Unemployment

$$\text{Unemployment}u=\frac{U}{N+U}$$ $$\text{Participation Rate}p=\frac{N+U}{\text{population}}$$ $$\text{Vacancy Rate}v=\frac{\text{\#vacancies}}{U}$$

Measured using three variables:

• $u$ the unemployment rate
• $p$ the participation rate
• $v$ the vacancy rate …where…
• $U$ is the number of registered unemployed people
• $N$ is the number of employed people
• The labor market is tight when $D_{\text{labor}}>S_{\text{labor}}$ and loose vice versa.

Types of Unemployment §

1. Cyclical: due to business cycles, ¶during recessions companies lay off workers
2. Seasonal: due to natural yearly fluctuations, ¶hotel workers unemployed during off-season
3. Structural: due to ¶ training and job-searching imperfections, baked into the system