Emplyment And Unemployment

Question 1

What are the two measures of unemployment

Answer 1

The claimant count

International labour organisation (ILO)

Question 2

What is the criteria for the claimant count

Answer 2

• out of work
• available for work
• actively seeking work

Question 3

Who can sign on for benefits with the claimant count

Answer 3

Aged 18-65 if unemployed and fulfil criteria

Question 4

What are the benefits of the claimant count

Answer 4

• easy to calculate and quick
• easy to see trends
• can help the government makes informed decisions (invest in apprenticeships)

Question 5

What are the weaknesses of the claimant count

Answer 5

• rest if EU doesn’t use it
• misses out people who are retired/students etc.
• misses people who are ashamed to claim benefits

Question 6

What survey is taken by the ILO

Answer 6

Labour Force Survey

Official measure used in the UK

Question 7

What does the survey entail? (ILO)

Answer 7

A face to face interview followed by a telephone survey of 60,000 households with over 100,000 adults

Questions related to anyone over 16

Question 8

What does the survey cover? (ILO)

Answer 8

• Household size
• Accommodation details
• Basic demographic characteristics: age, sex, marital status and ethnic origin
• Economic activity

Question 9

What classes you as unemployed in the Labour Force Survey?

Answer 9

• without a paid job
• available to start a new job in a fortnight
• looked for work in previous 4 weeks

Question 10

What is a weakness of the survey?

Answer 10

The survey data is 6 weeks out of date by the time that is has been published

Question 11

What is the claimant count?.

Answer 11

A measure of unemployment which records the number of people who are claimed Jobseeker’s Allowance (JSA)

Question 12

What is the difference between unemployment and under employment?

Answer 12

Unemployment is a situation where someone who is seeking a job can’t find a job where as under employment is where someone is working but maybe not to their full capacity

Question 13

What does inactivity mean in terms of employment?

Answer 13

Those who are not in work and don’t satisfy all criteria for the ILO unemployment e.g. those in retirement and those not seeking work

Question 14

What are the four causes of unemployment?

Answer 14

• structural unemployment
• frictional unemployment
• seasonal unemployment
• demand deficiency and cyclical unemployment
• real wage inflexibility

Question 15

What is structural unemployment?

Answer 15

When the person hasn’t got the skills required

E.g. A doctor trying to do a teachers job

Question 16

What is frictional unemployment?

Answer 16

People who move from one job to another fairly quickly

People willing to change jobs to improve their prospects

Question 17

What is seasonal unemployment?

Answer 17

Demand for labour varying over the year

E,g, travel agents only doing beach holidays = unemployment rises during winter and lowers during summer

Question 18

What is demand deficiency and cyclical unemployment?

Answer 18

When there is insufficient demand in the economy for all workers who wish to work at current wage rates to obtain a job

Question 19

What is real wage inflexibility in terms of employment.,

Answer 19

Wages can’t drop due to minimum wage so firms can’t afford to pay workers so some are made unemployed as they can’t work for below minimum wage

Question 20

What is the classical view of migrants and employment?

Answer 20

Immigration causes unemployment

Question 21

What impact does immigration have on unemployment?

Answer 21

• number of jobs increases when net migration increases - migrants earn wages of which are spent, flowing round the circular flow of income creating jobs
• migrants are more flexible than domestic workforce and take jobs in industries where there are shortages
• often underemployed, take jobs beneath their skill set as they need to earn money quickly

Question 22

What are the effects of unemployment on consumers?

Answer 22

People have lower incomes and living standards fall

Question 23

What are the effects of unemployment on firms?

Answer 23

People spend less, will have to lower prices, make less profit

Question 24

What are the effects of unemployment on the government?

Answer 24

The government has to pay more in Jobseeker’s benefits and receive less taxes