Unemployment Flashcards
Why is unemployment bad?
It is a waste of resources.
2 measures of unemployment
Claimant count
Labour force survey
What is the claimant count
number of people receiving benefits for being unemployed.
What is the labour force survey?
Categorises people over 16 to employed, unemployed or economically inactive
Employed def
Those who do more than 1 hour of paid work a week or are temporarily away from work (e.g. on holiday), are on a government supported training scheme or do minimum 15 hours of unpaid work for their family business
Unemployed def
Those of working age who are without work, able to work and seeking work and have actively sought work in the last 4 weeks and are available to start work in the next 2 weeks.
Inactive def
Those who are neither employed nor unemployed; they are people of working age not seeking employment as well as those seeking employment but not able to start work e.g. those in study, looking after family, health related issues, discouraged workers (those who are fed up of applying), retirement and those who do not want or need a job.
Comparisons between lfs and claimant count
- Some people may not be included in the LFS unemployment measure but would be in the Claimant Count. These may include people working in the hidden economy or those who fraudulently claim benefits.
- However, some people aren’t eligible for benefits but are classed as unemployed so would appear in the LFS but not the Claimant count. This can be if their partner is working, if they are looking for work along full-time study or if they are around State Pension Age. The LFS tends to be higher than the Claimant Count because of these reasons.
What is the employment rate
the percentage of the population of working age who are employed
What is the unemployment rate
the percentage of the economically active who are unemployed.
What is underemployment?
those who are in part time or zero hour contracts when they would prefer to be full time and people who are self-employed but would rather be employees
It also includes those who are in jobs which do not reflect their skill level
Why does underemployment increase during recessions
firms will just reduce staff hours instead of making them redundant and having to pay expensive redundancies packages.
Frictional unemployment
Frictional unemployment is due to people moving between jobs. This could be due to new workers entering the labour market or people who have chosen to leave their previous job. These people may take a while to locate and gain a job that they are willing to accept.
Structural unemployment
This is a much more serious form of unemployment as it is a long term decline in demand in an industry leading to reduction in employment perhaps because of increasing international competition or technology.
Regional unemployment
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low levels of employment due to industry closures; this is made even worse by the fact that the loss of jobs can mean a fall in demand for other businesses in the area, forcing more closures and job losses.
