Topic 3 - Employment Flashcards
What is unemployment
Those who can work but dont
How can unemploymnet be reduced
Via demand or supply side policies
What are some supply side policies to reduce unemployment(5)
Better education and training Geographical/Mobiility subsidise Remove labour market regulations Employment subsidse Lower min wage
What are some demand side policies to reduce unemployment(4)
Monetary - cutting interest rates
Fiscal - Cutting tax and higher gov spending
Depriciation in the value of the exchange rate
Decrease avilability of creidt
What are the types of employment(4)
Frictional
Structural
Cyclical
Voulantary
What is frictional unemployment
Where people are in between jobs
in the short run
What can be done to reduce frictional unemployment?
Reduce benefits
Better matching of labour with vacant positions
What is structual UE
Long term frictional
Where workers lose skills over time
Where technology makes less need for workers
Factor immobility
What is voulantary UE
Where jobs are available yet people choose not to take them
Does frictional UE come under voulantary
Yes
Why may people be voulantarily UE
Generous benifits
What is cyclical UE
Where changes in demand means less supply is needed, therefore less workers are needed
What is the natural rate of unemployment
Where the labour market is at equilibrium, yet there is still unemployment (frictional and stuctural)
Is the natural rate of unemployment caused by supplu or demand side factors?
More supply side factors
What are some things that determine the Natural rate of Unemployment(6)
Availability of job info Level of benifits Level of skills and education Degree of labour mobility Flexibility of the labour market Hysterieis
What is hysteresis
Where a recession occurs, causing the unemployed to become demotivated to get a job and causing peopel to lose skills etc
What is the real wage rate unemployment theory
Higher wage rates, causing more people to want to work, increasing the supply of labour - meaning more unemployed
Why may real wage rates increase
Due to higher inflation
Changes in that industry
explain NROUE graph
is the difference between thsoe willing and able to work and are workign and those who are willlign to work and abel to btu are nto working
