Topic 1: Introduction

Question 1

What is labour economics?

Answer 1

A study of outcomes and interactions between participants in the market of “labour”

Question 2

What are the methods of studying labour economics?

Answer 2

Applied Microeconomic Study: Abstract model that incorporates real world factors, some kind of maximising model, used to explain and predict market outcomes.

Apply Econometrics: Use real world data to measure outcomes and verify theory.

Question 3

Define some Terms:

• Population of interest.
• Employed.
• Unemployed.
• Labour Force.
• Not in labour force.
• Employment-population Ratio.
• Unemployement Rate.
• Labour Force Participation Rate.
• Discouraged Workers.
• Hidden Unemployed.

Answer 3

Definitions:

• Population of interest: age 15-64
• Employed.
• Unemployed. No job but looking for one.
• Labour Force. Both the employed and unemployed.
• Not in labour force.
• Employment-population Ratio. = ^E / _P
• Unemployement Rate. = ^U / _LF
• Labour Force Participation Rate. = ^LF/_P = ^{E + U} / _P
• Discouraged Workers. Laid off workers who give up looking for work.
• Hidden Unemployed. Discouraged workers are not counted as unemployed.