Employment and unemployment Flashcards
What are the main measures of unemployment in the UK?
The UK primarily uses the Claimant Count (which measures those claiming Jobseeker’s Allowance) and the Labour Force Survey (LFS), which defines unemployed individuals as those without work but actively seeking employment.
What is the difference between voluntary and involuntary unemployment?
Voluntary unemployment occurs when individuals choose not to work at the current wage rates, while involuntary unemployment happens when people are willing to work at the current wage rate but cannot find jobs.
What are the four main types of unemployment?
Seasonal Unemployment - Occurs due to seasonal work patterns
Frictional Unemployment - Results from the time taken to find new employment
Structural Unemployment - Caused by changes in the economy, like technological shifts or sector decline
Cyclical Unemployment - Arises during economic downturns when demand for goods and services falls.
How do demand-side and supply-side factors affect employment and unemployment?
Demand-side factors include consumer demand and business investment, which affect job availability. Supply-side factors include labour market flexibility, skills, and government policies that influence workers’ ability and willingness to work.
What is real wage unemployment, and what factors determine it?
Real wage unemployment occurs when wages are above the equilibrium level, leading to excess labour supply. Factors include minimum wage laws, trade union activity, and labour market rigidity, which can keep wages high and reduce demand for labour.
What is the natural rate of unemployment, and what determines it?
The natural rate of unemployment is the lowest level of unemployment achievable without causing inflation, including frictional and structural unemployment. Determinants include labour market flexibility, skill levels, and job-search efficiency.
What are the consequences of unemployment for individuals?
Unemployment can lead to financial hardship, reduced standard of living, mental health issues, and skill loss for individuals, potentially lowering future employability and earning potential.
How does unemployment affect the economy as a whole?
High unemployment reduces overall demand, lowers GDP, and leads to higher welfare costs for the government. It can also result in a loss of skills and productivity in the labour force, affecting long-term economic growth.
