Monitoring Employment

Monitoring Employment November-03-08 9:00 AM

Employment Rate = ( number employed / labour force )x 100 Unemployment Rate consists of those who are not working and are available for work = (Unemployed / Labour Force) x 100 Categories - Under 15 and those institutionalised - Homemakers - Labour force who are employed

Seasonally Adjusted Rate - eliminates short-term or seasonal unemployment Participation Rate - Labour force includes both the unemployed and employed, with the exception of military, students, and homemakers, the labour force is expressed as a percentage of the total employable population. = Total Labour Force / Total Employable Population x 100

Limitations of Employment Data Underemployment - Workers who are not at work at jobs that utilize their skills. Discouraged Workers - those who would like to work but have stopped looking because they believe nothing is available for them Hidden unemployed - underemployed, and discouraged refered to as hidden since they are not counted in the official unemployment rate

Types of Unemployment 6 MONTHS UNEMPLOYED, AFTER IS DISCOURAGED Frictional Unemployment - refers to short-term unemployment of those workers who presently between jobs or who are entering Seasonal Unemployment - is the result of climatic changes that may leave workers unemployed for specific periods of the year. Structural Employment - direct result of structural changes in the economy, ie industries disappearing. Such as  Technological Unemployment -the structural unemployment is identified the cause.  Replacement Unemployment - one of the costs that Canada and other industrial nations will face in moving to a global economy such as downsizing and structural employment changes Cyclical Unemployment - caused by upward swings and downward swings, caused by economic decline. Inadequate Demand Unemployment - declining demand during periods of economic slowdown, bank of Canada can contribute by raising interest.

Full Employment Full Employment - highest reasonable expectation of employment, referred to as the natural employment rate which includes frictional and structural unemployment and excludes cyclical and

Unit 2 Page 1

seasonal (unemployment rate is between 6-7%)

Costs of Unemployment Potential Output - GDP that can be potentially outputted with full employment Actual Output -The GDP that the economy actually outputs.

- Chronic unemployment can hurt both individual and the Canadian economy as a whole. There are human and economic costs associated with joblessness, especially unemployment lasting for extended periods of time. Cost of unemployment for the entire economy, is reflected by the GDP GAP. GDP GAP = GDP x ((unemployment rate - full employment) x2 ) 100 (Loss in National Production) OKUN`s LAW: When potential output exceeds actual output, the greater the GDP gap, for every 1% gain in unemployment, 2% gap in GDP

Unit 2 Page 2