Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Theme 2 > 2.1.3 Employment And Unemployment > Flashcards

2.1.3 Employment And Unemployment Flashcards

1
Q

Unemployment

A

people of working age who are out of work and actively seeking work in the labour market. They must be available to start work within the next two weeks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Unemployment rate

A

the proportion of the economically active population who are without a job (independent of a country’s size)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Measures of unemployment

A
  • the Claimant count
  • the International Labour Organisation ILO - the UK Labour Force Survey
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

The Claimant count

A
  • the total no. recipients of Job Seeker’s Allowance added to
  • those looking for work to claim Universal credit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

The UK Labour Force Survey

A

asks 60-70,000 UK households to self-classify their economic status (employed, unemployed or economically inactive)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Issues with data for unemployment

A
  • LFS intends to be representative for the whole population but there’s always scope for sample error
  • excludes the economically inactive (maybe complex reason for no work)
  • unemployment is not the same as underemployment
  • there’s hidden unemployment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Difference between unemployment and underemployment

A

underemployment is people who are employed/working part-time/ but would prefer a full time job

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Why does the no. people who work in the UK increase at the same time as unemployment?

A
  • employment
  • Increase immigration (e.g so there are more people in the labour market, some of whom get jobs and some who do not or replace others already working)
  • also the no. people who are inactive is falling
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Full employment

A

when there’s enough job vacancies for all the unemployed to take work (there’ll always be some unemployment in the economy)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Mass unemployment

A

when officially one person in ten in the labour force is counted as being out of work (e.g The Great Depression- unemployment increased by 24.6%)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Economic inactivity

A

those who are of working age but are neither in work or are actively seeking it (e.g pandemic might increase economic activity as the rate of long term unemployment grows)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Reasons for economic activity

A
  • Student remaining in full-time education/on training courses
  • Looking after family or home
  • Long-term sickness
  • Retired people (early retired)
  • DIscourage workers who have given up an active search for work
    Evaluation: long-term or not
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Long-term unemployment

A
  • People who have been out of work for at least one year (this is a structural supply-side problem in the labour market)
  • the longer someone is without a job, the harder it is for them to find paid employment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Under-employment

A

when workers are willing to supply more hours of work than their employees are prepared to offer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Hidden unemployment:

A

people who do not have work but who are not counted in government reports (e.g those who have stopped looking for jobs, disability benefits, care for elderly)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Seasonal unemployment

A

people without paid jobs due to the time of year when there are seasonal changes in demand, production & employment (e.g farming, tourism, retailing, hospitality)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Frictional unemployment

A
  • Workers seeking a better job or who are between jobs
  • It affects people who are on short-term employment contracts (e.g school leavers, people looking for a career change, early retired coming back to labour market, mothers returning)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Zero-hour contracts

A

They do not guarantee a minimum no. of working hours each week (more likely to be young, part-time, women)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Structural unemployment

A

Unemployment caused by lack of suitable skills for jobs available; a result of de-industrialisation or other structural changes in an an economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Causes of structural unemployment

A
  • because of disincentive effects including the unemployment trap
  • can happen because of other barriers to people finding work
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Barriers to work

A
  • unaffordable housing
  • the high cost of childcare expensive transport services
  • new jobs often require new skills (cost of re-training)
  • employer discrimination against some groups
22
Q

Demand deficient/ cyclical unemployment

A

involuntary unemployment due to lack of AD of g/s (also known as Keynesian unemployment)

23
Q

What causes demand deficient/ cyclical unemployment?

A

due to a lack of demand for g/s
- in a recession, firms labour shed and real national output contracts = increase in spare productive capacity. Firms then cut their workforce & cyclical unemployment rises

24
Q

How does labour shedding cause cyclical unemployment?

A

recession = labour shedding = real national output contracts = increase spare productive capacity = firms cut workforce = cyclical

25
Q

Labour shedding

A

when firms reduce employment to cut their costs

26
Q

Main economic costs of a high & rising level of unemployment

A
  • Loss of current & future income
  • Changing pattern of jobs in the economy
  • slower long-run trend rate of economic growth
  • risks of a period of price deflation
  • erosion of people’s skills (loss of human capital)
  • fiscal (budget) costs to govt
27
Q

Costs of unemployment (loss of work experience)

A
  • reduced employability from depreciation of skill
  • gaps in CV may neg influence potential employers
  • decline in quality of human capital as skills decline
28
Q

Costs of unemployment (loss of current & future income)

A
  • vulnerability to consumer debt often at very high interest rates
  • decline in physical health & increase in psychological stress making it less likely for someone to find work again
29
Q

Costs of unemployment (changing pattern of jobs in the economy)

A
  • new jobs in the recovery stage are different from lost one
  • structural unemployment which makes it harder to get long-term unemployed people back into new jobs
30
Q

Economic scarring

A

the medium long term damage done to one or more economies following a severe economic shock which then leads to a recession

31
Q

Risks of economic scarring from COVID

A
  • Fall in business investment = an ageing of the existing capital stock
  • Rise in long-term unemployment & economic inactivity in the labour market
  • Increase in business failures including many previously commercially viable business
  • Shrinkage in the capacity of the financial system to lend
32
Q

How does real wage inflexibility/classical unemployment (min wage) cause unemployment?

A
  • Real wages don’t move downwards easily so often people might be prepared to work for less but wages don’t go down to that level
  • If wage rates are high, demand will be low & more ppl will want to work so supply/ labour will increase
33
Q

How might migration impact employment and unemployment?

A

Increase immigration = more people in the labour market (some of whom get job and some who do not or replace others already working) = more employment

34
Q

How might skills shortages impact employment and unemployment?

A
  • reduced employability from depreciation of skill
  • gaps in CV may neg influence potential employers
  • decline in quality of human capital as skills decline
35
Q

How could unemployment impact consumers?

A

lower living standards for consumers

36
Q

How would unemployment impacts firms?

A

falling sales revenues and profits for firms

37
Q

How would unemployment impacts workers?

A

opportunity cost (the g/s which could have been produced by the unemployed)

38
Q

How would unemployment impacts government and society?

A

lower tax revenues for the government
- higher expenditure on benefits

39
Q

Main social costs of a high & rising level of unemployment

A
  • Loss of work experience
  • rising income inequality
  • externalities form deeper social problems
40
Q

Main social costs of a high & rising level of unemployment (loss of work experience)

A
  • decreased employability from depreciation of skills
  • decrease in quality on human capital
41
Q

Main economic costs of a high & rising level of unemployment (loss of current & future income)

A
  • vulnerable to consumer debt due to high interest rates
  • decrease in physical and mental health = less likely to join
42
Q

Main economic costs of a high & rising level of unemployment (changing pattern of jobs)

A
  • due to migration
  • structural unemployment
  • new industries
  • occupational immobility- harder for people to get into new jobs
43
Q

Main economic costs of a high & rising level of unemployment (slower long-run trend)

A
  • decreased output
  • economy inside PPF
  • decreased efficiency
44
Q

Main economic costs of a high & rising level of unemployment (fiscal costs)

A
  • govt need to pay more
  • decreased tax revenue (direct) = budget deficit
45
Q

Main social costs of a high & rising level of unemployment (rising income inequality)

A
  • increased relative poverty
  • increased demand on NHS
46
Q

Costs of unemployment evaluation

A

Depends on the reasons for unemployment e.g lack of skill

47
Q

Would cutting wages solve real wage unemployment? (Keynesian view)

A
  • Keynesian economists stress the need for govt to boost AD
  • in a recession, cutting wages = a fall in spending since ppl have less income = reduce aggregate demand = lower economic growth. = less demand for labour
48
Q

Would cutting wages solve real wage unemployment? (Classical view)

A
  • they make the assumption that labour markets are perfectly competitive
  • however, in the real world, there are many labour market imperfections e.g monopsonistic labour markets
  • so cutting wages may not boost demand for labour
49
Q

What are two effects of a rising unemployment?

A
  • loss of skill & productivity (creates insecurity in the workforce = lower morale/motivation= low prod.)
  • lower consumer spending (lower demand for income elastic products)
50
Q

How might unemployment actually help confidence?

A

Additionally, there is lower staff turnover since employees are less likely to be able find other jobs or want to move in an uncertain economic climate.
- Therefore the firm might be more secure.

51
Q

How might unemployment have no effect on demand for goods?

A
  • demand for inferior goods

Theme 2 (19 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions