unemployment Flashcards
(16 cards)
What is unemployment
The situation where people who are willing and able to work cannot find a job.
How do you work out the unemployment rate
number of unemployed people/labour force x100
What are the five types of unemployment
seasonal unemployment
structural
cyclical
seasonal
voluntary
What is seasonal unemployment
When people are unemployed at certain times of the year due to seasonal work (like tourism)
What is cyclical unemployment
Caused by a lack of demand for goods and services during an economic downturn
What is structural unemployment
When industries decline workers because of their skills that don’t meet up with job requirements this is usually caused by globalization, lack of education
What is frictional unemployment
Temporary unemployment when people are between jobs and entering the work force which is often short term
What is voluntary unemployment
When people choose not to work even though jobs are available (may be low paying jobs)
What are some of the causes of unemployment
technology advances
economic recession
globalization
lack of education and skills
lack of education
What are some of the ECONOMIC impacts of unemployment
Lost output (reduces GDP)
Increased government spending (on benefits)
lower tax revenue for the government
reduced consumer spending
What are some of the SOCIAL impacts of unemployment
poverty (lower living standards)
social problems (breakdowns or crime)
health issues (stress, depression)
loss of skills
What are some government policies used to reduce unemployment
fiscal policy
monetary policy
apprenticeship
infrastructure projects (work in construction)
apprenticeships
How is unemployment measured
Claimant count
Labour force service
How does the claimant count measure unemployment and what are the pros and cons
Measures the number of people claiming unemployment-related benefits
It’s cheap and quick to calculate
However not all unemployable people claim benefits.
How does the Labour force service measure unemployment and what are the pros and cons
A survey of households to determine who is unemployed and is actively seeking work.
It is more accurate and internationally comparable
However it’s expensive and time consuming
What is the natural rate of unemployment
Even in a healthy economy there will always be unemployment due to frictional and structural unemployment
