Labor Market Indicators Three main labor market indicators

Labor Market Indicators • Three main labor market indicators. • Unemployment Rate • Employment to Population Ratio • Labor Force participation Rate • How to calculate above labor market indicators? • Dynamics of Labor Market Indicators during economic Crises. © 2010 Pearson Addison-Wesley

Employment and Unemployment Current Population Survey The U. S. Census Bureau conducts a monthly population survey to determine the status of the U. S. labor force. The population is divided into two groups: 1. The working-age population—the number of people aged 16 years and older who are not in jail, hospital, or some other institution 2. People too young to work (under 16 years of age) or in institutional care © 2010 Pearson Addison-Wesley

Employment and Unemployment The working-age population is divided into two groups: 1. People not in the labor force : (People who are not looking for work because he or she does not want a job or has given up looking for a job). 2. People in the labor force. The labor force is the sum of employed and unemployed workers) © 2010 Pearson Addison-Wesley

Employment and Unemployment To be counted as unemployed, a person must be in one of the following two categories: 1. Without work but has made specific efforts to find a job within the previous four weeks. 2. Waiting to be called back to a job from which he or she has been laid off. © 2010 Pearson Addison-Wesley

Employment and Unemployment This figure shows the labor force categories in 2012 for the United States. Population: 304. 5 million Working-age population: 233. 8 million Labor force: 154. 6 million Employment: 142. 6 million Unemployment: 12. 0 million © 2010 Pearson Addison-Wesley

Employment and Unemployment Three Labor Market Indicators < The unemployment rate < The employment-to-population

Calculating Labor Market Indicators The Unemployment Rate The unemployment rate is the percentage of the labor force that is unemployed. Unemployment Rate = (Unemployed / Labor Force)*100 % Example: In 2012, the employment was 142. 6 million and 12 million were unemployed. Find the Unemployment rate. © 2010 Pearson Addison-Wesley

Unemployment rate % Calculating Labor Market Indicators A : Official Unemployment rate B : Unemployment plus discouraged workers C : Unemployment plus discouraged workers plus all other persons marginally attached to the labor force : Unemployment plus discouraged workers, all other persons marginally attached to the labor force plus D employed part time workers for some economic reasons © 2010 Pearson Addison-Wesley

Unemployment rate % Calculating Labor Market Indicators © 2010 Pearson Addison-Wesley

Calculating Labor Market Indicators The Employment-to-Population Ratio The employment-to-population ratio is the percentage of the working-age population who have jobs. Employment to Population Ratio = ( Employment / WAP)*100% Example: In 2012, the employment was 142. 6 million and the working-age population was 233. 8 million. Find the employment to population ratio. © 2010 Pearson Addison-Wesley

Calculating Labor Market Indicators The Labor Force Participation Rate The labor force participation rate is the percentage of the working-age population who are members of the labor force. The Labor Force Participation Rate = (Labor Force / WAP) *100% Example: In 2012, the labor force was 154. 6 million and the working-age population was 233. 8 million. Find the labor force participation rate. © 2010 Pearson Addison-Wesley