Unemployment

Question 1

How is unemployment measured?

Answer 1

-according to internationally accepted guidelines specified by the international labour organisation (ILO)

Question 2

Unemployed people in the UK are:

Answer 2

-without a job, have actively sought work in the last four weeks and are available to start work in the next two weeks o
Or:
-have found a job and are waiting to start it in the next two weeks

Question 3

What does claimant count measure?

Answer 3

The number of people claiming benefits principally for the reason of being unemployed

Question 4

Why do the two measurements differ?

Answer 4

-Government polices on who is eligible for benefits (Full time students cannot be claimants but can seek part time works so can show up as unemployed)

-Demographic trend - people over 65 seeking jobs would not be eligible to be claimants but would show up as unemployed. With an aging pop. This segment is growing

Question 5

What is the labour force?

Answer 5

The no. Of people in an economy who are able and willing to work

Question 6

What is employment rate?

Answer 6

The % of working age population (16=64) that is employed

Question 7

What is the activity rate?

Answer 7

% of working age population willing & able to work
(Employed + Unemployed)

Question 8

What is unemployment rate?

Answer 8

% of people who are able & willing to work that are unemployed

Question 9

What are dependency ratios?

Answer 9

The burden on the productive part of the population to maintain the upbringing and pensions of the economically dependent

Child population % / adult population %

Question 10

What is underemployment?

Answer 10

Part time workers who would like to work longer hours or people who are over qualified for the job that they are doing so that their skills are not being utilised

Question 11

What is precarious employment?

Answer 11

Permanent jobs without permanent employee rights, typically poorly paid (cannot support a household) & insecure (limited legal protection for tenure and conditions)

Question 12

What is frictional unemployment?

Answer 12

Short term unemployment that occurs when workers are between jobs

Question 13

What is seasonal unemployment?

Answer 13

When demand for workers is seasonal leaving them unemployed during the off-season

Question 14

What is real wage unemployment?

Answer 14

Unemployment that occurs because wages are stuck at too high a level for markets to clear

Question 15

What is demand deficient (cyclical) unemployment

Answer 15

When their is insufficient AD in an economy to provide jobs for everyone seeking a job

Question 16

What are skills shortage?

Answer 16

Tends to occur in specific markets where demand for labour > supply of labour

Question 17

What is equilibrium unemployment?

Answer 17

When demand = supply in the labour markets so wages stay constant

Natural rate of unemployment

Question 18

What is structural unemployment?

Answer 18

When the pattern of demand or supply changes (e.g due to technology advances) leaving workers unemployed

Question 19

What types of structural unemployment is there?

Answer 19

Occupation/sectoral
Geographic

Question 20

What is occupational unemployment

Answer 20

Where there is less/no demand for certain occupations or sectors of the economy

Question 21

What is geographic structural unemployment?

Answer 21

Where there is less/no demand in certain regions of the economy

Question 22

Structural unemployment can lead to…

Answer 22

Labour market hysteresis

Question 23

What is labour market hysteresis?

Answer 23

When umemployment leads to a loss of skills and confidence, making it harder for workers to get a job and trapping them in unemployment.

These workers may drop out of the labour market entirely and are called discouraged workers/

Question 24

What is youth unemployment?

Answer 24

When young people experience difficulties in getting jobs as they do not have experience

Question 25

What factors affect demand for labour?

Answer 25

-Demand for the finished goods
-Wages
-gov. Regulations

Question 26

What factors affect PED for labour?

Answer 26

-proportion of labour costs in the total cost of the business
-PED of the good
-availability of labour substitutes

Question 27

What affects supply of labour

Answer 27

-Wages
-Trade unions
-Migration

Question 28

What affects PES of labour

Answer 28

-skill level required
-geographical factors of labour
-proportion of active to inactive population