Unemployment

Unemployment is the condition of people who are able and willing to work, actively seeking work, but without jobs. It is measured through labor-force surveys and varies with economic conditions and institutions.

Labor force: The employed and unemployed people who are available for work in an economy. Unemployment is measured as a share of this population, excluding people outside it.
Frictional unemployment: Short-term unemployment arising as workers search for jobs or move between them. It can persist even when jobs are available because matching takes time.
Unemployment insurance: A public program that temporarily replaces part of the earnings of eligible people who lose their jobs. It cushions income losses while unemployed workers seek new jobs.
Hysteresis: A process in which a temporary economic shock produces effects that persist after the shock ends. A downturn can leave lasting unemployment through lost skills and weakened job prospects.
Unemployment rate: The percentage of the labor force that is unemployed. This headline measure expresses unemployment relative to people working or seeking work.
Structural unemployment: Unemployment caused by a mismatch between workers' skills or locations and available jobs. It can endure when economic change leaves workers unsuited to existing vacancies.
Employment policy: Government measures intended to influence employment, job creation, and labor-market outcomes. Policies address unemployment through demand support, training, job matching, or hiring incentives.
Scarring effect: The lasting harm to earnings or career prospects caused by an earlier period of disadvantage. Early-career unemployment can reduce later wages and employment opportunities.
Labor market: The system through which workers and employers exchange labor for wages and other compensation. Unemployment reflects the balance between workers seeking jobs and employers seeking workers.
Cyclical unemployment: Unemployment caused by downturns in aggregate economic activity. Falling demand for goods and services leads employers to reduce hiring or cut jobs.

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