Theme 2: Unemployment Flashcards
(12 cards)
Define unemployment
Unemployment is the number of people who are willing and able to work but are not employed
What methods are there of measuring unemployment
The claimant court method, and the labour force survey
Explain the claimant court method
The claimant court method calculates the number of people who claim “job seekers allowance”
It depends on who the government deems entitled to benefits
Explain the labour force survey
The Labour force survey is an internationally agreed standard measure of unemployment
You must actively have sought work in the previous 4 weeks and be available to start work in the next 2 weeks
It is normally higher than the claimant court method because there are limits on who can claim benefits
What are the 5 different types of unemployment
- Frictional unemployment
- Cyclical unemployment
- Seasonal unemployment
- Real wage unemployment
- Structural unemployment
What is Frictional unemployment
Short term unemployment when workers are just shifting between jobs
What is Cyclical unemployment
When there is insufficient AD in an economy for workers to get jobs
What is Seasonal unemployment
When workers are laid of then re-employed at the correct time of year, e.g tourist workers being fired in winter, then hired in summer.
What is Real wage unemployment
When real wages are stuck too high so businesses cant afford to employ more people (often caused by the minimum wage)
What is Structural unemployment
When workers aren’t skilled enough to switch jobs
What is geographical immobility of labour
When workers live too far away to go to certain jobs
What is occupational immobility of labour
When workers don’t have the skills to go from job to job
