Employment And Unemployment Flashcards
Who is unemployed
Those people able, available and willing to work at the going wage but cannot find a job despite an active search for work
What does unemployment mean
That scarce Human Resources are not being used to produce goods and services to meet people’s needs and wants
What is the claimant count
The number of people officially claiming unemployment-related benefits - must be actively seeking work
What is the labour force survey
All those actively seeking and available for work, whether or not they are claiming benefits
When is someone defined to be long term unemployed
Unemployed for at least one year
What is the labour force
The number of people of working age who are able, available and willing to work
What is full employment
When there is amount unfilled job vacancies for all the unemployed to take work
Key term: discouraged workers
People out of work for a long time who may give up on job search and effectively leave the labour market
Key term: economically inactive
Those who are out of working age but are neither in work nor actively seeking paid work
Key term: employment rate
The % of the population of working age in full-time or part-time paid work
Key term: unemployment rate
% of the economically active population who are unemployed
Who are economically active people
Those in work plus those seeking and available to work
When does under-employment occur
When people are counted as looking for an additional job or actively searching for a new job with longer hours to replace their current job
What is frictional unemployment
Unemployment as people move between jobs
What makes frictional unemployment worse
Imperfect information - if people are unaware of available jobs
What can cause frictional unemployment
Incentives problems - some people may stay out of work if they believe the tax and benefit systems leaves them little or no better off from taking a job
What is the unemployment trap
When there are disincentives for people to accept work
When does structural unemployment occur
When there is a long term decline in demand in an industry leading to fewer jobs as demand for labour falls away
Underlying causes of structural unemployment
- decline of manufacturing
- occupational and geographical mobility
- robotics replacing jobs
What is cyclical unemployment
Involuntary unemployment due to a lack of demand for goods and services
What is cyclical unemployment also known as
Keynesian unemployment or demand-deficient unemployment
When is cyclical unemployment most likely to occur
When there is a negative output gap
What is technological unemployment
Keynes - the way in which productivity-enhancing innovation displaces workers and creates periods of higher unemployment
What countries have the highest rates of adult unemployment in the EU
Greece and Spain
Effects of unemployment
- loss of income
- risk of deflation
- negative multiplier effects
- fiscal costs
- social costs including growing poverty
- outward migration
How can unemployment create a risk of deflation
Unemployment = lower level of AD (high levels of spare capacity)
How can unemployment create fiscal costs
The government loses out because of a fall in tax revenues and higher spending on welfare payments for families with people out of work.
= budget deficit
What do the economic and social costs of unemployment depend on
- how many people are out of work and how productive they might have been
- the length of time they remain jobless
What are some of the main causes of high youth unemployment
- skills gap
- reluctant employers
- falling retirement rates
- weak macro fundamentals
