Chapter 8: The Labor Market e8-1 ATour of the labor market .8-2: Movements in Unemployment ●83: Wage Determination e8-4: Price determination .8-5: The Natural Rate of Unemployment 68-6: Where We go from here 2003-7-13
2003-7-13 1 Chapter 8: The Labor Market 8-1: A Tour of the Labor Market 8-2: Movements in Unemployment 8-3: Wage Determination 8-4: Price Determination 8-5: The Natural Rate of Unemployment 8-6: Where We Go From Here
8-1HA Tour of the labor market The Large Flows of Workers e Differences across workers 2003-7-13
2003-7-13 2 8-1: A Tour of the Labor Market The Large Flows of Workers Differences across workers
Figure 8-1: Average Monthly Flows Between Employment, Unemployment and Nonparticipation in the United States196841986 Employment 93.8 million 1.3 1.5 1.61.6 1.0 Out of labor Unemployment force 57.3 6.5million 0.8 million 2003-7-13 3
2003-7-13 3 Figure 8-1: Average Monthly Flows Between Employment, Unemployment, and Nonparticipation in the United States, 1968-1986 1.3 1.5 1.6 1.6 1.0 0.8 Employment 93.8 million Unemployment 6.5million Out of labor force 57.3 million
Figure 8-1 has three striking features e1. The size of the flows into and out of employment o 2 The size of the flows into and out of unemployment in relation to the total number of unemployed 3. The size of the flows into and out of the labor force 2003-7-13
2003-7-13 4 Figure 8-1 has three striking features 1.The size of the flows into and out of employment 2.The size of the flows into and out of unemployment in relation to the total number of unemployed. 3.The size of the flows into and out of the labor force
Table 8-1: Population, Labor force, Employment and Unemployment in the United states(in million), 1998 Total population 270.2 Civilian noninstitutional population 205.2 Civilian labor force 137.6 Employed 1314 Unemployed 62 2003-7-13 5
2003-7-13 5 Table 8-1: Population, Labor force, Employment, and Unemployment in the United States(in million),1998 Total population 270.2 Civilian noninstitutional population 205.2 Civilian labor force 137.6 Employed 131.4 Unemployed 6.2
Table 8-2: Monthly Separation Rates for Different Group, 1968-1986 Monthly Separation rate(%) Category (Quits and Layoffs Male Ages 16-19 15.9 35-44 1.6 Female Ages 16-19 16.1 35-44 5.0 2003-7-13 6
2003-7-13 6 Table 8-2: Monthly Separation Rates for Different Group, 1968-1986 Monthly Separation rate (%) Category (Quits and Layoffs) Male: Ages 16-19 15.9 35-44 1.6 Female: Ages 16-19 16.1 35-44 5.0
Unemployment rate in the U.s. 1955-2002 Movements in the U. S Unemployment Rate, 1955-2002 12.0 10.0 8.0 6.0 4.0 三①口 2.0 0.0 吕当总总 ear 2003-713 7
2003-7-13 7 Unemployment rate in the U.S. 1955-2002 Movements in the U.S.Unemployment Rate,1955-2002 0.0 2.0 4.0 6.0 8.0 10.0 12.0 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 Year Unemployment rate (percent)
8-2: Movements in Unemployment e First, there is evidence of a small upward trend in the unemployment rate. The average unemployment rate was 4.5% in the 1950s 47%in the 1960s 6.2% in the 1970s.7.3% in the 1980s In the 1990s however average unemployment has been only 5.75% e Second, the trend increase is dominated by large fluctuations in the unemployment rate 2003-7-13 8
2003-7-13 8 8-2: Movements in Unemployment First,there is evidence of a small upward trend in the unemployment rate. The average unemployment rate was 4.5% in the 1950s, 4.7% in the 1960s, 6.2% in the 1970s, 7.3% in the 1980s. In the 1990s however, average unemployment has been only 5.75%. Second, the trend increase is dominated by large fluctuations in the unemployment rate
8-3: Wage Determination ● Bargaining e Efficiency Wages e Wages and Unemployment ° The Expected Price Level The Unemployment Rate ● The other factors 2003-7-13 9
2003-7-13 9 8-3: Wage Determination Bargaining Efficiency Wages Wages and Unemployment ⚫ The Expected Price Level ⚫ The Unemployment Rate ⚫ The other Factors
The Way of Wage determination e Wages are set in many ways. Sometimes they are set by collective bargaining, that is, bargaining between firms and unions In the united states however, collective bargaining plays a limited role, especially outside manufacturing. Today, less than 25%of workers are covered by collective bargaining agreements For the rest, wages are set either by employers, or by individual bargaining between the employee 2003-7-13 10
2003-7-13 10 The Way of Wage determination Wages are set in many ways. Sometimes they are set by collective bargaining, that is, bargaining between firms and unions. In the United States however, collective bargaining plays a limited role,especially outside manufacturing. Today, less than 25% of workers are covered by collective bargaining agreements. For the rest,wages are set either by employers,or by individual bargaining between the employee