Relation to income and substitution effects
In the added worker effect married women are willing to work more for pay as a response to a loss of real income despite the price of leisure dropping in relation to the wage rate.
Real income is income of individuals or nations after adjusting for inflation. It is calculated by dividing nominal income by the price level. Real variables such as real income and real GDP are variables that are measured in physical units, while nominal variables such as nominal income and nominal GDP are measured in monetary units. Therefore, real income is a more useful indicator of well-being since it measures the amount of goods and services that can be purchased with the income.
A common model used to study the added worker effect views the family as a decision making unit and leisure time as a normal good. With this understanding, a married woman may choose to enter the labor market to offset the loss of income her family faces when her husband loses his job. Since family wages are pooled and the price of consuming leisure varies among individuals depending on earning power, an increase in one individual's income may result in other family members gaining leisure time by working less (Mincer, 1962, p. 65). The diminishing marginal utility of income explains why the family would work fewer hours.
In economics, a normal good is any good for which demand increases when income increases, i.e. with a positive income elasticity of demand.
Women's earning power, which is typically less than that of their husbands, depends on wage rates and employment opportunities (Mincer, p. 66). While earning power and labor force participation have a positive correlation, an inverse relationship characterizes husbands' income and wives' participation in the labor market. Therefore, women may be less inclined to enter the labor force when earning power rises for both men and women.
The added worker effect results when the income effect dominates the substitution effect in an individual's decision whether or not to participate in the labor market. The income and substitution effects are concepts in the consumer choice theory of microeconomics.
For added workers to enter the labor market when earning power decreases, the negative income effect must outweigh the positive substitution effect (Mincer, p. 68). In families whose male head of household loses his job, “the relative decline in family income is much stronger than the relative decline in the 'expected' wage rate of the wife.” In this case, the net effect leads the wife to enter the labor market, thereby increasing the labor supply. An example of the effect can be found in a study by Arnold Katz, who attributes the bulk of the increase in married female workers in the depression of 1958 “to the distress[ed] job seeking of wives whose husbands were out of work” (1961, p. 478).
Labour economics seeks to understand the functioning and dynamics of the markets for wage labour.
Unemployment, according to the Organisation for Economic Co-operation and Development (OECD), is when persons above a specified age are not in paid employment or self-employment and are currently available for work during the reference period.
Full employment is a situation in which everyone who wants a job can have work hours they need on fair wages. Because people switch jobs, full employment involves a positive stable rate of unemployment. An economy with full employment might still have underemployment where part-time workers cannot find jobs appropriate to their skill level. In macroeconomics, full employment is sometimes defined as the level of employment at which there is no cyclical or deficient-demand unemployment.
Unemployment benefits are payments made by authorized bodies to unemployed people. In the United States, benefits are funded by a compulsory governmental insurance system, not taxes on individual citizens. Depending on the jurisdiction and the status of the person, those sums may be small, covering only basic needs, or may compensate the lost time proportionally to the previous earned salary.
In economics, a discouraged worker is a person of legal employment age who is not actively seeking employment or who has not found employment after long-term unemployment, but who would prefer to be working. This is usually because an individual has given up looking, hence the term "discouraged".
The Current Population Survey (CPS) is a monthly survey of about 60,000 U.S. households conducted by the United States Census Bureau for the Bureau of Labor Statistics (BLS). The BLS uses the data to publish reports early each month called the Employment Situation. This report provides estimates of the unemployment rate and the numbers of employed and unemployed people in the United States based on the CPS. A readable Employment Situation Summary is provided monthly. Annual estimates include employment and unemployment in large metropolitan areas. Researchers can use some CPS microdata to investigate these or other topics.
The GDP gap or the output gap is the difference between actual GDP or actual output and potential GDP. The calculation for the output gap is Y–Y* where Y is actual output and Y* is potential output. If this calculation yields a positive number it is called an inflationary gap and indicates the growth of aggregate demand is outpacing the growth of aggregate supply—possibly creating inflation; if the calculation yields a negative number it is called a recessionary gap—possibly signifying deflation.
Family economics applies economic concepts such as production, division of labor, distribution, and decision making to the study of the family. It tries to explain outcomes unique to family—such as marriage, the decision to have children, fertility, polygamy, time devoted to domestic production, and dowry payments using economic analysis.
Unemployment benefits in Sweden are payments made by the state or other authorized bodies to unemployed people. They can be divided into a voluntary scheme with income-related compensation up to a certain level, or a comprehensive scheme that provides a lower level of basic support.
The insider-outsider theory is a theory of labor economics that explains how firm behavior, national welfare, and wage negotiations are affected by a group in a more privileged position. The theory was developed by Assar Lindbeck and Dennis Snower in a series of publications beginning in 1984.
The Employment Development Department (EDD) provides a variety of services to businesses, workers, and job seekers. The EDD administers several multi-billion dollar benefit programs including the Unemployment Insurance (UI), Disability Insurance (DI), and Paid Family Leave (PFL) programs that provide financial stability to workers and their communities. The Department also provides critical employment service programs to Californians, collect the state’s labor market information and employment data, and serve as one of the nation’s largest tax agencies through our collection of payroll taxes.
A job guarantee (JG) is an economic policy proposal aimed at providing a sustainable solution to the dual problems of inflation and unemployment. Its aim is to create full employment and price stability, by having the state promise to hire unemployed workers as an employer of last resort (ELR).
Partner effects refer to the ways in which a spouse or consensual mate influences the life of their significant other. More specifically, the effect a partner has on another's career and overall occupational status. In the past, less research had been done to observe the effects of spousal education and status position on one another because it had been assumed that the wife would adopt the husband's status. Over the past few decades, however, opportunity for women in the workplace has increased dramatically giving them a larger role in overall family income and status. Women's expanded role has brought about many changes in the opportunities for families.
Unemployment in the United States discusses the causes and measures of U.S. unemployment and strategies for reducing it. Job creation and unemployment are affected by factors such as economic conditions, global competition, education, automation, and demographics. These factors can affect the number of workers, the duration of unemployment, and wage levels.
Unemployment in the United Kingdom is measured by the Office for National Statistics and in the three months to May 2017 the headline unemployment rate stood at 4.5%, or 1.49 million people. This is a reduction in unemployed people of 152,000 from a year earlier, and is the lowest jobless rate since 1975. The ONS said the employment rate, or percentage of people in work for those aged between 16 and 64, was 74.9% for the three months to May. This is the highest employment rate since comparable records began in 1971. There were 32.01 million people in work, 324,000 more than a year earlier.
Youth unemployment is the situation of young people who are looking for a job, but cannot find a job, with the age range being that defined by the United Nations as 15–24 years old. An unemployed person is defined as someone who does not have a job but is actively seeking work. In order to qualify as unemployed for official and statistical measurement, the individual must be without employment, willing and able to work, of the officially designated "working age" and actively searching for a position. Youth unemployment rates tend to be higher than the adult rates in every country in the world.
Job creation and unemployment are affected by factors such as aggregate demand, global competition, education, automation, and demographics. These factors can affect the number of workers, the duration of unemployment, and wage rates.
Unemployment in Hungary measured by the Hungarian Central Statistical Office shows the rate of unemployed individuals out of the labor force. The European Union's own statistical office, Eurostat also makes reports and predictions about the Hungarian job market and the unemployment rate in the country. The KSH's most recent unemployment data shows the unemployment rate for men 15-74 to be 3.3% and 4.1% for women.
Unemployment is a serious social issue in China in recent years. However, the problem is not simply that the quantity of unemployment has increased; it is also that the category of unemployment has become correlative in China. In other words, China's history of unemployment is not just a matter of numbers, although the numbers important as they are for humanitarian, social and political impact, this is a problem of the social form in which unemployment occurs. Unemployment is a concept in the economy that describes the relationship between supply and demand for labor. –supply exceeds demand. In addition, the influence of foreign investment in China has greatly increased since the Open Door Policy was implemented in the early 1980s. The relationship between foreign-funded enterprises and urban labor market development is dual. Opponents influence the shape of labor-market regulation; But foreign-funded enterprises have also become a major source of demand for urban and rural areas migrant workers. Therefore, the issue of supply and demand for labor is more obvious than ever. The exploitation of China's labor force by foreign-owned enterprises leads to the shortage of domestic enterprises’ labor force. Moreover, the unemployment in China also depend to a great extent on life stage. Young, middle-aged and elderly workers have different react to the experience of unemployment. The situation of women in the labor market is deteriorating, with a declining labor force participation rate, rising unemployment, increase intensity of work and a widening gender pay gap. Furthermore, unemployment rate is an essential index to measure the unemployment situation for the country. The unemployment rate is defined as the percentage of unemployed workers in the total labor market. If the workers are not currently working, they are considered unemployed, no matter the ability and willingness to do the job. This entire workforce is made up of all unemployed and employed population in the economy. Another important index is participation rate. Participation rate defined as the active labor force in an economy and is the labor force divided by the working age population. It shows the number of populations who are working or actively seeking for work. During the recession period in China, a large number of workers more often than not feel discouraged and quit looking for job and would leading to lower participation rates. Those workers who are no longer actively seeking the work will not be included in the participation rate.
