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Economics > Education and Unemployment > Flashcards

Education and Unemployment Flashcards

1
Q

3 types of jobs (3 education levels for work)

A

professional
clerical
skills + manual

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2
Q

where can skills for work be learned

A

formally through education

on the job

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3
Q

why is it difficult for every country to be high skilled

A

poverty traps (positive assortative matching in production)

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4
Q

as an alternative to technology as a key element of the production function, what can be used instead

A

education

education levels can lead to improvements in technology and innovation anyways so a highly skilled workforce is more efficient

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5
Q

how does the poverty cycle affect education

A

more incentive to invest in education when those around you have also and are in high skilled jobs

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6
Q

why are the benefits of education hard to define

A

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

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7
Q

what is innate ability

A

pre existing qualities that allow someone to succeed in life

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8
Q

what are some examples of selection effects

A

socio economic status

parental support etc

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9
Q

ways of improving education access in developing countries

A 
free text books
school meals
improved parental involvement
improved school governance
free uniforms
scholarships
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10
Q

globally, what is the return of a university degree, what does this mean

A

10%

for each degree you have, your possible income increases by 10%

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11
Q

why is education subsidised

A

upfront costs are hard to get loans for
dont want people in debt
therer are societal benefits of education

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12
Q

what is the argument for fairness in subsidised education

A

why should people who dont go to college pay for those who do

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13
Q

what is the argument for competitiveness in education

A

the people who dont go can still benefit as there will be a smarter electorate, more foreign direct investment and great social benefit

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14
Q

4 options for 3rd level fees

A
  1. Fees for none (completely subsidised)
  2. Fees for some (means tested)
    3, Fees for all with cheap credit loans
  3. Fees for all with no debt
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15
Q

benefits of no college fees

A

no barriers to entry

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16
Q

disadvantages of no college fees

A

underfunded resources

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17
Q

what are the disadvantages of means tested fees

A

difficult to do fairly eg edge case

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18
Q

what are the benefits of means tested fees

A

progressive

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19
Q

how has the government got equities in education

A

they have a share in the profit but no returns if there are losses

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20
Q

what is the risk associated with the government having equities in education

A

uncertainty that people may not be able to pay back their debt, or may not get great returns from the education

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21
Q

who is the labour force made up of

A

everyone who is unemployed or employed (ie able to work)~

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22
Q

should unemployment be measured against the labour force or the population
why

A

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

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23
Q

what is the participation rate

A

how many people in the population are in the labour force

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24
Q

what are 3 issues around measuring unemployment

A

including/excluding discouraged workers

timeline of updates

people who are only working part time because they cannot find full time jobs

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25
Q

who are discouraged workers

A

people who are no longer actively looking for jobs because they feel they cant find one

26
Q

what is the problem with the timeline of updates when measuring unemployment

A

are they live, monthly, quaterly?

27
Q

what is the natural rate of unemployment

A

when the labour marker is in equilbrium

28
Q

what are the 3 types of unemployment

A

structural unemployment
cyclical unemployment
frictional unemployment

29
Q

which is the longest type of unemployment

A

structural unemployment

30
Q

define structural unemployment

A

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

31
Q

what is cyclical unemployment

A

short run unemployment during recessions and business cycles

32
Q

what is frictional unemployment

A

short run unemployment when people are between jobs

33
Q

which type of unemployment is the natural rate of unemployment

A

frictional unemployment

34
Q

what are the unemployment supports in ireland

A

jobseekers benefit

jobseekers allowance

35
Q

what is the jobseekers benefit

A

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

36
Q

what is ther jobseekers allowance

A

means tested

used when jobseekers benefit has been used up

about 203e a week

37
Q

what fiscal policy was introduced during the pandemic to help those who lost their job as a result of lockdown

A

Pandemic Unemployment Payment

38
Q

what fiscal policy can help people retrain and reskill to allow them to become more employable

A

back to education allowances,

this is an incentive to use the time unemployed to gain skills

39
Q

whats the effect of unemployment fincancial supports on frictional unemployment

A

people can take longer off to find a job that suits them best without income insecurity

40
Q

whats the effect of unemployment financial supports on structural unemployment

A

the income may not be sufficient for longer term

41
Q

causes of structural unemployment

A

minimum wage laws, trade unions, efficiency wage, skills mismatch

42
Q

ways to solve/minimize frictional unemployment

A

advertise job vacancies

training programs

43
Q

what is a reservation wage

A

the minimum wage that someone is willing to work for

44
Q

what is the theory of efficiency wages

A

firms operate more efficiently if wages are above the equilibrium

45
Q

why does having higher than equilibrium wages increase efficiency

A
  1. better pool of applicants to job
  2. less turnover
  3. higher effort and motivation
  4. improved worker health
46
Q

some government policies to reduce unemployment

A

job search assistance
training programs
incentives to private sectors to employ more eg wage subsidies
creating employment in the public sector

47
Q

how can unemployment be measured

A

people receiving benefits

48
Q

why is unemployment never 0

A

takes time for people to find a suitable job

quantity demanded > quantity supplied

49
Q

why is frictional unemployment a lot shorter term nowadays

A

online job applications and job postings makes it easier to find out about job openings

50
Q

why do firms agree with unions and provide them with what they want

A

firms want to avoid strikes as they decrease productivity

51
Q

what is the issue with unions

A

they only benefit the union members

some people will get raises etc at the expense of others

52
Q

why do firms not want high worker turnover

A

it’s costly to hire and train new workers

more experienced workers are more productive

53
Q

possible individual costs of unemployment

A 
loss of earnings
stress, self esteem issues, health problmes
drug, alcohol abuse
crime
family breakdown
de skilling
54
Q

what is de skilling

A

lose touch with new methods, no longer viewed as favourable candidates in job applicants

55
Q

possible societal costs of unemployment

A

opportunity cost
tax and benefits effect
reverse multiplier effect

56
Q

effect of unemployment on taxes and benefits

A

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

57
Q

what is a reverse multiplier effect

A

less spending in the economy can result in more people being made redundant as demand decreases

58
Q

pros of unemployment benefit

A

protects workers against income loss
stablise economy during recession
encourages workers to look for good match jobs

59
Q

cons of unemployment benefit

A

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

60
Q

unemployment benefits are targetted at which 2 types of employment. Why not the other type

A

cyclical and frictional

structural requires reforms in the labour market

Economics (25 decks)

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