2.1.3 Unemployment ✅ Flashcards
What are the two ways that measure unemployment?
Claimant count = number of people receiving benefits.
labour force survey = sample of people who are asked as about personal circumstances/activity.
Negative of claimant count and labour force survey?
Claimant - stricter requirements (over 18, can’t have partner working).
Labour survey - can be prone to statistical error.
Positive of claimant count and labour force survey?
Claimant count - not prone to statistical error.
Labour survey - used across the world (good for unemployment comparison).
Difference between unemployment and underemployment?
Unemployment is when those willing to work can’t find a job however underemployment is those working who can’t find a job for their level of experience/qualification or enough hours.
Define employed?
Those who are working 1+ hours per week paid, min 15+ hours per week unpaid work for family business, is temporarily away from work, on gov support training scheme.
define inactive in an economy?
Neither employed or unemployed (not participating in job market).
Define unemployed?
Someone wishing working age who is actively searching but can’t find a job for the past 4 weeks, are prepared to start work within 2 weeks.
How do you calculate the rate of unemployment?
Unemployed/ work forces X 100
How to calculate inactive rate?
Unemployed plus not working/ population of working age
How to calculate activity rate?
Economically active/ population of working age X100
What is the difference between the classic and Keynesian view on unemployment
Classic view focuses on market sorting it out however Keynesian focuses on AD controlling unemployment.
Name the cases of unemployment?
- seasonal
- structural
- frictional
- Cyclical
- real wage inflexibility
What is structural unemployment?
- geographically in mobile (not willing to move to get a job).
- occupation in mobility (lack desirable skills).
Reginald unemployment - area loses job due to decline in industry
What unemployment is transitional between jobs? How can this be reduced?
Frictional unemployment.
Career advice.
What is cyclical unemployment?
Demand deficiency (decrease in AD) so as a reaction to this firms reduce labour to suit demand.
Draw the two graphs that can show cyclical unemployment?
1) ppf inward shift
2) ad diagram decreasing
What is real wage inflexibility?
Excess supply of labour as wages are put above the equilibrium price (min wage) which leads to cuts.
What can cause changes in the rate of unemployment?
- immigration or migration
- state retirement age
- level in taxes or benefits
- number of school students going to higher education
Why is increased employment a significance? What does it indicate?
- more tax collection (vat as people buy more)
- pay less benefits
- increased income
Econ growth
What are significance of migration to unemployment?
- Provides more jobs due to circular flow of income.
- Leads to lower wages particularly in low skill jobs (excess supply).
How are skills significant to unemployment?
- Developing economies require high skills for workforce.
- highly skilled workforce = more adaptable less prone to unemployment.
Name impacts of unemployment on all economic agent?
Workers, firms, consumers, government.
Check notes.
Name the effects of unemployment to society as a whole?
- Social deprivation (more crime and divorce, bad health).
- Further loss of jobs (workers lose demand).
- Decrease in PPF.
- Decrease in national output.
What do unemployment calculations miss? Give examples.
Hidden unemployment.
- On gov training scheme but want job.
- working part-time but want full.
What are the significance of changes in activity? (Active/inactive)
- Increase = decrease size of labour force thus fall in productive potential of country. (Lower GDP/tax rev).
- Decrease = more unemployment if there r no jobs available.
What does high inactive rate indicate?
Lack of job opportunities or demographic factors.
Example of structural unemployment?
After 2008 crisis manufacturing workers found it difficult to find jobs in tech sector.
