Unemployment Flashcards
(16 cards)
Reasons for being economically inactive in order of % of society
- student
- long term sick
- looking after family
- retired
- other (disabled etc)
- temporary sick
- discouraged workers
What fraction of unemployed people are recent entrants into the workforce
1/3
Why is the unemployment rate lower than it seems
Because economically inactive people aren’t accounted for
Define the labour force
Number of unemployed + number of employed
Define the unemployment rate
Percentage of labour force which is unemployed
Define the labour force participation rate
The percentage of labour force which is unemployed
Difference between men and women labour force participation
- grown closer together
- more males leaving the labour force
- more women joining the force
How to measure unemployment
- the Claimant Court: number of people claiming unemployment benefits compared to number of people paying income tax
- labour force survey
Define the natural rate of unemployment
The rate which the unemployment rate always fluctuates
Define cyclical unemployment
Short-term deviations away from the natural rate
What are the components of the natural rate of unemployment
- structural unemployment
- frictional unemployment
Define structural unemployment
When the number of jobs in a certain field are insufficient to satisfy the demand
Define frictional unemployment
It takes time for workers to find a job that best suits their skills
Why do changes in the economy lead to unemployment
- it takes time for workers and employers to match
- skills become redundant and workers have to retrain
Name strategies for reducing unemployment
- reducing minimum wage
- reducing the benefits of unemployment
- retraining useless skills
- reducing the time it takes for people to find a job (job centres & education)
What is the function of unions
- bargains with employers over wages and conditions
- results in higher wages and less flexibility for employers
