2.1.3 Unemployment Flashcards
What is meant by ‘unemployment’?
those who are willing and able to work and are currently seeking work, but cant find anything at this given moment
What is the Claimant Count?
the amount of people claiming JSA
Give a reason why this may not be accurate
some may be ashamed to claim JSA so it does not show the whole unemployed population
What is the ILO measure of unemployment?
Labour force survey is the survey of 60,000 households analysing their employment status
Give a reason why this might not be accurate
it is under representative as it only represents part of the population
Which of the two measures is typically higher and why?
ILO, because by law you must complete it
What is meant by ‘underemployment’
when people are working in jobs where they would be over qualified
Why did this become more relevant post-Financial Crisis?
Many industries were shut down
What is meant by ‘employment’?
those in paid jobs right now
What is meant by ‘economically inactive’?
those willing and able to work but have been withdrawn from the work force due to circumstances
What is the difference between the population of a country and its labour force?
the population is everyone residing in the country
the labour force is everyone in the work force
Why do we find that Employment and Unemployment sometimes rise at the same time?
Old people leave the workforce
Young people join the workforce
What are the current retirement ages in the UK?
65 - 67
What is a ‘discouraged’ worker?
able to work but not actively seeking work
What is ‘structural unemployment’?
the industrial reorganisation due to technological changes
What is ‘frictional unemployment’?
when people jump from one job to another
What is ‘seasonal unemployment’?
when the industry doesn’t need workers all year round
What is ‘demand deficient-’ or ‘cyclical unemployment’?
when there’s a lack of demand, usually during times of economic decline or recession
What is ‘real wage inflexibility’?
when the real wage rate is above the equilibrium wage rate
Which of these types of unemployment is most likely to result in long term unemployment?
structural unemployment
How would a lack of skills in an economy effect the unemployment rate?
unemployment would go up
What is meant by ‘net inward migration’?
the difference between emigration and immigration
What is the likely effect of ‘net inward migration’ on employment rates?
employment rates go up
What is the likely effect of ‘net inward migration’ on unemployment rates?
unemployment goes down
How does unemployment affect the individual and his/her family?
poverty increases, disposable income goes down, MPS increases
How does unemployment affect consumers?
MPC does down
How does unemployment affect firms?
reduced profitability as they will have to cut back costs
How does unemployment affect those remaining in work?
employees may have loss of productivity and motivation
How does unemployment affect government?
loss of incentive to invest
How does unemployment affect society?
more poverty, more crime
Why might we expect, or even desire, the unemployment rate of an economy to be above 0%?
to maintain stable inflation
for real wage inflexibility
