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Unemployment Rates Defined

Unemployment Rates Defined

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Unemployment Rates Defined

Although the public may be more concerned about the sum total of individuals who are out of work, when economists or governments discuss unemployment they prefer to address unemployment rates both because it can make comparisons easier and because it can be easier to discuss unemployment as a ratio than in absolute numbers. 

Looking at the unemployment rate or employment rate automatically corrects for the natural variations in the numbers of people employed due to population changes. The unemployment rate is identified by determining the ratio between the unemployed workers and the total labor force. 

The International Labour Organization, a division of the United Nations identifies unemployed workers as individuals who are not working at the time the unemployment rate is calculated, but are willing, available, and able to work for pay, and have been actively searching for work. In order to be considered actively searching, an individual must

·      Have contact with a potential employer,

·      Go on job interviews,

·      Contact job placement agencies

·      Submit resumes or applications

·      Respond to advertisements

·      or conduct come other manner of actively searching for jobs within the previous four weeks.


Unemployment rates may not be entirely accurate because not all job openings are publicly advertised, and some individuals who want to and are able to work may become frustrated if they remain unemployed for long periods of time, thus abandoning their job search and therefore failing to meet the official standards to be considered unemployed despite remaining jobless.


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