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Economics - Macro > 2:1:3 - Measures Of Economics Performance - Employment And Unemployment > Flashcards

2:1:3 - Measures Of Economics Performance - Employment And Unemployment Flashcards

1
Q

What is meant by the level of employment?

A

Is the number of people in work

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2
Q

What is meant by the rate of employment?

A

Is the proportion of people in work relative to the size of the workforce.

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3
Q

What is meant by workforce?

A

A measure of people of working age who are willing and able to work.

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4
Q

What are the 2 main ways of measuring unemployment?

A
  • The Claimant Count

- UK Labour Force Survey

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5
Q

What is the Claimant Count?

A

A measure of unemployment using the number of people who are claiming Job Seekers Allowance (JSA)

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6
Q

How do you get Job Seekers Allowance?

A
  • Need to have made a certain number of National Insurance contributions by working in the past.
  • Prove in an interview you are looking for work every 2 weeks
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7
Q

What is the amount given to someone on Job Seekers Allowance?

A

£73 a week

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8
Q

What can Stop or Reduce claims for the Job Seekers Allowance?

A
  • Have a partner who earns an income
  • Have savings above £6,000
  • Payments are stooped all together if you have more than £16,000
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9
Q

What age do you need to be in order to get Job Seekers Allowance?

A

Must be over 18 and below retirement age.

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10
Q

Why is the Claimant Count useful?

A
  • Quick
  • Cheap to obtain
  • Useful measure of hardship
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11
Q

What is the disadvantage of using the Claimant Count?

A

Doesn’t give the full picture of unemployment

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12
Q

What is meant by the Labour Force Survey?

A

A measure of unemployment of those out of work in the last 4 weeks and ready to start in the next 2 weeks

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13
Q

Out of the International Labour Organisation (ILO) and the UK Labour Force Survey which one is used in the UK?

A

Labour Force Survey

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14
Q

Is it legal requirement for every EU country to conduct this survey?

A

Yes

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15
Q

To make sure EU countries get data which can be compared to with other countries what must these EU countries do?

A

Use exactly the same methods

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16
Q

How does the UK Labour Force work?

A
  • Face-to-face interview with a quarterly telephone survey of 80,000 households
  • Asking several questions including if anyone has been out of work for 4 weeks and is ready to start in 2 weeks
  • Questions only relate to those who are over the age of 16
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17
Q

What is the advantage of using the Labour Force Survey rather than the Claimant Count?

A

It is more inclusive

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18
Q

What are the disadvantages of using the Labour Force Survey rather than the Claimant Count?

A

Survey data is 6 weeks out of date when it is published.

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19
Q

What is meant by Underemployment?

A

A situation in which a worker is employed but wants to work more hours

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20
Q

What is meant by Unemployment?

A

A situation in which someone is willing and available to work, but it not currently employed

21
Q

When did the idea of Underemployment become particularly important?

A

2008 financial crisis

22
Q

What factors affect employment?

A
  • The school leaving age - anyone in education is not counted as economically active, however in the long term is likely to make school leavers more employable
  • Number of school leavers entering higher or further education - University fees are making universities less attractive.
  • Level of Net migration - increases the size of the workforce
  • Availability of jobs - there are likely to be higher levels of employment if there are more jobs available
  • Level of taxes and benefits - if taxes on income are high or out-of-work benefits are generous, there is a deceptive for people to work.
23
Q

What is meant by Inactivity?

A

A measure of people of working age who are either unwilling or unable to work.

24
Q

What percentage of people who are working age in the UK are classified as inactive?

A

Over 20%

25
Q

What kind of people are Inactive?

A
  • Students in further education

- People looking after children

26
Q

What is the main problem with the measure of inactivity?

A

It can make levels of unemployment look lower than they actually are.

27
Q

How many people are unable to work because of health issues?

A

3 million

28
Q

What is meant by the Classical View on Unemployment?

A

There are only unemployed people who are not able and willing to work at the going wage rate. If people could accept lower wages they would find work.

29
Q

What is the solution to the Classical View of unemployment?

A

Laissez Faire - leave the market to get on with it and eventually the problem of unemployment will go away.

30
Q

What is meant by Real Wage Unemployment?

A

A measure of people who are unwilling to work at the going wage rate.

31
Q

What can real wage unemployment also be called?

A

Real Wage Inflexibility

32
Q

What do people who think that real wage unemployment think is the solution to this?

A
  • Out-of-work benefits should be cut
  • Trade unions should be restricted
  • Should not be a minimum wage
    Therefore unemployed people should be forced to work
33
Q

What do people who believe in the Keynesian view believe?

A

People can be unemployed even in the long run, because there is insufficient aggregate demand in the economy.

34
Q

What is meant by Demand-deficient unemployment?

A

Also known as cyclical unemployment this is caused by a lack of of aggregate demand in an economy such as during a recession

35
Q

What are the causes of Demand-Deficient Unemployment?

A
  • Too much saving
  • A lack of business confidence
  • an increase in the value of money
  • Slow rates of productivity growth relative to other countries
  • External shocks such as oil price rises
  • Increased use of imports
36
Q

What did Keynes believe solves Demand-deficient unemployment?

A

Fiscal or Monetary Policy

37
Q

What is meant by Structural Unemployment?

A

A measure of worker who lose jobs in a declining industry and do not have the skills to join other industries.

38
Q

What is meant by Frictional Unemployment?

A

A measure of people who are between jobs, people who are moving from one job to another.

39
Q

Why is Frictional Unemployment actually a good thing?

A

Because this kind of unemployment is a sign of a healthy, flexible labour market with people willing to change jobs in order to improve their prospects.

40
Q

What is meant by Seasonal Unemployment?

A

A measure of people who only have jobs only at a certain time of the year.

41
Q

How can seasonal unemployment be addressed?

A

Developing the mobility & geographical mobility of Labour

42
Q

What does Migration look at?

A

Immigration (people moving into the country) and Emigration (people moving out of a country)

43
Q

What is Net Migration?

A

Immigration - Migration

44
Q

Why might Migration occur?

A

Because people are looking for:

  • Better paid work
  • Do not agree with the way in which they are being taxed
45
Q

What social reasons can cause Migration?

A
  • To study abroad
  • Social and Political Problems
  • Accompany family members
  • Follow a different lifestyle
46
Q

If immigrants come into a country to fill job vacancies what will this leads to?

A

Increase in employment

47
Q

What will happen if immigrants are looking for work but either do not find it or displace other people from work?

A

Employment may be unchanged and unemployment (labour surplus) might increase

48
Q

The higher the level of [……..] in the labour force, the more flexible workers will be if there is a change in requirement in the labour market.

A

Skills

49
Q

What are the effects of unemployment on the economy?

A
  • Costs to consumers - people will have lower incomes and living standards will fall
  • The cost to firms - Firms will find that people spend less so they will have to lower prices and make less profit.
  • The cost to workers - Workers without work might find the skills become obsolete
  • The cost to government - As unemployment rises the government has to pay more in jobseekers benefits and will receive less in tax.
  • The cost to society as a whole - the economy could produce more without anything being given up. Unemployment can cause crime, civil unrest and other social problems.

Economics - Macro (27 decks)

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