Employment and Unemployment Flashcards
What defines being in employment?
Individuals aged 16 and over who are in paid work, whether as employees or self-employed
What defines being economically inactive?
Individuals not in employment who have not sought work in the past four weeks and/or are not available to start work in the next two weeks
What are discouraged workers?
People who have been unable to find employment and who are no longer looking for work
They are part of those who are economically inactive
What defines economically inactive?
Economically inactive includes all those people of working age who do not have a job and are not looking for a job
Why is full employment a core macroeconomic policy objective?
Having large numbers of people without jobs means that the economy is not making the best use of its labour resources and is sacrificing potential output that could be produced
Why will there always be people unemployment?
Frictional and Seasonal Unemployment
Why is it not desirable to have the economy operating close to full capacity?
If the economy were to be operating very close to full capacity, this would be likely to put upward pressure on wages and thus prices. There would be conflict between achieving full employment and maintaining the stability of prices
What does full employment really mean?
Full employment does not mean that unemployment will be zero but at a higher percentage
How was unemployment measured before?
The measure of employment was the claimant count of unemployment by measuring the number of people registered as unemployed and claiming unemployment benefit (Jobseeker’s Allowance) (JSA)
How does someone claim JSA?
People claiming JSA must declare that they are out of work, available for, and actively seeking work, during the week in which their claim is made
What is a problem for using the claimant count to measure unemployment?
People claiming JSA may include people who are claiming benefit but not actually prepared to work
It also excludes people who would like to work and looking but not eligible for unemployment benefit
What is the current measure of unemployment?
ILO unemployment rate is a measure based on the Labour Force Survey. This identifies the number of people available for work, and seeking work, but without a job.
How does the ILO unemployment rate define an unemployed person?
Without a job, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks
Out of work, have found a job and are waiting to start in the next two weeks
What are the disadvantages of the ILO unemployment data?
They are sample evidence, and extrapolated up to give the picture for the UK as a whole. The samplee cannot be guaranteed to be fully representative
Why is measuring a developing countries unemployment even more difficult?
No social secuirty system means unemployed workers have no incentive to register as being unemployed
People cannot find jobs they are qualified for and take second-choice jobs: this is underemployment
