The Labor force consists of persons 16 years of age or older who are not in institutions and who are employed or unemployed but seeking employment.
(Phil. Definition, revised 2002)
The labor force is that part of the population aged 18-65 who are willing and can work. In percent, against the total population, we term it as the labor force participation rate.
Labor force –unemployed
Dependency Burden – the remaining part which is the aggregation of people aged 0-15 and above 65 is considered economically unproductive.
Unemployment – condition where people who are looking or willing and can work but does not have one. The inverse of such is called employment. On the other hand, having a job but not matched to supposed-to-be-job or those who work that do not fully utilize labor resources is called unemployment
The unemployment rate is the percentage of the labor force unemployed:
Unemployment rate = unemployed/ laborforce x 100
Unemployment pool – refers to the number of unemployed persons. 1. New entrant to the labor force
2. Whose who quit their job to look for greener pasteurs
3. Laid-off workers
4. Fired/ their firm closed down
3 kinds of unemployment
1. Frictional unemployment
2. Structural/ compositional Unemployment
3. Cyclical Unemployment
Duration of Unemployment
Refers to a period where individuals remains continuously unemployed, or for short, the average length of time one remains unemployed
Workers become unemployed due to:
* Variability of demand for labor across different firms
* Rate at which new workers enter the labor force
How to reduce the natural rate of unemployment
1. Increase in investments in the physical economy
2. Strengthening Human Capital
Change in the general price level overtime
Inflation Rate = [(CPI+ - CPI+-1)/ CPI+-1] x 100
Deflation – decline...