Employment And Unemployment Flashcards
LFS:
- labour force survey, massive survey of 40k households to calculate employed, unemployed, economically inactive
Unemployment rate = (unemployed/ economically active) x 100
Cons of LFS
- sampling errors - only 40k households
- cost of it
- hidden unemployed
- inactive groups
- underemployed being listed as fully employed
Claimant count:
Total number of people claiming unemployment benefots
Cons of CC
- difficult to compare across countries
- not everyone unemployed will claim these
- not everyone can claim
- could be subject to fraud
Types of unemployment
Cyclical - demand deficient
Structural - occupational/ geographical immobility
Seasonal
Frictional
Casual
Real wage
Cyclical (demand deficient) unemployment
less demand in economy, so lower derived demand for workers - higher cyclical unemployment
Structural unemployment
due to either occupational or geographical immobility of labour, so skill shortages or physical movement issues respectively
Frictional unemployment
when workers are between jobs, soo when searching - fractionally unemployed
Seasonally unemployed
unemployed as their particular industry is seasonal - ice cream bruddas
Casual unemployment
Contractual workers like builders
Real wage unemployment
Minimum wage in the market means excess of supply
Costs of unemployment to economy
- Lost output - growth potential, not working on PPF
- More welfare spending for government - opp cost
- Less tax revenue
- Hysteresis - long term unemployment
- Both AD and AS impacts
- Social costs - lower living standards
Benefits of unemployment to economy
- Firms have greater pool of workers - lower wages + higher quality
- Workers have time to search for best jobs
Evaluation of impacts of unemployment
- type + duration of unemployment
- severity of unemployment
- level of unemployment benefits
