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A-level Economics- Theme 2 > Employment & Unemployment > Flashcards

Employment & Unemployment Flashcards

1
Q

Define employment level

A

Employment level- no. of people in work

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2
Q

Define employment rate

A

Employment rate- proportion of people working relative to the size of the workforce

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3
Q

Define workforce

A

Workforce- people of working age, willing & able to work … employed & unemployed

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4
Q

What are the 2 ways of measuring unemployment?

A

1) The claimant count

2) U.K. Labour force survey

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5
Q

What is the claimant count?

A

The claimant count- record’s no. of people claiming Jobseeker’s Allowance (JSA) or other benefits

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6
Q

What are the evaluation points for the claimant count?

A

👍- quick & cheap to obtain data
👎- ✖️ present full picture of unemployment- if unable to work or working in voluntary capacity for ⬆️ than 16 hours a week then ✖️ claim
ALSO- stigma attached to claiming benefits … ✖️ all eligible claim & some non-eligible (unemployed BUT ✖️ apply for JSA)

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7
Q

What is the U.K. labour force survey?

A

U.K. Labour Force Survey- measures ppl out of work in last 4 weeks & ready to start in next 2 weeks

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8
Q

Who is the labour survey used by?

A

Used by ILO (international labour organisation) & official measure in 🇬🇧 & EU countries

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9
Q

What does the labour force survey involve?

A

Involves face to face interview & then 📞 survey every quarter of 80,000 🏠holds- ask Q about members of 🏠hold out of work for 4 weeks & ready to start in 2

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10
Q

What are the evaluation points for the labour force survey?

A

👍- ⬆️ inclusive than claimant count as applies to anyone aged ⬆️ 16
👎- survey data 6 weeks out of date by publish time

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11
Q

What is underemployment?

A

Underemployment- worker employed BUT wants to work ⬆️ hours e.g. for ⬆️ 💵

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12
Q

What is unemployment?

A

Unemployment- someone willing & available to work BUT ✖️ employed

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13
Q

When has underemployment been prominent in real life?

A

⬆️ significantly after 2008 recession BUT unemployment figures misleading as shown to ⬇️- in reality job market experienced significant downfall as underemployment ⬆️

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14
Q

What factors effect employment?

A

1) School 🏫 /compulsory training leaving age (18)
2) No. of school 🏫 leavers entering higher/further 📚
3) Net migration- difference between immigration (into country) & emigration (out of country)
4) Taxes & Benefits
5) Availability of jobs

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15
Q

How does students choosing to go through higher education 📚 effect the job market?

A

👎 short term as initially workforce smaller- those in education 📚/training ✖️ economically active
👍 long term- 🏫 leavers ⬆️ employable- ⬆️ education & skills

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16
Q

How many students enter higher/further education and could this figure change in the future?

A
  • ⬆️ 40% of 👨‍🎓👩‍🎓 continue with 📚 after 18 in 🇬🇧

- BUT likely to ⬇️ due to ⬆️ university fees (£9000 a year)

17
Q

How does net migration (difference between immigration (into country) & emigration (out of country)) effect employment?

A
  • ⬆️ both employment & unemployment

- 37% come to 🇬🇧 for 📚 & 34% for work

18
Q

How do taxes & benefits affect employment?

A
  • ⬆️ taxes on income discourage/disincentivise ppl to work

- ⬆️ benefits discourage/disincentivise ppl to work

19
Q

How does the availability of jobs affect employment?

A

⬆️ employment if ⬆️ jobs available

20
Q

What is inactivity?

A

Ppl of working age BUT unwilling/unable to work

21
Q

What is a problem with inactivity figures?

A

Makes unemployment 👀 ⬇️ than reality because 👩‍🎓 👨‍🎓 👀 for work while studying, 👩 👀 for job to cover cost of 👶 care etc- ✖️ feature on unemployment figures- marked as inactive

22
Q

Which groups of people are classed as inactive?

A

Includes:

  • 👩‍🎓 👨‍🎓in full time further 📚
  • Those looking after 👶 or other dependants
  • Those with health issues
23
Q

What is the classical view on the cause of unemployment?

A

Classical View:

  • Unemployed because ppl unable OR ✖️ willing to work at going wage rate
  • … unemployment solved if ppl accept ⬇️ wages- laissez fairs best approach- let market solve unemployment
  • ⬇️ wages = ⬇️ cost for firms … firms prices can ⬇️ & profit margin maintained
  • Real wage unemployment- wage kept artificially above market-clearing wage- … workers ✖️ accept lower wage & … ✖️ work due to ⬇️ wage BUT ✖️ realise that firm prices will ALSO ⬇️
  • Believe out of work benefits ⬇️, trade unions ⬇️ & NO minimum wage-> unemployed forced to work
24
Q

What is the Keynesian view on the cause of unemployment?

A

Keynesian View:

  • Demand-deficient unemployment (cyclical unemployment)- caused by lack of AD e.g. recession
  • ALSO ⬇️ spending & ⬆️ saving-> ⬇️ job opportunities as ⬇️ AD … firms employ ⬇️
  • AND ⬇️ jobs = ⬇️ spending … VICIOUS CIRCLE ⭕️ continues
  • Keynesian believe ⬇️ wages ✖️ = ⬆️ employment (classical view) as ⬇️ wages -> ⬇️ spending … ⬇️ ppl needed in employment by firms
25
Q

What are the causes of demand deficient unemployment?

A

1) ⬆️ saving- SEE ABOVE
2) Lack of business confidence
3) ⬆️ value of currency- imports ⬇️ expensive … ⬆️ & exports ⬆️ expensive … ⬇️-> AD ⬇️
4) Slow productivity growth compared to their countries
5) External shocks e.g. ⬆️ oil⛽️ price-> ⬇️ spending as demand price inelastic (necessity) for⛽️

26
Q

What are other causes/types of unemployment?

A

1) Structural unemployment
2) Frictional unemployment
3) Seasonal unemployment

27
Q

What is structural unemployment?

A

Structural unemployment- workers ⬇️ jobs in declining industry as ✖️ have skills to join other industries

28
Q

What is frictional unemployment?

A

Frictional unemployment- workers between jobs- moving jobs

29
Q

What is seasonal unemployment?

A

Seasonal unemployment- workers who only have jobs- certain times of the year e.g. 🏄‍♂‍ 🌊 & 🎿 ❄️instructor

30
Q

Define immigration

A

Immigration- ppl moving into country

31
Q

Define emigration

A

Emigration- ppl moving out of country

32
Q

Define net migration

A

Net migration- immigration ➖ emigration

33
Q

What can immigration lead to?

A

1) ⬆️ employment if job vacancies filled
2) ⬆️ unemployment or ✖️ change if other ppl displaced from work or work ✖️ found
3) ⬆️ skilled workers are ⬆️ flexible if change in labour market requirements- ✖️ stay unemployed for long & move between jobs despite shocks- demand for these workers only fulfilled by them (rare skills)

34
Q

What are the costs of unemployment on consumers?

A

⬇️ incomes & living standards ⬇️

⬇️ morale when out of work- repercussions for family members

35
Q

What are the costs of unemployment on producers/firms?

A

⬇️ spending means firms ⬇️ lower prices & … make ⬇️ profit
BUT may mean ppl ⬆️ willing to stay in jobs as fear of unemployment- may work harder

36
Q

What are the costs of unemployment on workers?

A

Workers skills might become out of date due to changes in work after unemployment

37
Q

What are the costs of unemployment on government?

A

⬆️ unemployment means government pays ⬆️ jobseeker benefits & receive ⬇️ tax

38
Q

What are the costs of unemployment on society?

A

Unemployed resources = opportunity cost- economy could produce ⬆️ without anything given up-> better standards of living
Potential ⬆️ crime 🔪

A-level Economics- Theme 2 (15 decks)

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