Chapter 30 Employment and Unemployment

Question 1

Define unemployment

Answer 1

Being without a job while willing and able to work and actively seeking work

Question 2

Define employment

Answer 2

Being involved in a productive activity for which a payment is received

Question 3

Types of changes in the patterns of employment (7)

Answer 3

Industrial Structure
- As economy develops, employment moves from primary sector to secondary to tertiary

Female Participation in the workforce

Part time vs Full time job
-some people may opt for part time jobs for childcare or eldercare

Public vs private sector
-generally proportion of private sector is increasing while public sector is decreasing

employed vs self employed
- self employed is often more unstable (no emloyment benefits)

Quality of employment
- As economy developed high quality employment tends to increase

Question 4

Factors influencing the labour force partcipation rate (5)

Answer 4

The wages on offer
-Higher wages encourages people to seek work more

Social attitudes to working women
- Greater labour participation rate for countries that accept women to work

Provision for the care of children and elderly
- Greater the availability of childcare and eldercare, the greater labour force particpiation rate

Social attitudes towards disabled
- The more society accepts the disabled the greater labour force participation rate

The proportion of people who go into higher education
- More people going into higher education reduces the labour force participation rate but increases the quality of those labourers

Question 5

What are the ways of measuring unemployment(2)

Answer 5

count those in receipt of unemployment related benefits

Carry out labour force surveys (a measure of unemployment which counts as unemployed people who identify as such in a survey)

Question 6

What are the causes and types of unemployment (3)

Answer 6

Cyclical unemployment
- occurs during a recession when there is not enough demand in the economy

Strucutural unemployment
- unemployment occuring when workers lacks skill or not in the right location (geographical and occupational immobility)
- Strucutural unemployment can occur when technologies replace jobs which were done by people - known as technological unemployment

Frictional unemployment
- Short term unemployment which occurs when people are between jobs
- Search unemployment is when it takes time for worker to find the right job
- if firm doesnt provide consistent employment, casual or seasonal unemployment can occur

Question 7

Consequences of unemployment for those unemployed (2)

Answer 7

fall in income

reduced chance of gaining another job

Question 8

Consequence of unemployment for the firm (2)

Answer 8

benefit from unemployment
- employ unemployed to expand production
- unemployed do not press for higher wages

high rate of unemployment –> low demand for most firms products —> firms reduce production

Question 9

Consequence of unemployment for the economy (2)

Answer 9

Economy doesn’t use all of its resources <- Opportunity cost of economy forgoing the opportunity to produce more capital and cons goods

tax revenue is lower while govt spending incraeses on unemployment benefits