Unemployment

Question 1

What are the 2 definitions of unemployment

Answer 1

• level of unemployment is the number of people looking for a job who cannot find one
• Rate of unemployment is the number of people out of work as a percentage of the labour force

Question 2

What is the claimant count

Answer 2

Number of people claiming unemployment related benefits from the government

Question 3

What are advantages and disadvantages of using the claimant count

Answer 3

Advantage- data is easy to obtain and there is no cost
-it’s updated monthly so is current

Disadvantage -it can be manipulated so government tries to make it seem smaller
-it excludes people who are looking for work but aren’t eligible to claim job seekers allowance

Question 4

What is the Labour force survey

Answer 4

It asks people who aren’t working if there actively seeking work and people who say yes are added to produce ILO unemployment count

Question 5

Advantages and disadvantages using the Labour force survey

Answer 5

Advantage ‘
- more accurate than claimant count
-internationally agreed measure of unemployment so easy to make comparisons between countries

Disadvantages
-less up to date than the claimant count
-it’s expensive to collect and put together data
-sample may be unrepresentative off population C as a whole

Question 6

How does unemployment cost the economy

Answer 6

High unemployment suggests economy is doing badly
-less goods and services produced because there is unused Labour in the economy
-Government have extra costs on welfare benefits and less revenue because there is less tax being paid
-Leads to lower income and less spending
-Companies sell fewer goods and services