unemployment Flashcards
what is seasonal unemployment
it occurs when the demand for certain types of labour changes with the seasons of the year
example of seasonal unemployment
holiday areas such as Cornwall where unemployment can reach very high levels during winter
policies to reduce seasonal unemployment
- introduce regulations which involve paying workers throughout the year, even if the work is temporary
- gov could create jobs in the off-season to improve infrastructure
what is frictional unemployment
it is transitional unemployment due to people moving between jobs so is the period of time while they are looking for a job
examples of frictional unemployment
- people who have taken early retirements but want to return to work
- school/college/uni leavers
- might be waiting for a better job then the one they have been offered
policies to reduce frictional unemployment
- reducing unemployment related benefits so people accept employment faster however this might cause people to take jobs that is not fully suited to their skills
- better matching of labour to current vacancies e.g job websites
what is structural unemployment
it is where the structure of the economy change so there is a mismatch of skill and job opportunities as the demand for labour changes. This means that employment in some industries increases whilst others decrease
what are the 3 ways structural unemployment is caused
- change in pattern of demand e.g. manufacturing jobs have been lost due to the economy becoming more service-sector based
- occupational immobility (people lack the skills to go into different industries)
- geographical immobility (little jobs in a persons area but vaccines in places further out)
policies to reduce structural unemployment
- education/training schemes so people have skill and qualifications so are able to find new work
- housing subsidies in places that are expensive with high employment so unemployed people can take jobs there
- employer subsidies which would incentivise firms to move to area of high unemployment
what is cyclical unemployment
involuntary unemployment and occurs when individuals lose their jobs as a result of a decrease aggregate demand
example of cyclical unemployment
When a recession is occuring as consumer demand falls
policies to reduce cyclical unemployment
- increase in government spending or lower taxes to boost disposable income
- governments providing jobs that are labour intensive e.g. construction
- government subsidies for businesses that take on the long term unemployed
- Lower taxes on businesses which employ more people
- cutting interest rates to decrease borrowing, encourage spending/investment, reduce exchange rate and make exports more competitive
