Editing Economics (section)

=== Unemployment ===
{{Main|Unemployment}}
[[File:US Unemployment rate 1990 to present.png|thumb|upright=1.4|The U.S. [[unemployment]] rate from 1990 to 2022]]
The amount of unemployment in an economy is measured by the unemployment rate, the percentage of workers without jobs in the labour force. The labour force only includes workers actively looking for jobs. People who are retired, pursuing education, or [[discouraged worker|discouraged from seeking work]] by a lack of job prospects are excluded from the labour force. Unemployment can be generally broken down into several types that are related to different causes.<ref name=Dwivedi443>{{cite book|last=Dwivedi|first=D. N.|title=Macroeconomics: Theory and Policy|url=https://books.google.com/books?id=P1eFyp9Iku8C&pg=PP1|year=2005|publisher=Tata McGraw-Hill Education|isbn=978-0-07-058841-7}}</ref>

Classical models of unemployment occurs when wages are too high for employers to be willing to hire more workers. Consistent with classical unemployment, frictional unemployment occurs when appropriate job vacancies exist for a worker, but the length of time needed to search for and find the job leads to a period of unemployment.<ref name=Dwivedi443/>

[[Structural unemployment]] covers a variety of possible causes of unemployment including a mismatch between workers' skills and the skills required for open jobs.<ref>{{cite encyclopedia |last=Freeman |first=C. |editor-first1=Steven N. |editor-last1=Durlauf |editor-first2=Lawrence E. |editor-last2=Blume |date=2008 |edition=2nd |chapter-url=http://www.dictionaryofeconomics.com/article?id=pde2008_S000311 |doi=10.1057/9780230226203.1641 |title=The New Palgrave Dictionary of Economics |pages=64–66 |isbn=978-0-333-78676-5 |chapter=Structural unemployment |publisher=Palgrave Macmillan UK |access-date=9 September 2012 |archive-date=6 June 2013 |archive-url=https://web.archive.org/web/20130606035612/http://www.dictionaryofeconomics.com/article?id=pde2008_S000311 |url-status=live }}</ref> Large amounts of structural unemployment can occur when an economy is transitioning industries and workers find their previous set of skills are no longer in demand. Structural unemployment is similar to frictional unemployment since both reflect the problem of matching workers with job vacancies, but structural unemployment covers the time needed to acquire new skills not just the short term search process.{{sfnp|Dwivedi|2005|pp=444–445}}

While some types of unemployment may occur regardless of the condition of the economy, cyclical unemployment occurs when growth stagnates. [[Okun's law]] represents the empirical relationship between unemployment and economic growth.{{sfnp|Dwivedi|2005|pp=445–446}} The original version of Okun's law states that a 3% increase in output would lead to a 1% decrease in unemployment.<ref>{{cite journal |last=Neely |first=Christopher J. |url=http://research.stlouisfed.org/publications/es/10/ES1004.pdf |title=Okun's Law: Output and Unemployment |journal=Economic Synopses |volume=4 |date=2010 |access-date=9 September 2012 |archive-date=4 December 2012 |archive-url=https://web.archive.org/web/20121204055537/http://research.stlouisfed.org/publications/es/10/ES1004.pdf |url-status=live }}</ref>