Unemployment Flashcards
Define unemployment
This is when someone is out of work, but actively seeking work
How do you calculate the unemployment rate?
Unemployed/labour force
What is the labour force
The labour force is the amount of people who are both employed and unemployed. Groups like under 18s and pensioners will not be counted
What is structural unemployment?
If you have skills that aren’t relevant to current vacancies you are structurally unemployed. The unemployed lack the skills to take up the available vacancies
What is cyclical unemployment?
In a recession, unemployment is usually higher. In a recession there’s lower demand for goods. As labour is a derived demand for consumer demand, this will lead to less demand for labour aswell
What is frictional unemployment?
Someone who has another job lined up but is between them when they take the survey. This is not so much of a problem, as they only technically count as unemployed
What is geographic immobility of labour?
They may have the skills, but can’t get to where the vacancies are. The government can fix this by choosing to locate government services in areas of high unemployment
What is occupational immobility of labour?
This is basically another name for structural unemployment. People lack the skills to fill the vacancies
List some of the individual effects of unemployment
- loss of skills while not working
- negative stigma attached to unemployment
- lower disposable income
- more crime/social problems
- loss of self esteem/mental health issues
- losing social bonds/community connections
- no sense of satisfaction
- people suffer in poverty
List some of the societal effects of unemployment
- government has to increase the job seekers allowance
- less tax revenue
- leads to higher budget deficits
- forces either cut backs on public expenditure or a higher tax burden on working people
- Lost skills leads to a decrease in available human capital
- lower GDP
- less expenditure
