2.1.3 Unemployment

Question 1

What does the term ‘in employment’ mean?

Answer 1

To be in employment is to be actively working more than 1 hour a week for a wage. Only applies for people over the age of 16.

Question 2

What does the term ‘unemployment level’ mean?

Answer 2

The unemployment level is the total number of people who are looking for and available for work but not in work.

Question 3

What does the term ‘unemployment rate’ mean?

Answer 3

The percentage of people in the economically active population who are not in work.

Question 4

What is meant by the ‘labour force’?

Answer 4

The number of economically active people who are between ages 16-65 and are available to work.

Question 5

What is meant by ‘economically inactive’?

Answer 5

This is if you are at the working age but not looking for work; people on maternity leave, people in education.

Question 6

What is meant by discouraged workers?

Answer 6

People who have given up looking for work.

Question 7

Define structural unemployment.

Answer 7

People who are unemployed due to the decline of an industry.

Question 8

Define cyclical unemployment.

Answer 8

People who are unemployed due to the economic cycle i.e. recession.

Question 9

Define frictional unemployment.

Answer 9

People who are unemployed as they are between jobs i.e. left one job and not in work for a period of time before joining another.

Question 10

Define youth unemployment.

Answer 10

People who are under 24 and looking for work.

Question 11

Why is youth unemployment particularly undesirable?

Answer 11

Because if a young person doesn’t get a job they are likely to become discouraged and stop looking for work which leads to higher GE as they will be claiming benefit and it will decrease the potential growth of the economy.

Question 12

Define voluntary unemployment.

Answer 12

People who turn down a job offer due to the current wage.

Question 13

Define involuntary unemployment.

Answer 13

When someone is willing to accept a job but cannot find one.

Question 14

Define the participation rate

Answer 14

This is similar to being economically active and is the number of people between 16-65 who are actively working or seeking work.

Question 15

What is the dependancy ratio

Answer 15

This is the number of people aged 0-15 and 65+ compared to those who are 16-65.

Question 16

What is meant by undermployment.

Answer 16

When someone would like to work full time but is only working part time or when someone takes a secondary job offer.

Question 17

What is meant by seasonal unemployment.

Answer 17

When someone is only employed seasonally and out of work during other seasons.

Question 18

Explain how the Claimant Count measure of unemployment is calculated.

Answer 18

The claimant count measures the number of people seeking JSA (Job Seeker Allowance):

• Must be over 18
• Must be under 67
• Must be looking and available for work.

Question 19

Explain how the ILO unemployment measure is counted

Answer 19

International Labour Organisation (ILO) is the international standard for comparison across countries and is taken from the Labour Force survey of around 60,000 people:

• Must be 16+
• Must have sought for work in the last 4 weeks
• Must be available to work in the next 2 weeks.

Question 20

What impact does migration and immigration have on unemployment?

Answer 20

This will increase the labour pool in certain areas making them more condensed meaning that as the population increases, the unemployment level will increase as well. If these migrants can plug a skill gap then it will decrease the dependency ratio as there are more people in the economy working and less people joining the inactive population.
However if they join the inactive population then they will increase the dependency ratio.