Unemployement Definitions Flashcards
Unemployment level (2)
The number of people over the age of 16 (1) that are without work, available for work and seeking work (1)
Unemployment rate (2)
The unemployment rate is the proportion or percentage of the economically active who are unemployed (1). It is important to note that economically active are those who are currently engaging in the Labour Market, that is the employed plus the unemployed (1).
Underemployment (2)
This includes those workers that are highly skilled but working in lower paying jobs lower skill jobs (1) and part-time workers that would prefer to be full-time (1).
Claimant count unemployment (3)
The Claimant Count is the number of people who are receiving benefits principally for the reason of being unemployed (1). Since Jobseeker’s Allowance (JSA) was introduced in October 1996, this has consisted of those people claiming JSA or National Insurance (NI) credits (1). From April 2013, those people receiving Universal Credit (UC) principally for the reason of being unemployed also meet the definition of the Claimant Count (1).
ILO unemployment (5)
This is the official measure of unemployment in the UK (1). It is used as survey to ask about respondents’ personal circumstances and their activity in the labour market. (1) The design of the survey means that in any three month period approximately 41,000 households (80,000 people) in the UK will be interviewed (1). To be considered as unemployed, respondents have actively sought work in the last 4 weeks and are available to start work in the next 2 weeks, or have found a job and are waiting to start in the next 2 weeks (2).
Structural unemployment (3)
This is where workers have the wrong skills in the wrong place. It is associated with long-term decline in demand in an industry leading to fewer jobs as demand for labour falls away (1) and occupational and geographic immobility of labour preventing workers finding other jobs straight away (1). For example, unemployment caused by the closure of the Redcar steel works (1).
Frictional unemployment (2)
Frictional unemployment is transitional unemployment due to people moving between jobs (1). For example, redundant workers may take time to find the types of work they want at wage rates they are prepared to accept. Many are unemployed for a short time whilst involved in job search (1).
Seasonal unemployment (4)
Seasonal unemployment occurs when people are unemployed at certain times of the yea (1). This can be because of increased supply of workers in the labour market at certain times of the year such as school leavers in July (1) or because of differences in demand for labour by industries that operate with big seasonal differences such as tourism and leisure, farming, construction and retailing (1). The majority of data for unemployment for the UK is presented as seasonally adjusted so that the impact of regular, predictable seasonal changes in labour demand are adjusted for (1).
Cyclical unemployment - demand deficiency (3)
Cyclical unemployment is involuntary unemployment due to a lack of aggregate demand for goods and services (1). This is also known as Keynesian unemployment (1). When there is a recession or a slowdown in growth, we see a rising unemployment because of plant closures, business failures and an increase in worker lay-offs and redundancies (1).
Job Seekers Allowance (6)
• Jobseekers’ allowance is the name of the UK’s unemployment benefit (1). Since 2013 it is one of six benefits that are being absorbed by the Universal Credit system (1). To be eligible, claimants must be 18 or over but below the State Pension age (1), not be in full-time education (1), be available for work and be actively seeking work (1) and work on average less than 16 hours per week (1)
Unemployment in the economy represents a loss of _____
potential output
The opportunity cost of each unemployed person is their
foregone output (showed on a ppf below the curve)
social issues related to unemployment
economic and social deprivation.
Increased divorce rates, lower life expectancy, worsening health
High unemployment, falling real incomes, worsening inequalities of income and wealth
What is a transfer payment
Each extra person who becomes unemployed stops paying tax and starts receiving benefits - this is not a cost to the economy as increased costs of benefits is considered a transfer payment however does represent a cost to the tax payer.
