Employment and unemployment Flashcards
what is unemployment
number of people who want to work and are actively searching but are unable to find a job
How unemployment measured?
Labour force survey and claimant count (UK gov has dropped using claimant count)
what is labour force survey?
Survey of employment in the UK, those who are able to work and can start within the next 2 weeks
what is Claimant count?
Measures the number of people claiming job seeker’s allowance as they are unemployed
what 2 factors effect the consequence of unemployment
- rate of unemployment
- duration of unemployment
who faces the consequences of unemployment?
- the economy
- businesses
- the unemployed
what consequences are faced for the economy? ( consider PPF )
-there is lost output - a wastage of resources - innefficient allocation of resources
- increased gov.t spending of JSA and unemployment programmes
- lost tax revenue - lower income tax receipts + therefore lower consumption so VAT falls
what consequences are faced my businesses?
- reduced demand for goods/ services
- reduced productivity
- reduced profitability
- less incentive to invest
what are the consequences for the unemployed
- lower standard of living - lower income.
- financial costs - more time spent at home may increase utility bills.
- ’ de-skilling’ - unemployed for a longer period can ‘de-skill’ the person. leads to diminishing human capital over time
what are the 4 types of unemployment?
- cyclical
- seasonal
- frictional
- structural
what is cyclical unemployment?
-linked to the economic cycle, when there is a negative output gap
- demand is low ( demand- deficient unemployment)
what is seasonal unemployment?
- occurs in industries with seasonal demand
- workers in seasonal industries may face unemployment when demand drops during certain time of the year E.g. tourism
-can be reduced by adjusting employment policies or workforce training
what is frictional unemployment?
- occurs when workers are between jobs
-typically short-term, and is as a result of job searches, career changes or delays in hiring - present in every economy, no all jobs are immediately filled
what is structural unemployment
- happens when industries change due to shifts in economy
- some jobs become obsolete ( e.g. decline of certain sectors
-workers may need training or relocation to find employment.
How has globalisation impacted unemployment and employment in the UK?
- many firms in the UK move abroad where there are lower labour costs
- markets such as BRICS and MINT has allowed growth of UK exports- creating more employment
what policies correct unemployment?
Improving occupational immobiity ;
> retraining skills
> improve info
Improve Labour immobility;
> easy to move from one region to another
> reduce housing costs
Reduce employment search period;
> JSA - creates incentive to work
