Job rationing: excess supply keeps the wage high

1 minimum wage

2 Labor unions (outsider effect)

3 efficency wages

Jod Search:

1 Frictional unemployment: small percent will always be leaving lobs and looking for work because the economy is dynamic and it takes time for people to find new jobs.

unemployment is related ot GDP: when GDP is above the natural rate unemployment should be below the natural rate.

Payroll tax: payed by the employer, lowers the real wage

natural unemployment rate: the unemployment rate that exists in normal times, when there is neither a recession nor a boom and real GDP is equal to potential GDP.

cyclical unemployment rate: moves with the flow of the economy: unemployment due to recession, when the rate of unemployment is above the natural rate of unemployment

frictional unemployment: short term unemployment due to normal turnover in the labor market, such as when people change occupations or locations, or are new entrants.

structural unemployment: long term unemployment due to structural problems such as poor skills or long term changes in demand or insufficient work incentives

current population survey: a monthly survey sample of US households done by the US census bureau. measures: unemployment, employment, the labor force, and other characteristics of the US population.

labor force: all those who are either employed or unemployed, must be 16 and looking for work

working age population: persons over 16 years of age who are not in an institution such as jail or hospital

part-time worker: someone who works between 1 and 34 hours per week

unemployment rate: the ratio (usually expressed as a percentage) of unemployed workers to the labor force.

labor force participation rate: the ratio, usually expressed as a percentage, of people in the labor force to the working age population.

employment to population ratio: the ratio of employed workers to the working age population

aggegrate hours: the total number of hours worked by all workers in the economy in a given period of time

job losers: people who are unemployed because they lost their previous job.

job leavers: people who are unemployed because they quit their previous job

new entrants: people who are unemployed because they just entered the labor force and are still looking for work

job vacancies: position that firm are trying to fill, but for which they have yet to find suitable workers

seasonal unemployment: unemployment that varies with the seasons of the year due to seasonal fluctuations in supply or demand for labor

labor demand curve: a downward sloping relationship showing the quantity of labor firms are willing to hire at each wage

labor supply curve: the relationship showing the quantity of labor workers are willing to supply at each wage level

real wage: the nominal wage adjusted for inflation, it is calculated by dividing the wage by the price level = Nominal wage / Price level or (gdp deflator)

price level: the average level of prices in the economy. often called the GDP deflator.

job search: reason for unemployment in which uncertainty in the labor market and workers limited information requires people to spend time searching for a job.

job rationing: a reason for unemployment in which the quantity of labor supplied is greater than the quantity of labor demanded

minimum wage: a wage per hour below which it is illegal to pay workers

insider: a person who already works for a firm and has some influence over wage and hiring policy

outsider: someone who is not working for a particular firm, making it difficult for him or her to get a job with that firm even though he or she is willing to work for a lower wage

efficiency wage: a wage higher than that which would equate quantity supplied and quantity demanded set by employers in order to increase worker efficiency,