Labour Market

Question 1

working population

Answer 1

people between the age of 16 and 64

Question 2

dependency ratio

Answer 2

ratio of those ages 15 or below and 65 and above of the working population

Question 3

economically active

Answer 3

active in the labour force, including employed, self employed and unemployed

Question 4

workforce

Answer 4

those economically active, either employed or unemployed

Question 5

participation rate

Answer 5

the percentage of the population in a given age group who are economically active

Question 6

replacement ratio

Answer 6

the ratio of unemployment benefits to the wage that a claimant could receive in employment

Question 7

evaluate the maximum wage

Answer 7

not legally enforced- downward pressure on bankers’ bonuses and the pay of chief executives from customers ad shareholders

Question 8

evaluate the minimum wage

Answer 8

depends on productivity and inflation

Question 9

evaluate the living wage

Answer 9

depends on firms’ objective- are they operating under corporate social responsibilities
depends on costs of living- improvements in tech can lower this
depends on location

Question 10

demographics

Answer 10

characteristics of a population- birth rate, life expectancy, average age etc.

Question 11

analyse informal labour markets (shadow markets- babysitting)

Answer 11

the existence of these, shows that if workers were rational, the benefits of working informally outweigh the potential cost of fines- suggesting that gov intervention is insufficient- gov failure

Question 12

labour market flexibility

Answer 12

speed of a labour market reacting to change in demand for workers depends on the length of time taken, the substitutability of labour, number of unemployed and whether migration can meet demand

Question 13

what does Kuznets graph look like

Answer 13

laffer curve-
however shows that as society moves from agriculture to industry, inequality rises
x axis- incomes
y axis- rising inequality