Employment and Unemployment Flashcards
Claimant count
The number of people claiming unemployment-related benefits.
Cyclical unemployment
Unemployment caused by a persistent lack of aggregate demand for goods and services, where national output < potential output leading to a negative output gap.
Demand deficient unemployment
Also known as cyclical unemployment, occurs when planned demand is insufficient to generate a full-employment level of real national output, this is most likely to happen in a slowdown or recession.
Discouraged workers
People often out of work for a long time who give up on job search and who become economically inactive in the labour market. A cause of hidden unemployment.
Disguised unemployment
Also known as hidden unemployment, where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero.
Economically active
Those who are unemployed and actively seeking employment.
Economically inactive
Those who are of working age but are neither in work nor actively seeking work.
Frictional unemployment
Those moving between jobs. Typically lasts for up to six months.
Full employment
When there enough job vacancies for all the unemployed to take work.
Human capital
Human capital is a measure of individuals’ skills, knowledge, abilities, social attributes, personalities and health attributes. These factors enable individuals to work, and therefore produce something of economic value.
Inactivity
The state of not producing an economic output.
International labour organisation (ILO)
The ILO is a United Nations agency whose mandate is to advance social justice and promote decent work by setting international labour standards.
Job search
Process by which workers find appropriate jobs given their tastes and skills.
Labour force survey
The Labour Force Survey (LFS) is a study of the employment circumstances of the UK population. It is the largest household study in the UK and provides the official measures of employment and unemployment.
Labour shortages
When businesses find it difficult to recruit the skilled workers they need.
Labour supply
The number of people able, available and willing to work at prevailing wage rates.
Migration
The movement of people from one geographical location to another with the intention of settling in the new region.
Natural rate of unemployment
The equilibrium rate of unemployment = frictional + structural unemployment.
NEETs
‘NEET’ stands for young people aged 16-24 Not in Education, Employment or Training (NEET). 788,000 people aged 16-24 in the UK were NEETs in 2019, representing 11.3% of the age group.
Net inward migration
When the number of migrants coming into a country is higher than those leaving in a given time period – usually a year.
Real wage
Nominal wage adjusted for the effects of inflation.
Redundancy
Making someone redundant is to end their paid employment.
Seasonal unemployment
This occurs when people are unemployed at particular times of the year when demand for labour is lower than usual.
Structural unemployment
Unemployment that results from the decline in an industry which leaves people unemployed because they do not have the skills needed by industries that are growing.
Tight labour market
When demand for labour is high and there are shortages of labour. Businesses may have to offer higher wages to attract and keep the workers they need.
Under-employment
Workers are underemployed when they are willing to supply more hours of work than their employers are prepared to offer.
Unemployment rate
The unemployment rate is the proportion of the economically active population who are unemployed.
Unemployment trap
When the prospect of the loss of unemployment benefits dissuades those without work from taking a new job – creates a disincentives problem.
Unit wage costs
Labour costs per unit of output.
Zero hour contracts
An employment contract under which the employee is not guaranteed work and is paid only for work carried out.
