Employment and unemployment (MAC) Flashcards

1
Q

What are measures of employment?

A

The level of employment

The employment rate

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2
Q

What is the jobseekers allowance?

A

It is paid to people who are willing and able to work but are not currently in employment

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3
Q

What is unemployment?

A

The unemployment rate is the number of unemployed people as a percentage of the labour force.

The labour force consists of the unemployed plus those in paid or self employment

Unemployment can be measured as a level or as a percentage (number of people out of work / total economically active population x 100)

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4
Q

What is underemployment?

A

Underemployment includes individuals who are seeking or available for additional work.

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5
Q

What is the significance of an increase in the employment rate?

A

Increased GDP

Increased revenues and profits

Increased incomes

Improved skills

Higher government taxation revenue

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6
Q

What is human capital?

A

Refers to the knowledge and skills of a workforce that determine its productivity. Human capital may be improved by education and training.

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7
Q

What is the significance of a decrease in the unemployment rate?

A

Falling in government spending

Increased employment

The job market becoming less flexible

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8
Q

What is the significance of changes in the inactivity rate?

A

If there is an increase in the inactivity rate:

The productive capacity of the country will fall

There may be more claims on state benefits

The dependency ratio will increase

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9
Q

What does economically inactive mean?

A

Refers to people not in education employment and training who are not seeking work within the last 4 weeks and who are unavailable for work within the next 2 weeks

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10
Q

What are the types of unemployment?

A

Cyclical: You expect this type of unemployment in a recession

Structural: Where industries are in decline and workers skills are becoming out of date

Frictional: When people are between jobs

Seasonal: When people are out of work for some periods of the year

Classical or real wage inflexibility: where there are problems with the supply side of labour

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11
Q

What is migration?

A

Refers to immigration and emigration and the overall balance between the two in a country

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12
Q

What is immigration?

A

Is when people enter a country for a long term stay.

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13
Q

What is emigration?

A

Is when people exit a country for a long term stay in another country.

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14
Q

What is the significance of migration for employment and unemployment?

A

If immigrats come into a country to fill vaccines then immigration leads to an increase in employment

If immigrants are looking for work but do not find it or displace other people from work then employment may be unchanged and unemployment might increase

If immigrants come to country to earn money to send home to their families then this will adversely affect the current account of the balance of payments at least in the short run

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15
Q

What are the significance of skills for employment and unemployment?

A

The workforce is more productive

Earnings of highly skilled workers are likely to be higher than those of unskilled workers

Highly skilled workers are less likely to be unemployed and have more stable and secure employment

Inequality and poverty are likely to be lower

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16
Q

What are the effects of unemployment on consumers?

A

Decrease in living standards

Loss of confidence leading to lower consumer spending

Danger of mental illness if unemployed for a long time

May result in lower house prices and a fall in personal wealth

17
Q

What are the effects of unemployment on firms?

A

Easier to recruit new employees

Less consumer spending so firms face falling sales revenues and profits

Firms might be able to hold wages down and therefore their costs

18
Q

What are the effects of unemployment on on workers?

A

Loss of skills

Loss of income

Lower living standards because they have less income so quality of life falls

Long term unemployment may make it more difficult to get a job in the future

19
Q

What are the effects of unemployment on government?

A

Increased spending on welfare benefits

Less revenue from income tax and indirect taxes

Opportunity cost

Inequality may increase