2.5 - Full Employment

Question 1

Define ‘in employment’

Answer 1

People who work in firms, other organisations, or self-employed.

Question 2

Define ‘unemployed’

Answer 2

People who are economically active but not in employment.

Question 3

Define ‘economically inactive’

Answer 3

People of working age not looking for work for a variety of reasons

Question 4

Define ‘workforce’

Answer 4

People who are economically active, either in employment or unemployed.

Question 5

Define ‘discouraged workers’

Answer 5

People who have been unable to seek employment and no longer eager to do so.

Question 6

List the 2 measures of unemployment

Answer 6

LFS - Labour force survey / ILO international labour organisation
Those who are economically active, seeking work for the past 4 weeks but unemployed, able to work for the next 2 weeks.
Or able to start work in the next 2 weeks.

Claimant Count Rate
Calculates amount of people claiming benefits. (Jobseeker’s Allowance)

Question 7

State the problems with the measurements of unemployment

Answer 7

Only includes people who are eligible and want to claim the unemployment benefits
ILO/LFS based on a sample of evidence, data does not fully represent a nation.
Neither measurements addresses the issue of under employment.
Claimant count hard to compare to other countries

Question 8

Causes of unemployment

Answer 8

Frictional unemployment
Structural unemployment
Cyclical unemployment and demand deficient
Classical/real wage unemployment
Voluntary unemployment

FR CVS

Question 9

Evaluation for unemployment

Answer 9

Duration of unemployment (1 day due to weather or years due to wars)
Cause of unemployment (pandemic or corruption)
Effective government policies
The trend
Type of unemployment (real wage or technological)

Question 10

Define ‘underemployment’

Answer 10

Individuals employed in a second choice occupation, or work in less than full time when they would like to.

Question 11

Define all 5 unemployment causes

Answer 11

FRCVS

Frictional - unemployment caused by job searching, switching from one job to another.
Real wage - unemployment caused by real wage above the equilibrium level, causing excess supply of labour or unemployment
Cyclical - unemployment caused by the downturn of the economic cycle eg recession.
Volunteer - unemployment caused by individuals who chooses not to accept a job due to ongoing wage rate
Structural - unemployment caused by changes in the pattern of economic activity within an economy.