Unemployment Flashcards
(24 cards)
What is the Labour force?
Those in work and those activity seeking work.
What is unemployment?
People of working age who are available, willing and able to find work and are actively seeking it.
What affects the labour force?
School leaving age, demographics (population structure), immigration, disease/war/natural disasters, birth rates.
What is the definition of economically inactive?
Those in full time education, raising a family, training, ill or retired.
What are the economically inactive affected by?
Incentives to work (benefits, costs of living, tax), Optimism, unemployment levels = discouraging, epidemics, childcare costs, tuition fees.
What are the two types of unemployment data?
Level of unemployment (number of people unemployed), rate of unemployment (% of unemployed out of the whole labour force)
How do you work out the rate of unemployment?
(No of unemployed people/labour force) x100
What are the 2 measures of unemployment?
Labour force survey and the claimant count
What is the labour force survey?
Measure of unemployment. Carried out by the ONS, survey of 60,000 households. Average release every 3 months.
What are the advantages of the labour force survey?
Accounts those who are unemployed but don’t receive benefits, good for comparison (used internationally)
What are the disadvantages of the labour force survey?
Expensive, sampling errors, doesn’t include discouraged workers
What is the claimant count?
Measure of unemployment. Counts all those taking employment related benefits.
What are the advantages of the claimant count?
Cheap. Quick and readily available.
What are the disadvantages of the claimant count?
Doesn’t account for those who are employed but can’t get benefits, fraudsters, not suitable for international comparison.
What are the types of unemployment?
Seasonal, structural, frictional, cyclical, real wage, hidden.
What is seasonal unemployment?
Due I regular seasonal changes e.g agriculture, tourism
What is structural unemployment?
Cause by long run decline in demand (international competition, change in patterns of trade) and mismatch between skills and new jobs available (lack of training and mobility of labour)
What is cyclical unemployment?
Involuntary unemployment due to lack of demand (recession), or rising productivity as demand for labour falls.
What is frictional unemployment?
Occurs between finding jobs, reduced by labour immobility and incentive to work.
What is real wage unemployment?
Excess supply of labour so minimum wages cause unemployment. Little evidence.
What is hidden unemployment
Not picked up by stats e.g discouraged workers
What are the effects of unemployment?
Lower living standards, increased borrowing, hysteresis, less tax revenue, emigration, less output, reduced imports.
What is hysteresis?
The longer your out a job the harder it is to find one.
What are govt policies to reduce unemployment?
Demand side policies: subsidies, achieve sustained growth, low interest rates ( monetary policy)
Supply side policies: improving incentives, improving human workforce, employment subsidies
