ECON2000: Labour market and Phillips Curve

Unemployment & Labour Market Dynamics
Population = institutional + noninstitutional civilian population (CP)




Labour force = employed + unemployed
Out of labour force = discouraged + students + retired + disabled + able to work but don't want to


-".(/# 0(#&+
!"#$%&%'"$%() #"$+ =
1(#2%)3 "3+ '('/-"$%()

/)+5'-(6+7
4)+5'-(65+)$ #"$+ =
-".(/# 0(#&+

!"#$%&!'
Employment or absorption rate = (%)*+,- /-! #%#0$/1+%,

#+'-(6+7 -+"9%)3 +5'-(65+)$ +
!"#$%&'(#)*)+,-'!./0#) B+'"#"$%() #"$+ =
Broader unemployment rate = #+5
&/1'!. 3'.-#*)+,-'!./0#)




Labour Market Flows

• Refers to movements of individuals between different states in the labour market over time.
• Instead of just looking at static measures like the unemployment rate or employment level at a given moment