Module 12

Labor Force

The sum of employed, and unemployed.

Employed

Working part time or full time that is receiving a wage. This means if you are working to pay off your debt, you are not employed.

Labor Force participation rate

The percentage of the population aged 16 or older that works.

LFPR = Labor Force/Pop. 16>= * 100

Unemployed

When you are looking for a job without a job. If you are not looking for work, you are out of the labor force.

The unemployment has a direct correlation with inflation price.

When there are recessions the unemployment rate goes up.

Unemployment rate

The percentage of the total of people in the labor force who are unemployed.

UR = Numb. of Unemployed/Labor Force * 100

Can overstate the true level, because it takes into account those who are easily employable, but are unemployed because they are searching for the right job.

Can understate the true level.

• Discouraged workers
  
• Marginally attached workers
• Underemployment

Test questions:

During recessions, unemployment rate rose.

During periods of expansion, the unemployment rate falls.