Definition of Unemployment

Our second macroeconomic problem is unemployment. This problem is highly correlated with recession, but is distinct, and we need to look at it in its own terms. The concept of unemployment is one we get from our pessimistic old friend, Thomas Malthus.

It may seem strange to claim that someone "discovered" unemployment, but Thomas Malthus seems to have been the first scholar to clearly distinguish unemployment from other kinds of labor market problems, and to offer a theory of unemployment. Here is a modern definition of unemployment:

DEFINITIONS:

unemployed

A person is said to be "unemployed" if he or she is looking for work, is willing to work at the prevailing wage, but is unable to find a job.

unemployment

Unemployment refers to the condition of being unemployed, or to the number or proportion of people in the working population who are unemployed.

Unemployment as Excess Supply