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AS Economics > 2.1.3 Employment and Unemployment > Flashcards

2.1.3 Employment and Unemployment Flashcards

1
Q

what is unemployment?

A

when someone is able to work and is activley seeking work but they are not currently working

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2
Q

how is the unemployment rate calculated?

A

the % of unempolyed people out of the active population

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3
Q

what is the unemployment level?

A

the number of people unemployed

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4
Q

how is the employment rate calculated?

A

number of employed people/ total working age population

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5
Q
A
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6
Q

how is the activity rate calculated?

or articipation rate

A

active population/ working age population

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7
Q

why would
* employment rates
* unemployment rates
fall

A

emplyment:
number of people emplyed decreased, working age population increased

unemployment rate:
number of people economically active increases, unemplyment decreases

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8
Q

what would the effect of an increase in immigration be on employment and unemployment level?

A

Increase employment if they have definite secure jobs
Increase In population size,increase in labour supply, decrease in real wage price, increase in demand for labour
Increase in use of public services, increase in jobs made in public services

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9
Q

describe the ILO Labour Force survey

International Labour orgainisation

A
  • from 80,000 households ask if out of work for 4 weeks and are able to start week in next 2 weeks
  • then they are classified as ‘unemployed’
  • then use this data as a sample to estmate the unemplyment rate for UK
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10
Q

describe the claimant count

A
  • measures how many people are claiming benefits through job seekers allowance
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11
Q

what are the limitations around the two measures of unemployment?

A
  • **ILO Labour Force Survey: ** not a representative, as is just a sample
  • Claimant Count: not everyone seeks benefits, if have big savings then not allowed (underestimates)

ILO is the official measurement

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12
Q

what is under employment?

A

when one is currently working however
* working fewer hours than they want to
* underusing their skills

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13
Q

what are the 5 different types of unemployment?

A
  • real wage/ classical unemployment
  • structural unemployment
  • cyclical/demand unemployment
  • frictional unemployment
  • seasonal unemployment
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14
Q

define claimant count

A

a measure of unemplyment; the number of people recieving benefits for being unemployed

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15
Q

define unemployment

A

those who are without work and able to start working in the next 2 weeks and have been activley searching for work in the past 4 weeks

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16
Q

define the labour force survey

A

a measurment of unemployment which surveys people and classes thm as employed, unemployed or economically uneavtive as per to the ILO definitions

17
Q

what is the active population?

A

people of working age (16-64) who are able to work and actively seeking work or activley working

aka the workforce

18
Q

what is the inactive population?

economically inactive

A

those of working age who are not activley seeking work and not working

19
Q

how is is the unemployment rate calculated?

A

(number of unemployed people/ economically active population) × 100

percentage of people unemployed

20
Q

how is the employment rate calculated?

A

(number of people in employment/number of people aged 16-64) × 100

21
Q

what is real wage unemployment?

A
  • wages above equilibrium
  • firms cannot afford
  • excess of supply of labour

aka classical unemployment

22
Q

show real wage unemployment graphically on a labour market diagram

A
23
Q

what are some causes of real wage unemployment?

A
  • national minimum price set by goverment
  • arguments by trade unions
24
Q

what is demand deficent unemployment?

A
  1. no one wants to buy anything (no demand for goods and services)
  2. firms produce less, downsize, fire workers
  3. firms must therefore reduce their derived demand for labour
  4. creating unemployment
25
Q

show demand deficent unemployment graphically

A
26
Q

what is structural unemployment?

A

when the structure of an economy changes, jobs shift from one sector/location to another, leaving people unemployed

27
Q

what are the two causes of structural employment?

A
  • occupational immobility
  • geographical immobility
28
Q

what is occupational mobility?

A

lack of any other skills stops people from switching between job sectors

29
Q

what is geographical imobility?

A

when workers can’ move between diffferent jobs because struggle to move to different areas
eg: London= time consuming, expensive, family ties

30
Q

how can the goverment intervene with
* geographical imobility
* occupational imobility

A
  • geographical: improving transport links, relocation subsidies
  • occupational: education (training/ apprenticeships)
31
Q

what is frictional unemployment?

A

temporal unemployment while searching for a new job

32
Q

what is seasonal unemployment?

A

unemplyment during certain seasons, as their job is seasonal dependant

33
Q

why may unemployment be increasing?

A
  • increased automation: less low skilled jobs eg: cashiers, replacing human labour
  • slower economic growth: less job creation
  • falling incomes: less consumption, less demand for labour
  • uncertainty in economy: discourages firms from investing and expanding
34
Q

why may under emploment increase?

A
  • recession/ lack of demand in the market: cannot work as many hours as they want
  • increased use of technology/ automation: replacing human labour
    *
35
Q

why is the claimant count generally lower than the ILO?

A
  • It is becoming more difficult to claim unemployment benefits: factors such as savings as accounted for
  • stigma issues (none for ILO as it is a private survey but high stigma for benefits)
  • frictional unemployment not shown in claimant count but is shown in ILO
36
Q

what is the effect of immigration on employment?

A
  • increased supply of labour, lower wages, increased deamnd for labour
  • increased use of public services, more jobs in public services
  • more population means increased consumption, more jobs
  • immigrants can fill in vacancies that cannot be filled by indigenous workers
37
Q

what are the effects of immigration on unemployment?

A
  • may not have sufficent skills, increase in unemployment
  • in short term increase in immigration means will be searching for jobs increases unmeployment
38
Q

evaluation for immigration effects on employment and unemployment

A
  • magntitude of net migration: emigration figures not included
  • depends on the skill levels of the migrants
  • different industries affected differently
  • if economic growth then can take on more labour without unemployment increasing

AS Economics (24 decks)

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