Today's edition of The Washington Post has a story about rising unemployment in the middle Atlantic region. The reason put forth is that improving economic conditions are giving the unemployed a feeling that jobs are or will be more plentiful. As a result, workers who had dropped out of the market because they were discouraged (which would have reduced the unemployment rate) are now coming back in. Call it the "Encouraged Worker Effect."
Is this something you could use when studying unemployment?
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I think that you could use this when studying unemployment because it shows how people think. Since economic conditions are rising and getting better, people believe that more jobs will be available. This might be true, however, it can not be always true. Therefore, I think this could be a useful tool in studying unemployment because it shows how people think that when the economy is growing stronger, more jobs will become available.
Small fluctuations in the unemployment rate can influence people's perspectives on their chances on getting jobs. However, an increase in national unemployment rate or decrease in separate states unemployment rates can not give a clear look into the average American's employment. Other aspects have to be factored in that the majority of citizens probably don't realize. For instance, some workers have been laid off for temporary structural reasons. There is nothing set in stone that they will never be able to return to their same positions. The way I look at it, when the economy is this far down, the only way to go is up.
This article could be useful in studying economics because it illustrates the effects fluctuations in the unemployment rate create on workers outlooks. Even though the decreases in national unemployment rate and the increase in separate state's unemployment rates cannot clearly look into the average americans employment experience and perspective, it certainly effects their motivation to job search which in turn continues to effect the decrease in unemployment rate. What many citizens don't realize however is the other aspects that go into the decrease in unemployment rate, such as temporary structural unemployment. In such situations, there is nothing set in stone that these workers will never be able to return to their positions. The way I look at it, when the economy is so low, there's no way to go but up.
Kyle and Erin,
You both point out some important aspects of this concept. Economics is, after all, a study of human behavior - how act and react to the world around us. Thanks for commenting.
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