New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

ECON111 Macroeconomics Chapter 15 Notes

by: Lauren Heller

ECON111 Macroeconomics Chapter 15 Notes Econ 111

Marketplace > University of Alabama - Tuscaloosa > Econ 111 > ECON111 Macroeconomics Chapter 15 Notes
Lauren Heller
GPA 4.0

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These notes were taken from the professors lecture and cover chapter 15.
Kent 0. Zirlott
Class Notes
EC111, econ111, Econ, Macroeconmics, Macro, Economics, Chapter 15
25 ?




Popular in Macroeconomics

Popular in Department

This 4 page Class Notes was uploaded by Lauren Heller on Wednesday March 2, 2016. The Class Notes belongs to Econ 111 at University of Alabama - Tuscaloosa taught by Kent 0. Zirlott in Fall 2016. Since its upload, it has received 31 views.


Reviews for ECON111 Macroeconomics Chapter 15 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 03/02/16
Macro – Chapter 15 Notes  Labor Force Statistics:  Produced by the Bureau of Labor Statistics (BLS) in the U.S. Department of Labor  Based on regular survey of 60,000 households  Based on “adult population” (16 years an older)  How the labor force is divided:  Employed- paid employees, self-employed, and unpaid workers in a family business, full time and part-time workers, and those not working because of a temporary absence from a job (vacation, health, seasonal)  Unemployed- people not working who have looked for work during previous 4 weeks, also includes temporary lay offs who are waiting to be recalled to a job  Not in the labor force- everyone else (minors, retirees, inmates, full time students, disabled, discouraged workers, illegal immigrants)  The labor force- is the total number of workers, including the employed and unemployed  Unemployed rate- percent of the labor force that is unemployed  = 100 X (number of employed / labor force)  100 multiplied by number of employed divided by labor force  labor force participation rate- percent of the adult population that is in the labor force  = 100 X (labor force / adult population)  100 multiplied by labor force divided by adult population  adult population calculated by labor force + not in labor force  What does the unemployment rate measure?  The unemployment rate is not perfect indicator of joblessness or health of the labor market because:  It excludes discouraged workers  It does not distinguish between full-time and part-time work, or people having to work part time because of jobs not available  Some people misreport their work status in the BLS survey (Phantom Worker)  It does not include workers being paid “under the table”  Still very useful barometer of the labor market and economy  The Duration of Unemployment  Most spells of unemployment are short:  Typically 1/3 of the unemployed have been unemployed under 5 weeks, 2/3 have been unemployed under 14 weeks  Only 20% have been unemployed over 6 months  Most observed unemployment is long term  The small group of long-term unemployed persons has fairly little turnover, so it accounts for most of the unemployment observed over time  This helps policy makers design better policies to help the unemployed  Natural rate of unemployment- the normal rate of unemployment around which the actual unemployment rate fluctuates  Cyclical unemployment- the deviation of the unemployment from its natural rate  Associated with business cycles  National rate of unemployment made up of two things:  Frictional unemployment- occurs when workers spend time searching for the jobs that best suit their skills and tastes  Short-term for most workers  Structural unemployment- occurs when there are fewer jobs than workers  Usually long-term  Explaining frictional unemployment:  Workers have different takes and skills, and have different job requirements  Such shifts displace some workers, who must search for new jobs appropriate for their skills and tastes  The economy is always changing so some frictional unemployment is inevitable  How the government helps friction unemployment:  Government employment agencies  Provide information about job vacancies to speed up the matching of works with the jobs  Public training programs  Aim to equip works displaced from declining industries with skills needed in growing industries  What makes up frictional unemployment: (3 major reasons)  Job search (1)- is the process of matching workers with appropriate jobs  Sectorial shift (2)- (changing economy) changes in the composition of demand across industries or regions of the country  Unemployment insurance (3)- a government program that partially protects workers’ incomes when they become unemployed  Increases friction unemployment (people respond to incentives)  Benefits end when a worker takes a job, so workers have less incentive to search, or take jobs while eligible to receive benefits  Increasing or extending unemployment insurance raises fictional unemployment  Benefits – reducing uncertainty over incomes and gives the unemployed more time to search resulting in better job matches and thus higher productivity  Explaining structural unemployment:  Occurs when not enough jobs to go around  Occurs when wage is kept above equilibrium  What makes up structural unemployment: (3 major reasons)  Minimum-wage laws (1)  Minimum wage may exceed the equilibrium wage for the least skilled or experience workers causing structural unemployment  This group is a small part of the labor force  Increasing minimum wages raises structural unemployment by increasing the Qs of labor and decreasing Qd of labor  Unions (2)- a worker association that bargains collectively with employers over wages, benefits, and working conditions  exert their market power to negotiate higher wages for works  when bargain successfully, wages and unemployment rise in that industry  typical union worker earns high wages and gets more benefits than a nonunion worker for the same type of work  when successful, wages rise above the market equilibrium, as a result the Qs of the labor rises and the Qd of labor falls and unemployment rises  “insiders”- workers who remain employed, they are better off  “outsiders” – workers who lose their jobs, they are worse off  some outsiders go to non-unionized labor markets, which increases labor supply and reduces wages in those markets  Efficiency Wages (3) – when firms voluntarily pay above-equilibrium wages to boost worker productivity  Increasing worker productivity, the firm’s profit can increase as well  Four reasons why firms might pay efficiency wages:  Workers health  in less developed countries, poor nutrition is a common problem. Paying higher wages allows workers to eat better, makes them healthier, more productive  Worker turnover  Hiring and training new workers is costly, paying high wages gives work more incentives to stay, reduces turnovers  Worker quality  Offering higher wages attracts better job applicants, increases quality of the firm’s workforce  Work effort  Workers can work hard or be lazy, lazy workers are fired if caught 


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Anthony Lee UC Santa Barbara

"I bought an awesome study guide, which helped me get an A in my Math 34B class this quarter!"

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.