2.3 - employment Flashcards
Employment
People who are willing and able to work and are of working age and in paid work
Unemployment
People without a job but are willing and able to work
Working population
All those of working age in an economy
Employment rate
% of working population who are employed
Labour Force
Everyone employed + unemployed in an economy
All those willing and able to work
Full employment
When all willing + able to work at the current price are in work
Economically inactive
Those unwilling / unable to work
Labour force survey
Considered unemployed if you are out of work but:
- Have sought work in last 4 weeks / could start work in 2 weeks
- Have a job and are starting in next 2 weeks
How is the LFS done
Face-to-face interviews with 60,000 households
Strengths of LFS
More accurate than claimant count
Little chance of inaccuracies - f2f
Can compare between countries
Weaknesses of LFS
Occurs every 3 months - OOD
More expensive
More time consuming
Claimant count
Worked out by how many seek benefits
Must prove they are seeking work if they are claiming benefits
Strengths of claimant count
Easy
Cost effective
Monthly - more up to date
Weaknesses of claimant count
Does not account for all unemployed - some may not claim benefits
Errors - some may claim when they do not qualify
Employment rate calculation
Employment / working age pop x100
Rate of unemployment Calculation
Unemployed / labour force x100
Labour Force Participation Rate
Labour force / working age pop x100
Effects of full employment
Greater productivity for firms
Higher AD - C + X + I rises
Increased confidence across the economy
Cyclical unemployment
Occurs due to lack of AD / neg economic growth
Structural unemploymnet
Decline in no. industries / firms due to changes in demand
Technological unemployment
New technologies replacing the role of workers
Regional unemployment
Structural unemployment in certain areas
Frictional unemployment
Unemployment between jobs
Search - time looking for best job
Seasonal - labour demanded only at certain times
Casual - out of work at irregular times between employment
Classical
Caused by wages driven up = surplus of labour
Effects of unemployment on the economy
Reduction in C
Rise in gov expenditure = rising taxes
Falling inflation
Effects of unemployment on businesses
Less human capital = lower production
Fall in cost of production - less wages to pay
Low productivity - workers worried ab job security
Consequences of unemployment on individuals
Less spending
Decreased job security
Fall in standard of living
