Macro - unemployment Flashcards
what is unemployment?
those who are jobless, available to work and are actively seeking employment.
does the not include the economically inactive/discouraged workers.
how do you calculate the unemployment rate?
the % of the labour force who are out of work
what is the policy objective of full employment?
a situation where people who are economically in the workforce and are willing to work (at going wage rates) are able to find employment.
how is unemployment measured?
claimant count
labour force survey
What is the claimant count?
monthly count of those who are unemployed based on benefits. Mostly job seekers allowance but also national insurance credits.
what is the labour force survey?
based on ILO definition of unemployment - those who are out of work and have actively sought for work in the last 4 weeks and are available to work in the next two weeks.
published by the office of national statistics every month.
what are the difficulties of measuring unemployment using the claimant count?
Some people claim the benefit but are not prepared to work.
some people are not eligible for benefits e.g. women returning to work after child birth who can’t find a job and want to work.
excludes those on government training schemes.
what are the difficulties of measuring unemployment using the ILO employment data - labour force survey?
based on sample evidence - possible statistical error.
some people may be unemployed because they cannot find work at their desired wage.
