unemplyment/employment Flashcards
(24 cards)
What is unemployment?
Unemployment refers to the condition where individuals who are capable of working, are actively seeking work but cannot find a job
What is the unemployment rate?
The unemployment rate is the percentage of the labour force that is unemployed and actively seeking work.
How is the unemployment rate calculated?
UnemploymentRate= NumberofUnemployed/
LaborForce ×100
What is Frictional Unemployment?
Short-term unemployment occurring when people are between jobs or entering the labor market.
This type of unemployment is often voluntary as individuals transition between jobs.
What causes Structural Unemployment?
A mismatch between the skills of workers and the demands of the job market.
Structural unemployment can be due to technological changes or shifts in the economy.
What is Cyclical Unemployment?
Resulting from economic downturns, where a lack of demand leads to job cuts.
This type of unemployment is often correlated with the business cycle.
What is Seasonal Unemployment?
Occurs when demand for certain types of labor is seasonal, e.g., in agriculture or tourism.
Seasonal unemployment can be predicted and often repeats annually.
What is the natural rate of unemployment?
The level of unemployment that exists even when the economy is operating at full capacity, typically due to frictional and structural unemployment.
What is the labor force participation rate?
The percentage of the working-age population (usually ages 16–64) that is either employed or actively seeking employment.
What is underemployment?
Underemployment occurs when individuals are working fewer hours than they would like or are employed in jobs that do not use their skills or qualifications fully.
What is the difference between claimant count and ILO (International Labour Organization) measure of unemployment?
Claimant count: Measures those claiming unemployment benefits. It tends to understate unemployment.
ILO measure: Uses international standards and surveys a representative sample of the population, capturing a broader picture of unemployment.
What is full employment?
Full employment occurs when all individuals who are willing and able to work at prevailing wages are employed, excluding frictional and structural unemployment.
What are the economic costs of unemployment?
Lost output and GDP: A fall in national output as fewer people are working.
Government spending increases due to higher welfare and unemployment benefits.
Increased poverty and social exclusion.
Lower tax revenues as fewer people are employed and paying taxes.
What are the social costs of unemployment?
Psychological effects on individuals, leading to stress, depression, and reduced well-being.
Higher crime rates associated with poverty and social exclusion.
Breakdown of social cohesion due to growing inequality.
What is employment?
Employment refers to individuals who are actively engaged in work, earning a wage or salary, and contributing to the economy.
What factors affect employment levels in an economy?
Economic growth: A growing economy leads to higher demand for labor.
Government policies: Employment laws, welfare policies, and labor market regulations.
Technological advancements: Can create new jobs or make certain jobs obsolete.
Business confidence: Influences firms’ hiring decisions.
What is hidden unemployment?
Hidden unemployment refers to individuals who are not actively seeking work because they have become discouraged or are in part-time or temporary jobs but want full-time employment.
What is the role of trade unions in employment?
Trade unions represent workers’ interests, advocating for higher wages, better working conditions, and job security, which can affect employment rates and terms.
What are supply-side policies to reduce unemployment?
Policies aimed at increasing the efficiency and flexibility of the labor market, such as:
Improved education and training
Labor market reforms (e.g., reducing minimum wage or improving work incentives)
Reducing benefits to encourage job seeking
Increasing geographic mobility.
What is the Beveridge Curve?
A graphical representation showing the relationship between the unemployment rate and the vacancy rate. It illustrates how changes in the economy (e.g., recessions) affect both job vacancies and unemployment.
What is the difference between classical and Keynesian views on unemployment?
Classical view: Unemployment is caused by wage rigidity and labor market imperfections; full employment is the norm.
Keynesian view: Unemployment can be a persistent problem due to insufficient aggregate demand in the economy, which can be remedied by government intervention.
What is the NAIRU (Non-Accelerating Inflation Rate of Unemployment)?
The level of unemployment at which inflation is stable. If unemployment falls below this level, inflation tends to rise.
What is the labor market?
The labor market is where workers seek jobs and employers seek workers. It is influenced by supply and demand for labor, wages, and government policies.
