4.7 Employment & Unemployment Flashcards
Why are employment patterns changing?
- Developing economies progress through different sectors (primary, secondary, tertiary)
- More women being employed
- Public sector work decreasing (privatisation)
- Increase in part-time workers
- Work from home (pandemic)
Describe the two ways unemployment is measured
ILO Labour Force Survey:
Global, sent to ~60,000 households every quarter, self-determine based on ILO criteria
The Claimant Court:
Counts people claiming benefits, more strict requirements
How are the unemployment, employment and labour force participation rates caluclated?
- No. actively seeking / labour force x 100
- No. in employment / population of working age x 100
- labour force / population x 100
What are the three main types of unemployment?
- Structural: mismatch between jobs and skills (changing sector, replaced by capital, production relocation)
- Cyclical: fall of aggregate demand (recession, workers laid off)
- Frictional: workers between jobs
What are the effects of unemployment on the individual?
- Loss of income
- Health issues
- Mental instability
- Increased risk of suicide
What are the effects of unemployment on firms?
- Loss of revenue
- Loss of output/production
- Changes of skill level in economy
What are the effects of unemployment on the government?
- Increased spending on benefits
- Reduced tax revenue
- Increased spending on retraining
What are the effects of unemployment on society?
- Increased crime
- Increased homelessness
Give examples of demand side policies that are likely to reduce unemployment
- Decrease corporation tax (hire more workers)
- Spend more on national defence (hire more workers)
- Decrease income tax, lower interest (increase consumption)
- Quantitative easing (investment increases)
Give examples of supply side policies that are likely to reduce unemployment
- Reduce trade union power, deregulation (hire more workers)
- Long term training subsidies (increase supply of skilled workers)
