Unemployment Flashcards
Working age population
16-64
Define active population (workforce)
people of working age who are able to work, actively seeking work or actively working
Define inactive population
people of working age who aren’t able to work or aren’t actively seeking work
Define unemployment
able to work and actively seeking work, but not working
Unemployment rate formula
unemployment level / active population x 100
Employment rate formula
number of employed people / total working age population x 100
Formula for activity/participation rate
active population / working age population x 100
In what circumstances may the unemployment level increase but the employment level stays the same?
- increase in immigration
- economically inactive people started looking for work
ILO Labour Force Survey
- survey 80,000 households
- ask if anyone out of work for 4 weeks and ready to start in 2 weeks
- ^^ surveyed every quater
Claimant Count
- how many people are claiming benefits
Limitations of ILO’s Labour Force Survey
- 27 million households in UK, not 80,000
^^ not necessarily accurate estimate
Limitations of Claimant Count
- not everyone who is unemployed will claim benefits
^^ - stigma around claiming benefits
^^ - not allowed if partner is high earner - underestimates unemployment
Define underemployment
-when workers are employed but may want more hours or are underusing their skills
Real wage/classical unemployment
- wages above equilibrium, creating excess supply of labour
^^ could be due to NMW or trade unions
Cyclical unemployment
- not enough demand in economy, firms produce less, decreased derived demand for labour
^^ 2008 recession
(unemployment on graph between the two Ys)
Structural unemployment
- when the structure of the economy changes and jobs move elsewhere
(UK 1980s moving from manual labour to service sector)
^^ due to occupational/geographical immobility
Define occupational immobility and how the government fix this
- when workers can’t move between different jobs because they lack the skills needed
FIX: - education, training, apprenticeships
Define geographical immobility and how the government fix this
- when workers struggle to move between different areas due to family ties, expense and time
FIX: - infrastructure (HS2), relocation subsidies
Define frictional and seasonal unemployment
- frictional - when people are temporarily unemployed whilst searching for a new job
- seasonal - unemployment due to their job being seasonal (only needed at specific times of year)
