Theme 2- Employment & Unemployment (key terms)

Question 1

Claimant Count

Answer 1

The number of people claiming benefits for unemployment - the Jobseeker’s Allowance or JSA in the Uk

Question 1

Labour Force Survey (ILO)

Answer 1

• An interview-based survey of about 60,000 households
• Includes all people over 16 and is a better measure than the claimant count

Question 2

Underemployment

Answer 2

Where someone doesn’t have as much work as they would ideally like or working in a job that doesn’t use your skill level

Question 3

Economic inactivity

Answer 3

People who are working age but are NOT currently seeking work for a variety of reasons (childcare, retirement etc) - not part of the workforce

Question 4

Structural unemployment

Answer 4

Unemployment caused by the changing structure of the economy - e.g. when a country like Britain loses jobs in manufacturing

Question 5

Cyclical unemployment

Answer 5

• Unemployment caused by the economic cycle
• When you have a negative output gap, AD is falling, there is spare capacity, so there is not enough demand to create enough jobs

Question 6

Seasonal unemployment

Answer 6

Unemployment at different points in the year - e.g. unemployment rises in a tourist destination during winter months

Question 7

Frictional unemployment

Answer 7

Unemployment caused by people moving between one job and another - isn’t necessarily a problem as people need to move jobs - a sign of a healthy labour market

Question 8

Demand deficient unemployment

Answer 8

Also known as cyclical unemployment, occurs when planned demand is insufficient to generate a full-employment level of real national output, this is most likely to happen in a slowdown or recession

Question 9

Disguised unemployment

Answer 9

Also known as hidden unemployment - part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero

Question 10

Discouraged workers

Answer 10

People who have been unable to find work for a very long time so have stopped looking - they become economically inactive, so they may not show up on unemployment measures

Question 11

Economically active

Answer 11

Those who are unemployed and actively seeking employment

Question 12

Economically inactive

Answer 12

Those who are of working age but are neither in work nor actively seeking work.

Question 13

Full employment

Answer 13

When there enough job vacancies for all the unemployed to take work

Question 14

Natural rate of unemployment

Answer 14

The equilibrium rate of unemployment = frictional + structural unemployment

Question 15

Migration

Answer 15

The movement of people from one geographical location to another with the intention of settling in the new region

Question 16

Tight labour market

Answer 16

When demand for labour is high and there are shortages of labour. Businesses may have to offer higher wages to attract and keep the workers they need

Question 17

Unemployment trap

Answer 17

When the prospect of the loss of unemployment benefits dissuades those without work from taking a new job –creates a disincentives problem

Question 18

NEETs

Answer 18

‘NEET’ stands for young people aged 16-24 Not in Education, Employment or Training (NEET). 788,000 people aged 16-24 in the UK were NEETs in 2019, representing 11.3% of the age group