Unemployment Quiz

Unemployment: Definitions, Types, and Theories

• Unemployment is the state of being without any work but looking for work.

• Unemployment is measured by the unemployment rate, which is the number of people who are unemployed as a percentage of the labor force.

• Unemployment can have many sources, including economic status and monetary policy.

• The main types of unemployment include structural, frictional, cyclical, involuntary, and classical unemployment.

• According to the UN's International Labour Organization (ILO), 172 million people worldwide were without work in 2018.

• Real-wage unemployment occurs when real wages for a job are set above the market-clearing level.

• Cyclical unemployment occurs when there is not enough aggregate demand in the economy to provide jobs for everyone who wants to work.

• Structural unemployment occurs when a labor market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of the unemployed workers and the skills needed for the available jobs.

• Frictional unemployment is the time period between jobs in which a worker searches for or transitions from one job to another.

• Official statistics often underestimate unemployment rates because of hidden, or covered, unemployment.

• Long-term unemployment (LTU) is defined as unemployment lasting for longer than one year.

• Marxists share the Keynesian viewpoint of the relationship between economic demand and employment, but with the caveat that the market system's propensity to slash wages and reduce labor participation on an enterprise level causes a requisite decrease.Understanding Unemployment: Measurement and Limitations

• Unemployment is a necessary part of the capitalist system, according to Karl Marx.

• The function of the proletariat is to provide a "reserve army of labour" that creates downward pressure on wages.

• Unemployment is profitable within the global capitalist system because it lowers wages.

• The International Labour Organization defines "unemployed workers" as those who are currently not working but are willing and able to work for pay, currently available to work, and have actively searched for work.

• National statistical agencies measure unemployment in different ways, limiting the validity of international comparisons.

• The unemployment rate corrects for the normal increase in the number of people employed caused by increases in population and increases in the labour force relative to the population.

• The US unemployment rate does not take into consideration those individuals who are not actively looking for employment, such as those who are still attending college.

• The Bureau of Labor Statistics measures employment and unemployment by using two different labour force surveys.

• The United States' non-agricultural labour force increased from 20% in 1800 to 50% in 1850 and 97% in 2000.

• The measures of employment and unemployment may be "too high" because of the availability of unemployment benefits.

• It is possible to be neither employed nor unemployed by ILO definitions by being outside of the "labour force."

• The labour force participation rate is the ratio between the labour force and the overall size of their cohort.Overview of Unemployment and Women's Participation in the Labor Force

• Women's participation in the labor force in the US has gone through four significant stages, with increases in the 20th century and decreases in the 21st century.

• Male labor force participation decreased from 1953 to 2013, but since October 2013, men have been increasingly joining the labor force.

• From the late 19th century to the 1920s, few women worked outside the home, primarily in the textile manufacturing industry or as domestic workers.

• Between 1930 and 1950, female labor force participation increased primarily because of the increased demand for office workers, women's participation in the high school movement, and electrification, which reduced the time spent on household chores.

• From the mid-1970s to the late 1990s, there was a period of revolution of women in the labor force brought on by various factors, many of which arose from the second-wave feminism movement.

• The rise of women participating in the US labor force in the 1950s to the 1990s was caused by the introduction of a new contraceptive technology, birth control pills, as well as the adjustment of age of majority laws.

• The Equal Pay Act of 1963 aimed at abolishing wage disparity based on sex, which encouraged more women to enter the labor market.

• The labor force participation rate began to reverse its long period of increase at the turn of the 21st century because of a rising share of older workers, an increase in school enrollment rates among young workers, and a decrease in female labor force participation.

• Unemployment can harm growth because it is a waste of resources; generates redistributive pressures and subsequent distortions; drives people to poverty; constrains liquidity limiting labor mobility; and erodes self-esteem promoting social dislocation, unrest, and conflict.

• Unemployment increases susceptibility to cardiovascular disease, somatization, anxiety disorders, depression, and suicide.

• High unemployment can encourage xenophobia and protectionism since workers fear that foreigners are stealing their jobs.

• Efforts to preserve existing jobs of domestic and native workers include legal barriers against "outsiders" who want jobs, obstacles to immigration, and/or tariffs and similar trade barriers against foreign competitors.

• Full employment cannot be achieved because workers would shirk if they were not threatened with the possibility of unemployment.Unemployment: Causes, Remedies, and Historical Overview

• Employers prevent wages from decreasing too low to avoid shirking, which perpetuates unemployment but reduces shirking.

• Unemployment can allow workers to find jobs that better fit their tastes, talents, and needs.

• Unemployment may promote general labor productivity and profitability by increasing employers' monopsony-like power and profits.

• Optimal unemployment can be defended as an environmental tool to maintain sustainable levels of growth and consumption.

• Some critics propose an "anti-work" ethic for life and advocate reassessing the cost of living and creating jobs that are "fun."

• The workweek declined considerably during the 19th century, and the average workweek in the US was reduced to 40 hours in 1933.

• Governments have tried various measures to achieve full employment, but attempts to reduce unemployment below the natural rate of unemployment result in less output and more inflation.

• Increases in demand for labor increase wages and employment, and increasing wages to the working class can boost demand for goods and services.

• Providing aid to the unemployed through social welfare programs can prevent cutbacks in consumption and demand.

• Supply-side policies can make the labor market more flexible and increase long-term growth by reducing labor costs.

• Industrialization involves economies of scale that often prevent individuals from creating their own jobs to be self-employed.

• Recognition of unemployment occurred slowly as economies across the world industrialized and bureaucratized, and traditional self-sufficient native societies had no concept of unemployment.