T2: LS9 - Employment & Balance Of Payments

Question 1

Define Employment

Answer 1

Employment: refers to individuals aged 16 or over who are in paid work which can be as employees or self-employed

Question 2

Define unemployment

Answer 2

Unemployment refers to individuals aged between 16-64, who or without a job, want a job, have actively sought work in the last four weeks, are available to start in the next two weeks

Question 3

Claimant count definitions

Answer 3

• those who are claiming work related benefits like the JSA
  Requirements:
• out of work, capable of work, Ava liable for work and actively seeking work in that week

Question 4

ILO unemployment defintion

Answer 4

(International labour organisation)
- without a job
- want a job
- actively sought work in the last 4 weeks
- available to start work in the next two weeks
- or waiting to start in the next 2 weeks

Question 5

Underemployment definition

Answer 5

• workers are in jobs below their skill level
• working less hours than they can and want to work

Question 6

Employment rate equation and defintion

Answer 6

• measures the proportion of working-age population (16-64) who are in employment where rising employment rates represent economic growth.
• number of employed individuals of a working age/ total labour force (working age-population) * 100

Question 7

Unemployment rate defintion and equation

Answer 7

• measures the proportion of the labour force actively seeking work and unemployed. High unemployment —> low GDP growth
  Unemployed/ labour force(working-age population) * 100

Question 8

Inactivity rate definition and equation

Answer 8

• measures the proportion of the working-age population that is not in the labour force.

Question 9

Participation rate (activity rate definiton)

Answer 9

Number of those in work or unemployed/ working age population

Labour force/ working age population *100

Question 10

Frictional unemployment definiton

Answer 10

• short term unemployment occurring when individuals are looking for new professions/ new jobs

Question 11

Structural unemployment definition

Answer 11

Structural unemployment: occurs from a mismatch between workers’ skills and job requirements.
- occurs from technology changes/ shifts in the economy/ firms

Question 12

Cyclical/ demand-deficient uenmployment

Answer 12

Occurs when demand for labour fluctuates due to changes in the health of an economy between booms, downturns and recessions.

Question 13

Seasonal unemployment definition

Answer 13

Occurs when demand for labour changes depending on seasonal job opportunities (e.g. tourism)

Question 14

Real wage inflexibility definition

Answer 14

When wages are too high leading to firms reducing job opportunities available and reducing their workers to reduce costs
- Also occurs as firms are unwilling to hire workers.

Question 15

What are the demand-side policies to reduce unemployment?

Answer 15

• Fiscal policy
• Monetary policy

Question 16

What are the supply-side policies to reform unemployment issues?

Answer 16

• Education and Training of workers
• Labour market reforms