, "unemployed workers" are those who are currently not working but are willing and able to work for pay, currently available to work, and have actively searched for work. [3] Individuals who are actively seeking job placement must make the effort to: be in contact with an employer, have job interviews, contact job placement agencies, send out resumes, submit applications, respond to advertisements, or some other means of active job searching within the prior four weeks. Simply looking at advertisements and not responding will not count as actively seeking job placement. Since not all unemployment may be "open" and counted by government agencies, official statistics on unemployment may not be accurate. In the United States, for example, the unemployment rate does not take into consideration those individuals who are not actively looking for employment, such as those still attending college. [4] The ILO describes 4 different methods to calculate the unemployment rate: [5] * Labour Force Sample Surveys are the most preferred method of unemployment rate calculation since they give the most comprehensive results and enables calculation of unemployment by different group categories such as race and gender. This method is the most internationally comparable. * Official Estimates are determined by a combination of information from one or more of the other three methods. The use of this method has been declining in favor of Labour Surveys. * Social Insurance Statistics such as unemployment benefits, are computed base on the number of persons insured representing the total labour force and the number of persons who are insured that are collecting benefits. This method has been heavily criticized due to the expiration of benefits before the person finds work.
2013
- (Elsby et al., 2013) ⇒ Michael WL Elsby, Bart Hobijn, and Ayşegül Şahin. (2013). “Unemployment Dynamics in the OECD.” In: Review of Economics and Statistics Journal, 95(2). doi:10.1162/REST_a_00277
- QUOTE: Unemployment rates among developed economies have varied substantially both across time and across countries over the last 40 years. This variation in unemployment may occur as a result of variation in the rate at which workers flow into the unemployment pool, variation in the rate at which unemployed workers exit the unemployment pool, or a combination of the two.
2012
- http://en.wikipedia.org/wiki/Unemployment
- QUOTE: 'Unemployment (or joblessness), as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks.[7] The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. In a 2011 news story, BusinessWeek reported, "More than 200 million people globally are out of work, a record high, as almost two-thirds of advanced economies and half of developing countries are experiencing a slowdown in employment growth," the group said.
There remains considerable theoretical debate regarding the causes, consequences and solutions for unemployment. Classical economics, neoclassical economics and the Austrian School of economics argue that market mechanisms are reliable means of resolving unemployment.[citation needed] These theories argue against interventions imposed on the labour market from the outside, such as unionization, minimum wage laws, taxes, and other regulations that they claim discourage the hiring of workers. Keynesian economics emphasizes the cyclical nature of unemployment and recommends interventions it claims will reduce unemployment during recessions. This theory focuses on recurrent supply shocks that suddenly reduce aggregate demand for goods and services and thus reduce demand for workers. Keynesian models recommend government interventions designed to increase demand for workers; these can include financial stimuli, publicly funded job creation, and expansionist monetary policies. Georgists, half a century before Keynes, also noted the cyclical nature but focused on the role of speculation in land which pushes up economic rent. Economic activity cannot be sustained in the rent bubble because rent must be paid mostly from wages (yield of labor) as well as from interest (yield of capital). Once the speculation is wrung out of system the cycle of land speculation begins again.[8] Henry George therefore advocated the taxation of land values (Single Tax) to stop land speculation and in order to eliminate taxation of labor and capital. George opposed land nationalization and Marx's theories. Marxism focuses on the relations between the owners and the workers, whom, it claims, the owners pit against one another in a constant struggle for jobs and higher wages. The unemployment produced by this struggle is said to benefit the system by reducing wage costs for the owners. For Marxists the causes of and solutions to unemployment require abolishing capitalism and shifting to socialism or communism.
In addition to these three comprehensive theories of unemployment, there are a few categorizations of unemployment that are used to more precisely model the effects of unemployment within the economic system. The main types of unemployment include structural unemployment which focuses on structural problems in the economy and inefficiencies inherent in labour markets including a mismatch between the supply and demand of laborers with necessary skill sets. Structural arguments emphasize causes and solutions related to disruptive technologies and globalization. Discussions of frictional unemployment focus on voluntary decisions to work based on each individuals' valuation of their own work and how that compares to current wage rates plus the time and effort required to find a job. Causes and solutions for frictional unemployment often address barriers to entry and wage rates. Behavioral economists highlight individual biases in decision making and often involve problems and solutions concerning sticky wages and efficiency wages.
- QUOTE: 'Unemployment (or joblessness), as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks.[7] The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. In a 2011 news story, BusinessWeek reported, "More than 200 million people globally are out of work, a record high, as almost two-thirds of advanced economies and half of developing countries are experiencing a slowdown in employment growth," the group said.
- ↑ International Unemployment Rates: How Comparable are They?" by Constance Sorrentino, Monthly Labor Review, June 2000, pp. 3–20.
- ↑ International Labour Organization Bureau of Statistics Measurement of employment, unemployment and underemployment – Current international standards and issues in their application. Retrieved August 2010
- ↑ International Labour Organization, Bureau of Statistics,The Thirteenth International Conference of Labour Statisticians, received 21 July 2007
- ↑ Coy, P. (11 September 2012). U.S. jobless rate drops for the worst of all reasons. Businessweek.com, 5. Retrieved from http://search.ebscohost.com/
- ↑ International Labour Organization, LABORSTA,[1]. Retrieved 22 July 2007.
- ↑ Schmitt, John; Rho, Hye Jin; Fremstad, Shawn. U.S. Unemployment Now As High as Europe. Center for Economic and Policy Research. May 2009.
- ↑ "International Labour Organization: Resolution concerning statistics of the economically active population, employment, unemployment and underemployment, adopted by the Thirteenth International Conference of Labor Statisticians (October 1982); see page 4; accessed November 26, 2007" (PDF). http://www.ilo.org/public/english/bureau/stat/download/res/ecacpop.pdf.
- ↑ George, Henry. Progress and Poverty 1879.
2001
- http://www.bls.gov/bls/glossary.htm#U
- QUOTE: The unemployment rate represents the number unemployed as a percent of the labor force.