Definition

• Unemployment: If you're looking for a job but can't find one, you're considered unemployed.
• Unemployment Rate: The number of unemployed people divided by the labor force (unemployed + employed) times 100.

Note

• Labor Force vs. Working Age Population: Labor force includes people actively seeking work. Working age population includes everyone aged 15-64, even those not looking for a job.

Real-World Example

• Think of the labor force like a school football team, and the working-age population like everyone in school. Not everyone in school wants to play football, just like not everyone of working age wants a job!

Issues with Statistics

• Underestimating Unemployment
  • Discouraged Workers: If you give up looking because you can't find work, you're not counted. Imagine a friend who stops asking to join the team after being rejected.
  • Underemployment: If you're overqualified or work fewer hours, like being a star player benched in a match.
• Overstating Unemployment
  • Concealing true status to get benefits or avoid taxes.
  • Employment in illegal activities.

Disparities in Unemployment

• Differs by region, gender, ethnic or religious groups, age.
• Youth Unemployment: Highest in the 15-24 age range. Think of young players not picked for the senior team.