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18 Cards in this Set
- Front
- Back
The civilian labour force
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The sum of those either working or looking for work.
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Participation rate
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The ratio of the labour force to the population in working age.
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Non-institutional civilian population
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people 16 years of age and older who are not inmates of institutions (penal, mental facilities, homes for the aged), and who are not on active duty in the army.
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Unemployment rate
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The ratio of the unemployment to the labour force.
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Non-employment rate
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The ratio of population minus employment to population.
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Collective bargaining
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Bargaining between firms and unions.
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Reservation wage
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The wage that would make them indifferent between working or being unemployed.
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Transfer earnings
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The minimum earnings required for a unit of labour to stay in its present use.
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Economic rent
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Earnings over and above a worker's transfer earnings
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Bargaining power
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Depends on two factors:
- The nature of the job - The labour market conditions. |
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Efficiency wage theories
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-Theories that link the productivity or the efficiency of workers to the wage they are paid.
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Wage determination
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W = PeF(-u,+z)
Pe = The expected price level u = The unemployment rate z = A catchall variable |
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Real wages
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W/P
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Production function
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- The relation between the inputs used in production and the quantity of output produced.
- Y = AN Y = Output A = Labour productivity N = Employment |
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Price determination
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P = (1+µ)W
P = Price µ = Markup of the price over the cost of production. (Mark-up as depending on the degree of competition in the product market) |
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The natural rate of unemployment
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The equilibrium unemployment
F(u, z) = 1/(1+µ) |
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Wage-setting relation
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W/P = F(-u, +z)
- A negative relation between the real wage, W/P, and the unemployment rate. |
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Price-setting relation
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W/P = 1/(1+µ)
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