Employment & Unemplyoment (Precise) Flashcards
Explain what ‘frictional unemployment’ is
People who are between jobs and are looking for work. It occurs when people’s preferences or tastes change and thus alters demand for products, with knock on effects and a reduced demand for labour. It is usually short term as workers need time to find new employment.
Explain what ‘seasonal unemployment’ is
Occurs when some members of the workforce are in employment for only a certain part of the year. Example: a student picking strawberries in the summer.
Explain what ‘cyclical unemployment’ is (R+A)
Results from the reduced demand for goods and services during an economic recession. It arises due to fluctuations in the business cycle. In theory, those who lose their jobs in the downturn should be rehired in the recovery phase of the cycle.
Explain what ‘institutional unemployment’ is
Obstacles preventing the mobility of labour. Example: lack of housing or a refusal to grant a work permit.
Explain why an economic recession is a cause of unemployment
An economic recession results in a reduction in aggregate demand. Businesses will need to reduce their costs. This may lead to reduced hours, jobs losses or even shutdown.
Explain why relocation of industry is a cause of unemployment
Businesses may want or need to reduce their costs and hence move to lower cost locations.
Explain why uncertainty is a cause of unemployment
With a downturn in economic activity people may be fearful for the future. People may reduce or defer their spending. This reduced demand results in jobs losses.
Explain why a systemic crisis is a cause of unemployment
A systemic crisis is a crisis that threatens the entire countries economic system. The banking crisis in 2008 led to a huge decline in consumer confidence, so they curtailed their spending. Therefore companies had lower sales, which led to lower employment numbers.
why is a decrease in consumer demand an impact of unemployment
Unemployment results in a fall in income. People have less money to spend on goods and services.
why is an increase of government current expenditure on social welfare an impact of unemployment
When people become unemployed, they need social welfare until they find their next job.
why is a rise in social problems an impact of unemployment
As unemployment increases, crime levels may increase.
why is a decrease in demand for imports an impact of unemployment
As the number of unemployed increases, the demand for imported goods and services may decrease.
Explain how sustaining a low rate of corporation tax could be a strategy for reducing unemployment in Ireland?
Our corporation tax stands at 12.5%, which is one of the lowest in the EU, and could attract firms to come to Ireland and create jobs.
Explain how encouraging new investment opportunities could reduce unemployment in Ireland?
Creating an environment where grants are given in innovation empowers Irish companies to lead the way in research & development (R&D)
Explain how investing in education and training could reduce unemployment in Ireland
As people become more educated and specialised, they can make and sell more innovative products as well as offer better results to potential employers.
