aggregate hours  the total number of hours worked by all workers in the economy in a given period of time.
Current Population Survey  a monthly survey of a sample of U.S. households done by the U.S. Census Bureau; it measures employment, unemployment, the labor force, and other characteristics of the U.S. population.
cyclical unemployment  unemployment due to a recession, when the rate of unemployment is above the natural rate of unemployment.
efficiency wage  a wage higher than that which would equate quantity supplied and quantity demanded set by employers in order to increase worker efficiency—for example, by decreasing shirking by workers.
employment-to-population ratio  the ratio (usually expressed as a percentage) of employed workers to the working-age population.
frictional unemployment  unemployment arising from normal turnover in the labor market, such as when people change occupations or locations, or are new entrants.
insider  a person who already works for a firm and has some influence over wage and hiring policy.
job rationing  a reason for unemployment in which the quantity of labor supplied is greater than the quantity demanded because the real wage is too high.
job search  a reason for unemployment in which uncertainty in the labor market and workers’ limited information requires people to spend time searching for a job.
job vacancies  positions that firms are trying to fill, but for which they have yet to find suitable workers.
labor demand curve  a downward-sloping relationship showing the quantity of labor firms are willing to hire at each wage.
labor force  all those who are either employed or unemployed.
labor force participation rate  the ratio (usually expressed as a percentage) of people in the labor force to the working-age population.
labor supply curve  the relationship showing the quantity of labor workers are willing to supply at each wage.
minimum wage  a wage per hour below which it is illegal to pay workers.
natural unemployment rate  the unemployment rate that exists, when there is neither a recession nor a boom and real GDP is equal to potential GDP.
outsider  someone who is not working for a particular firm, making it difficult for him or her to get a job with that firm even though he or she is willing to work for a lower wage.
real wage  the wage or price of labor adjusted for inflation; in contrast, the nominal wage has not been adjusted for inflation.
structural unemployment  unemployment due to structural problems such as poor skills, longer-term changes in demand, or insufficient work incentives.
unemployment rate  the percentage of the labor force that is unemployed.
working-age population  persons over 16 years of age who are not in an institution such as a jail or hospital.