Measuring Unemployment

Question 1

Define Unemployment (2 ways)

Answer 1

The level of unemployment is the number of people looking for a job but cannot find one
OR
The rate of unemployment is the number of people out of work as a % of the labour force

Question 2

What are the two ways of measuring unemployment?

Answer 2

The Claimant Count
The Labour Force Survey

Question 3

What is the Claimant count?

Answer 3

The No of people claiming unemployment-related benefits from Gov including JSA, Universal credit and others

Question 4

Advantages of the Claimant Count?

Answer 4

Easy to obtain data
No cost in collecting data - recorded when people apply for the benefits

Question 5

Disadvantages of the Claimant Count?

Answer 5

Can be manipulated by the Gov to seem smaller - changing the rules to make it seem like unemployment was falling eg. school leaving age to 19
Excludes people looking for work but not eligible to claim

Question 6

What is the labour force survey?

Answer 6

ILO uses a sample of popn - asks those not working if they are looking for work. Those who say yes, regardless of benefits are taken into the ILO unemployment count

Question 7

Advantages of the LFS?

Answer 7

More accurate than claimant count
Internationally agreed measure - easier to compare with other countries

Question 8

Disadvantages of the LFS?

Answer 8

Expensive to collect data
May be unrepresentative of the popn - making it inaccurate

Question 9

Why does the government want to keep track of unemployment figures?

Answer 9

High rate of unemployment suggests economy is doing bad
Unemployment tends to lead to lower incomes and less spending - will affect companies
Means there is unused labour in the economy - fewer goods and services will be produced
Gov will have extra costs - Welfare benefits and less revenue as less tax will be paid

Question 10

What is the aim for unemployment?

Answer 10

For it to be Low