costs and benefits of employment

Question 1

costs of unemployment

Answer 1

-lost output
-deterioration of gov finances: welfare: vat and tax
-social costs: more riots and protests- homelessness, deprevation, crime rates, riots and protests, physical and mental health issues
-costs to other countries: less demand for exports in others
-lost income
-hysterisis: becomes long term, de-skilling

Question 2

benefits of unemployment

Answer 2

-greater pool of workers for firms to choose from
-low inflation
-imporved current account position: less spending on imports
-time for workers to find sustainable job

Question 3

evaluation of unemployment (benefits and costs)

Answer 3

-rate: at natural rate it is okay, unless this is very high
-duration
-type: structural is bad- occupational
-distribution: not high rates of youth (liable to suffer, not a lot of experience)