Education and Unemployment Flashcards
3 types of jobs (3 education levels for work)
professional
clerical
skills + manual
where can skills for work be learned
formally through education
on the job
why is it difficult for every country to be high skilled
poverty traps (positive assortative matching in production)
as an alternative to technology as a key element of the production function, what can be used instead
education
education levels can lead to improvements in technology and innovation anyways so a highly skilled workforce is more efficient
how does the poverty cycle affect education
more incentive to invest in education when those around you have also and are in high skilled jobs
why are the benefits of education hard to define
individual benefits are clear but societal benefits are harder to measure eg better health and nutrition, better informed electoral
its difficult to separate the effects of education from the effects of innate ability and selection effect
what is innate ability
pre existing qualities that allow someone to succeed in life
what are some examples of selection effects
socio economic status
parental support etc
ways of improving education access in developing countries
free text books school meals improved parental involvement improved school governance free uniforms scholarships
globally, what is the return of a university degree, what does this mean
10%
for each degree you have, your possible income increases by 10%
why is education subsidised
upfront costs are hard to get loans for
dont want people in debt
therer are societal benefits of education
what is the argument for fairness in subsidised education
why should people who dont go to college pay for those who do
what is the argument for competitiveness in education
the people who dont go can still benefit as there will be a smarter electorate, more foreign direct investment and great social benefit
4 options for 3rd level fees
- Fees for none (completely subsidised)
- Fees for some (means tested)
3, Fees for all with cheap credit loans - Fees for all with no debt
benefits of no college fees
no barriers to entry
disadvantages of no college fees
underfunded resources
what are the disadvantages of means tested fees
difficult to do fairly eg edge case
what are the benefits of means tested fees
progressive
how has the government got equities in education
they have a share in the profit but no returns if there are losses
what is the risk associated with the government having equities in education
uncertainty that people may not be able to pay back their debt, or may not get great returns from the education
who is the labour force made up of
everyone who is unemployed or employed (ie able to work)~
should unemployment be measured against the labour force or the population
why
labour force
because its just those who are unemployed but also want to work. ie it would be pointless to include children, people in full time education and retirees
what is the participation rate
how many people in the population are in the labour force
what are 3 issues around measuring unemployment
including/excluding discouraged workers
timeline of updates
people who are only working part time because they cannot find full time jobs
who are discouraged workers
people who are no longer actively looking for jobs because they feel they cant find one
what is the problem with the timeline of updates when measuring unemployment
are they live, monthly, quaterly?
what is the natural rate of unemployment
when the labour marker is in equilbrium
what are the 3 types of unemployment
structural unemployment
cyclical unemployment
frictional unemployment
which is the longest type of unemployment
structural unemployment
define structural unemployment
when there is a mismatch between the skills the worker has and the skills the labour force demands
eg previously worked in a dying industry and now has no modern skills, automation of their job
what is cyclical unemployment
short run unemployment during recessions and business cycles
what is frictional unemployment
short run unemployment when people are between jobs
which type of unemployment is the natural rate of unemployment
frictional unemployment
what are the unemployment supports in ireland
jobseekers benefit
jobseekers allowance
what is the jobseekers benefit
not mean tested (just have to have paid PRSI)
short term payment for a maximum duration of 12 months while someone searches for another job
ranges from 150e-300e
what is ther jobseekers allowance
means tested
used when jobseekers benefit has been used up
about 203e a week
what fiscal policy was introduced during the pandemic to help those who lost their job as a result of lockdown
Pandemic Unemployment Payment
what fiscal policy can help people retrain and reskill to allow them to become more employable
back to education allowances,
this is an incentive to use the time unemployed to gain skills
whats the effect of unemployment fincancial supports on frictional unemployment
people can take longer off to find a job that suits them best without income insecurity
whats the effect of unemployment financial supports on structural unemployment
the income may not be sufficient for longer term
causes of structural unemployment
minimum wage laws, trade unions, efficiency wage, skills mismatch
ways to solve/minimize frictional unemployment
advertise job vacancies
training programs
what is a reservation wage
the minimum wage that someone is willing to work for
what is the theory of efficiency wages
firms operate more efficiently if wages are above the equilibrium
why does having higher than equilibrium wages increase efficiency
- better pool of applicants to job
- less turnover
- higher effort and motivation
- improved worker health
some government policies to reduce unemployment
job search assistance
training programs
incentives to private sectors to employ more eg wage subsidies
creating employment in the public sector
how can unemployment be measured
people receiving benefits
why is unemployment never 0
takes time for people to find a suitable job
quantity demanded > quantity supplied
why is frictional unemployment a lot shorter term nowadays
online job applications and job postings makes it easier to find out about job openings
why do firms agree with unions and provide them with what they want
firms want to avoid strikes as they decrease productivity
what is the issue with unions
they only benefit the union members
some people will get raises etc at the expense of others
why do firms not want high worker turnover
it’s costly to hire and train new workers
more experienced workers are more productive
possible individual costs of unemployment
loss of earnings stress, self esteem issues, health problmes drug, alcohol abuse crime family breakdown de skilling
what is de skilling
lose touch with new methods, no longer viewed as favourable candidates in job applicants
possible societal costs of unemployment
opportunity cost
tax and benefits effect
reverse multiplier effect
effect of unemployment on taxes and benefits
people have less income so reduce their consumption,
government spending must be much higher to pay unemployment benefits but also dealing with other effects eg drug abuse
what is a reverse multiplier effect
less spending in the economy can result in more people being made redundant as demand decreases
pros of unemployment benefit
protects workers against income loss
stablise economy during recession
encourages workers to look for good match jobs
cons of unemployment benefit
can be generous, lengthening time spent unemployed
no strong evidence that it helps people find a better job
people may exaggerate job searching activity in order to continue to receive the payments
funded by taxes
unemployment benefits are targetted at which 2 types of employment. Why not the other type
cyclical and frictional
structural requires reforms in the labour market
