Unit 11. The Unemployment IES Lluís de Requesens (Molins de Rei)‏ Batxillerat Social Economics (CLIL) – Innovació en Llengües Estrangeres Jordi Franch Parella

The unemployment The natural rate of unemployment is the unemployment that the economy normally experiences Cyclical unemployment is the fluctuation of unemployment around its natural rate. It is associated with ups and downs of the business cycle Structural unemployment is the mismatch between demand and supply of labour (minimum-wages, unions ...)‏

The Unemployement The labour force is the total number of workers, including both the employed and the unemployed Unemployment rate = Unemployed / Labour force x 100 Labour force participation = Labour force / Population 16-65 x 100 Labour force ocupation = Employed / Population 16-65 x 100

The Unemployment It is difficult to distinguish between a person who is unemployed and a person who is not in the labour force Discouraged workers, people who would like to work but have given up looking for jobs after an unsuccessful search, are not in unemployment statistics Other people may claim to be unemployed in order to receive subsidies, even though they are not looking for jobs

The Unemployment One of the most important problems of unemployment is that some workers are jobless for long periods of time In a flexible labour maket, wages would adjust to balance demand and supply of labour, ensuring that all workers were fully employed Minimum-wages prevent this adjustment The power of unions Efficiency wages