Chapter 17 - Unemployment: meaning and measurement. The following will be discussed in this chapter: Measurement of unemployment, incidence and duration of unemployment, Canadian unemployment trends, does unemployment rate accurately reflect hardship? | Chapter Seventeen Created by: Erica Morrill, Fanshawe College Unemployment: Meaning and Measurement Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Chapter Focus Measurement of unemployment Incidence and duration of unemployment Canadian unemployment trends Does unemployment rate accurately reflect hardship? Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Measuring Unemployment Labour Force Survey Census Unemployment Insurance Claimants Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Canadian Experience Fluctuated widely between 1921-1996 Due to cyclical fluctuations Great Depression World War II 1957-58 Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Measurements Unemployment rate measure of aggregate of labour market activity and degree of utilization Labour force participation rate Ratio of labour force to working age population Employment rate ratio of employment to the population Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Hidden Unemployment/Marginal Labour Force Attachment Individuals may not be classified as unemployed Discourage worker Workers waiting to be recalled after 6 month layoffs Individuals working fewer hours than they wish Temporarily employed Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Labour Force Dynamics Flows between the labour force states are large compared to the stocks Gross flows are huge compared to net Many of the unemployed individuals are employed next month Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Incidence and Duration of Unemployment Keys to understanding unemployment flows between states stocks in each state Incidence of unemployment portion of unemployed at any period Duration of Unemployment length of time spent in unemployed state Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Changing Perspectives on Unemployment Understanding unemployment has implications for public policy Conclusions lengthy spells of unemployment employment is not always found distribution of unemployment Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. The Divergence of the Canada and . Unemployment Rates Postwar period Canada’s unemployment rate tracked the . Since 1982 permanent or structural difference may be evident decline in the incidence of unemployment in . Longer duration of unemployment in Canada Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Unemployment as a Summary Statistic Unemployment is an labour market indicator aggregate state of the economy tightness/looseness of labour market extent of hardship unutilized labour supply Imperfect and supplemented with additional measures Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. End of Chapter Seventeen © 2002 McGraw-Hill Ryerson Ltd. | Chapter Seventeen Created by: Erica Morrill, Fanshawe College Unemployment: Meaning and Measurement Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Chapter Focus Measurement of unemployment Incidence and duration of unemployment Canadian unemployment trends Does unemployment rate accurately reflect hardship? Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Measuring Unemployment Labour Force Survey Census Unemployment Insurance Claimants Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Canadian Experience Fluctuated widely between 1921-1996 Due to cyclical fluctuations Great Depression World War II 1957-58 Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Measurements Unemployment rate measure of aggregate of labour market activity and degree of utilization Labour force participation rate Ratio of labour force to working age population Employment rate ratio of employment to the population Chapter 17- © 2002 McGraw-Hill Ryerson Ltd. Hidden Unemployment/Marginal Labour Force .
