Macro - Employment & Unemployment✔️

Question 1

The claimant count

Answer 1

This measures the number of people claiming job seekers allowance in the UK. However, the requirements for claiming job seekers allowance are much more extensive than the labour force survey meaning those who fit the ILO definition of unemployed are not always eligible to claim.

Those who are under 18 or have a certain level of saving also cannot claim JSA.

Those who have a partner that is working are not eligible to claim JSA.

Question 2

International Labour Organisation (ILO)

Answer 2

This is a survey given to a random sample of households within the UK. The households then tick a box to determine whether they fit the ILO definition of unemployment (Ready to work within two weeks and have actively looked for work in the past month, but cannot find a job).

Question 3

UK labour force survey

Answer 3

The Labour force survey is a worldwide measurement of unemployment thus making it easier for international comparisons of unemployment to be made. In total the survey goes out to around 60,000 UK households

Question 4

Unemployment

Answer 4

Those who are willing, able and registered to work, but cannot find a job despite searching actively.

Question 5

under-employment

Answer 5

underemployed are currently working, but in a job that they are overqualified for and where their skill set is not being fully utilized.

Question 6

The significance of change in the rate of employment

Answer 6

The number of people in work can often increase whilst the unemployment figure also increases. This is due to increased immigration boosting the number of people that are in the workforce.

Question 7

The significance of change in the rate of unemployment

Answer 7

the number of people not working could rise whilst the employment figure increases. This is due to an increase in the number of people who are economically inactive

Question 8

The significance of change in the rate of inactivity

Answer 8

Those who are 16-64 and are not actively looking for a job are part of a group called the economically inactive. This may be for a number of reasons e.g. long term sickness, a lack of motivation etc.

Question 9

Understand the causes of structural unemployment

Answer 9

unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.

Question 10

Understand the causes of frictional unemployment

Answer 10

the unemployment which exists in any economy due to people being in the process of moving from one job to another.

Question 11

Understand the causes of seasonal unemployment

Answer 11

Seasonal workers without jobs due to the time of year where there are seasonal changes in employment

Question 12

Demand deficiency

Answer 12

refers to a situation wherein aggregate demand in the economy falls short of aggregate supply of goods and services at full employment.

Question 13

Cyclical unemployment

Answer 13

Cyclical unemployment is caused by a decrease in the aggregate demand of an economy (AD1 to AD2). A decrease in AD means that there is a decrease in the demand for goods/services within the economy. As the demand for labour is derived from the demand for goods/services, a decrease in AD causes unemployment to increase.

Question 14

Real wage inflexibility

Answer 14

If unions are strong and powerful, wages are less likely to be flexible and wages

Question 15

What is the significance of migration and skills for employment and unemployment?

Answer 15

big impact on the occupational mobility of labour and therefore the rate of unemployment. A highly occupationally immobile workforce will struggle to find jobs as they do not have relevant skills

Question 16

The effect of unemployment on consumers

Answer 16

The unemployed are also unable to purchase as many goods, so will contribute to lower spending and lower output.

Question 17

The effect of unemployment on firms

Answer 17

When unemployment is high, suppliers will receive fewer orders and may have to reduce prices.

Question 18

The effect of unemployment on workers

Answer 18

being unemployed results in a fall in income, and a loss of living standard

Question 19

The effect of unemployment on government

Answer 19

Increase in welfare payments as well as a reduction in tax revenue.

Question 20

The effect of unemployment on society

Answer 20

High unemployment indicates the economy is operating below full capacity and is inefficient; this will lead to lower output and incomes. The unemployed are also unable to purchase as many goods, so will contribute to lower spending and lower output.