2.1.3 Employment and Unemployment

Question 1

what is the UK working age

Answer 1

16-64 years

Question 2

define economically active

Answer 2

those who are employed and those who are unemployed.

Question 3

what is economically active also known as

Answer 3

labour force

Question 4

define economically inactive

Answer 4

people of working age who are not seeking work for whatever reason e.g full time students, illness

Question 5

define employment

Answer 5

either those working for firms or other organisations or self-employed

Question 6

define unemployment

Answer 6

those who are willing and able to work, but are not employed. They are actively seeking work and usually looking to start within the next 2 weeks

Question 7

define the unemployment level

Answer 7

the number of people who are unemployed

Question 8

define unemployment rate

Answer 8

the number of people (economically active) who are unemployed, expressed as a percentage of the labour force

Question 9

what is the formula for the unemployment rate

Answer 9

unemployed/labour force x100

Question 10

what are percentage points

Answer 10

the arithmetic difference between two percentages e.g from 40% to 44% is a four percentage point increase

Question 11

what are the two main measures of unemployment in the UK

Answer 11

The Claimant Count, The Labour Force Survey (conducted by ILO)

Question 12

define the claimant count

Answer 12

this counts the number of people claiming unemployment benefits, such as the Job Seeker’s Allowance

Question 13

what does a person who can claim the JSA have to prove

Answer 13

that they are actively looking for work

Question 14

what are pros of the Claimant Count

Answer 14

quick and easy to calculate
cheap to conduct as it is an administrative by-product of providing welfare benefits

Question 15

what are cons of the Claimant Count

Answer 15

accuracy issues - not everyone may know they are eligible
self-employed workers who are temporarily unemployed tend not to claim
changing criteria for JSA
some people who claim JSA aren’t actively seeking work
some have jobs in the hidden economy but continue to claim benefits

Question 16

define the LFS

Answer 16

quarterly survey of approximately 60,000/70,000 households compiled by the ONS to find out the number of people willing and able to work and actively seeking work

Question 17

what are pros of the LFS

Answer 17

internationally recognised
potential for analysis of data
picks up trends in sectors
generally accepted to be more accurate

Question 18

what are cons of the LFS

Answer 18

very expensive and time consuming to compile
subject to sampling and extrapolation errors (could misrepresent population)

Question 19

what is underemployment

Answer 19

occurs when workers have a job but cannot find a job that is suitable for their qualifications and experience or who cannot find enough hours to work

Question 20

why is underemployment a problem for the UK economy

Answer 20

it is becoming increasingly common (6.7% of labour force in 2022)

Question 21

what is the gig economy

Answer 21

a work arrangement where people perform short term, flexible and often freelance work, typically through online platforms or apps e.g food delivery drivers

Question 22

why has the gig economy grown in popularity

Answer 22

rise of technology, desire for flexibility

Question 23

what are zero-hour contracts

Answer 23

employment arrangements where workers are hired without a guarantee of work hours

Question 24

what is youth unemployment

Answer 24

the measured unemployment rate (proportion of economically active population who are unemployed) for all 16-24 year olds

Question 25

what is human capital

Answer 25

knowledge, skills and abilities that people have that enable them to produce goods and services

Question 26

give five reasons for why youth unemployment is relatively high

Answer 26

lack of experience ie weaker human capital
lack of education or training/qualifications needed for jobs available
age discrimination ie seen as less reliable or motivated
economic downturns ie young people often first to be laid off when economy is struggling
automation and technological advancements ie jobs replaced by machines

Question 27

what is the labour force participation rate

Answer 27

workers in the labour force compared to the number of people in the working population

Question 28

define net migration

Answer 28

the difference between emigration and immigration

Question 29

what are the consequences of migration

Answer 29

increased supply of labour to UK businesses of both skilled and unskilled workers
can lead to lower wages in some industries and more choice of workers with skills

Question 30

what stops wages from falling too low in the UK

Answer 30

national minimum wage

Question 31

what are the consequences of the UK skills shortage, particularly skills gap between sciences and practical trades

Answer 31

can lead to higher wages in these fields, increasing costs for firms

Question 32

how is the UK government looking to tackle skills shortages

Answer 32

apprenticeships

Question 33

outline causes of underemployment in the UK economy

Answer 33

graduates are unable to find work of graduate standard and are being forced to work in lower skilled jobs
workers are being put on zero hour contracts