1. Lectures in Macroeconomics- Charles W. Upton Economists and Unemployment

2. The Process IU VU E IU VU E

3. Economists and Unemployment D S SR S LR H* w*

4. Economists and Unemployment The Economics of Search If I spend more time searching, I can get a better deal.

5. 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

6. 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

7. Economists and Unemployment The Economics of Search w Hours Searching

8. Economists and Unemployment The Economics of Search w Hours Searching Every hour I spend searching brings a higher wage. Every hour costs something

9. Economists and Unemployment The Economics of Search w MB MC Hours Searching

10. Economists and Unemployment The Economics of Search w Hours Searching S*

11. Economists and Unemployment The Economics of Search w Hours Searching S* While I am searching, I may not be working. The BLS will count me as unemployed

12. Economists and Unemployment What is going on Search. People search for the right jobs and employers search for the right employees.

13. Economists and Unemployment What is going on Search. People search for the right jobs and employers search for the right employees. Search takes time.

14. 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.

15. Economists and Unemployment Why you might choose to be unemployed You graduate from college

16. 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.

17. 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.

18. 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.

19. 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.

20. 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.

21. 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.

22. Economists and Unemployment End ©2004 Charles W. Upton. All rights reserved