Lectures in Macroeconomics- Charles W. Upton Economists and Unemployment w H ours Searching S* S*
Lectures in Macroeconomics- Charles W. Upton Economists and Unemployment.
Dec 20, 2015
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Lectures in Macroeconomics- Charles W. Upton
Economists and Unemploymentw
HoursSearching S*S*
Economists and Unemployment
The Process
IU
VU
E
IU
VU
E
Economists and Unemployment
Economists and Unemployment
D
SSRSLR
H*
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Economists and Unemployment
The Economics of Search
• If I spend more time searching, I can get a better deal.
Economists and Unemployment
The Economics of Search
• If I spend more time searching, I can get a better deal.– I will pay less for a new car– I will get a better deal on….– I will get a higher paying job
Economists and Unemployment
The Economics of Search
• If I spend more time searching, I can get a better deal.– I will pay less for a new car– I will get a better deal on….– I will get a higher paying job
• But time is money
Economists and Unemployment
The Economics of Searchw
HoursSearching
Economists and Unemployment
The Economics of Searchw
Hours Searching
• Every hour I spend searching brings a higher wage.
• Every hour costs something
Economists and Unemployment
The Economics of Searchw
MBMC
Hours Searching
Economists and Unemployment
The Economics of Searchw
HoursSearching S*S*
Economists and Unemployment
The Economics of Searchw
HoursSearching S*S*
While I am searching, I may not be working.
The BLS will count me as unemployed
Economists and Unemployment
What is going on
• Search. People search for the right jobs and employers search for the right employees.
Economists and Unemployment
What is going on
• Search. People search for the right jobs and employers search for the right employees.
• Search takes time.
Economists and Unemployment
What is going on
• Search. People search for the right jobs and employers search for the right employees.
• Search takes time.
• People searching are unemployed.
Economists and Unemployment
Why you might choose to be unemployed
• You graduate from college
Economists and Unemployment
Why you might choose to be unemployed
• You graduate from college– Should you take the first job that comes along?
Not necessarily.
Economists and Unemployment
Why you might choose to be unemployed
• You graduate from college
• You stay out of the labor force for several years and decide to start work again.– Should you take the first job that comes along?
Not necessarily.
Economists and Unemployment
Why you might choose to be unemployed
• You graduate from college
• You stay out of the labor force for several years and decide to start work again.
• After years of employment, you either quit or get laid off.
Economists and Unemployment
Why you might choose to be unemployed
• You graduate from college
• You stay out of the labor force for several years and decide to start work again.
• After years of employment, you either quit or get laid off.– Should you take the first job that comes along?
Not necessarily.
Economists and Unemployment
From the perspective of an employer
• You are running a business. You have a vacancy. – You are expanding, or someone quit or got
fired.– Should you take the first applicant? Not
necessarily.
Economists and Unemployment
Complications
• In many cases, search will lead you to decide to leave the labor market or never to enter the market.
• You may be able to do your search while still holding your old job.
• Your search may be complicated by uncertainty or error about your market wage rates.
Economists and Unemployment
End
©2004 Charles W. Upton. All rights reserved
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