Unemployment

Question 1

What is the labour force

Answer 1

15 years of age and working/actively seeking work

work = 1hr per week

Question 2

What is participation rate

Answer 2

Percentage of population in labour force unemployed or employed
%participation= labour force/working age population x 100

Question 3

Define unemployment

Answer 3

Individuals who wish to work but unable to find a job

Question 4

What are some problems with how unemployment is measured (3)

Answer 4

Underemployment - hours worked
Hidden unemployment - discouraged jobseekers sick of looking for work
Labour force underutilisation rate - people unemployed + people who want more hours

Question 5

What are the main types of unemployment (8)

Answer 5

Structural unemployment - Caused by structural changes in an economy e.g. coal mining
Cyclical unemployment - occurs when a downturn happens in the economy, fixed by growing economy
(the rest are less important)
Frictional unemployment
Seasonal unemployment
Hidden unemployment
Underemployment
Long term unemployment
Hard core unemployed

Question 6

What are the main causes of unemployment (10)

Answer 6

Level of economic growth 
State of macroeconomic policies
Constraints on economic growth
Rising participation rates
Structural change
Technological change 
Productivity
Inadequate levels of training and investment
Increased labour cost
Inflexibility in labour market

Question 7

How is labour force calculated

Answer 7

Amount of people who are employed and also people seeking work

Question 8

How is unemployment rate calculated (%)

Answer 8

(Number of unemployed/Total labour force) x 100

Question 9

How is participation rate calculated (%)

Answer 9

(Labour force/working age population) x 100