2.1.3 - Unemployment

Question 1

ILO measure of unemployment

Answer 1

Uses the Labour Force Survey

Question 2

Claimant Count

Answer 2

Counts number of recipients of Job Seeker’s Allowance

Question 3

Positives and Negatives of Labour Force Survey

Answer 3

Positives:
Inter country and time comparisons.
Rich data set.
Negatives:
Costly
Time consuming
Only done quarterly

Question 4

Positives and Negatives of Claimant Count

Answer 4

Positives:
Accuracy
Regional Differences
Monthly data
Negatives:
People may not meet criteria
Too proud to claim

Question 5

Immigration Impact

Answer 5

May fill jobs
May increase unemployment
Possibly drive wages down
Immigrants take low paid jobs

Question 6

Cyclical Unemployment

Answer 6

Unemployed due to weak aggregate demand, reducing demand for labour
Occurs in recession

Question 7

Frictional Unemployment

Answer 7

Unemployed to seek better job

Question 8

Structural Unemployment

Answer 8

Decline of major industry as people have unsuitable skills

Question 9

Seasonal Unemployment

Answer 9

Unemployed due to seasonal changes in unemployment

Question 10

Occupational Unemployment

Answer 10

Individuals unable to respond to changing jobs, industry or location

Question 11

Economic Inactivity

Answer 11

Section of working age population which is not in employment and therefore aren’t part of the working population
I.e.
Students
Long term illness
Retired

Question 12

Long term unemployment

Answer 12

People out of work for at least a year
More unlikely to find employment
Hysteresis occurs, total amount produced by labour force starts to fall

Question 13

Economics costs of unemployment

Answer 13

Slower trend rate of economic growth
Deflation due to falling AD
Income inequality
Loss of work experience
Loss of current and future income
Changing job patterns