employment

Question 1

unemployment

Answer 1

number of people who are working age who are willing and abke to work actively seeking work but who do not have a job

Question 2

the claimant count

Answer 2

the number of people claiming unemployment related benefits from the government, including people claiming SSA(job seeking allowance)

Question 3

advantages of the claimant count

Answer 3

-easy to conduct
-cheap

Question 4

disadvantages of claimant count

Answer 4

-can be manipulated by government to make it seem smaller (e.g. raising school leaving age to 19)
-excludes people looking for work but those not eligable or chose not to claim benefits

Question 5

labour force survey

Answer 5

asks people who arent working if they are actively seeking work
conducted by ILO

Question 6

advantages of labour force survey

Answer 6

-more accurate
-internationally agreed method

Question 7

disadvantages of labour force survey

Answer 7

-expensive
-can be unrepresentative of the population of a whole

Question 8

Disequilibrium unemployment

Answer 8

type of unemployment that happens when the labour market is in disequilibrium
-cyclical unemployment
-real wage unemployment

Question 9

cyclical unemployment

Answer 9

occurs in a recession due to lack of aggregate demand
-labour is a derived demand for G/S
-lower AD = lower profit, firms unemploy workers to maintain profit margins

Question 10

Real wage unemployment

Answer 10

when wages are forced above the equilibrium in a labour market creating excess supply of labour
could be due to trade unions

Question 11

equilibrium unemployment

Answer 11

type of unemployment that happens when the labour market is in equilibrium (AKA natural rate of unemployment)
-structural unemployment
-frictional unemployment
-seasonal unemployment

Question 12

frictional unemployment

Answer 12

when workers are between jobs

Question 13

seasonal unemployment

Answer 13

jobs that depend on a particular season
e.g. fruit picker/ ski-instructor

Question 14

structural unemployment

Answer 14

due to immobility of labour
can have occupational or geographical immobility

Question 15

occupational immobility/

Answer 15

when their is a mismatch between skills workers have and the job opportunities available

Question 16

geographical immobility

Answer 16

workers are not physically able or willing to move to where job vacancies are
due to personal preference, family ties

Question 17

natural rate of unemployment

Answer 17

-unemployment when the labour market is in equilibrium
-consists of frictional, structural and seasonal unemployment
-can never achieve 0% unemployment
full employment is the natural rate of employment

Question 18

full employment

Answer 18

where everybody of working age who wants to work can find employment at current wage rates
ar full employment the economy is operating at full capacity and will be on the PPF curve

Question 19

government determinants of unemployment

Answer 19

-generous benefits
-excessive labour market regulation

Question 20

interventionist determinants

Answer 20

-lack of transport/ housing infrastructure
-lack of in work training

Question 21

costs of unemployment

Answer 21

-lost output
-deuteriation of gov finances
-social costs
-costs to other countries
-lost income
-hysteresis

Question 22

lost output

Answer 22

when there is unemployment, the economy is operating within its PPF, means you dont get maximum production of G/S
ability of consumers and households to access G/S become harder, their living standards become lower and constrains economic growth

Question 23

deuteriation of gov finances

Answer 23

less tax revenue, less spending means less VAT revenue and less corporation tax revenue
gov spending to cover costs of unemployment

Question 24

social costs

Answer 24

with high unemployment you tend to see more riots and protests
increased spending on healthcare and policing
increased physical/ mental health issues

Question 25

costs to other countries

Answer 25

less demand for their exports, harming their economic growth

Question 26

lost income

Answer 26

increased borrowing/ fall in living standards

Question 27

hysterisis

Answer 27

effect persists after initial causes giving rise to the issue are removed unemployed might lose their skills/ skills become outdated/ become dependent on benefits

Question 28

benefits of unemployment

Answer 28

-greater pool of workers for firms -low inflation -improved current account position -time for workers to find suitable jobs

Question 29

greater pool of workers for firms

Answer 29

flexibility to choose the most productive workers, keep costs of production low, keeping profit margins high

Question 30

low inflation

Answer 30

abudant labour workers dont have huge wage bargaining power that keeps a lid on wage rises, a lid on costs of production and a lid on the increase of G/S prices

Question 31

improved current account position

Answer 31

if a country has a current account deficit, high unemployment should reduce it as high unemployment and low incomes, theres less spendings on imports ceteris parabis improving current account position

Question 32

unemployment, benefits vs costs

Answer 32

unemployment at natural rate is fine and usually benefits > costs past NRU costs usually > benefits

Question 33

unemployment in the long run

Answer 33

long-term unemployment is for a year or more, the risk of hysterisis increases

Question 34

worst type of unemployment

Answer 34

structural - very hard to fix (immobility)

Question 35

distribution of ynemployment

Answer 35

worst group of society to be unemployed is the youth more liable to suffer from long-term unemployment (need experience)