The Ethical Rate of Unemployment: A Technical Note
Author(s)
Galbraith, James K.
Abstract
The ethical rate of unemployment, which is the point at which inequality tends to stabilize, depicts the socially tolerable rates of unemployment. The measure monitors and forecasts inequality in income distribution. An analysis of wage inequality in the US since 1920 shows that unemployment rates held consistently below the ethical rate of unemployment results to the reduction of wage inequality. Thus, economic policy makers should take into account the ethical rate of unemployment in their effort to reduce income disparity.
