Unemployment Flashcards
what is the claimant count
Number of people claiming unemployment benefits like JSA
what is JSA
job seekers allowance
benefits of the claimant count
- Cheap and easy to obtain the data
- easy to understand
- up to date
problems with the claimant count
- can be manipulated by the government
- misses unemployed people
- misses those seeking work but not eligible for benefits
- has to be claimed by the person
- can’t be used for international comparisons
What is the ILO Labour Force Survey
takes sample of population and adds those who aren’t working but currently seeking work.
benefits of the labour force survey
- More accurate than CC as it embraces more people
- Better for international comparison
- considers underemployed
problems with the labour force survey
- expensive to carry out
- sample could be unrepresentative
consequences of high unemployment
- Loss of output as economy isn’t at full capacity
- less spending in economy as lower incomes reduces firms profits can lead to deflation
- increases gov debt as they spend more on benefits and receive less income tax
- increases crime rates
- reduces standard of living increasing relative poverty
how many people are economically inactive in the UK
9 million
underemployment
someone has a job that doesn’t fully utilise their skills or experience to the best effect
which graph is best to show unemployment
PPF
why is full employment good
maximises production and raises living standards
cyclical unemployment
unemployment that is effected by cycles of economic downturn and upturn
seasonal unemployment
Unemployment that occurs due to lack in demand for labour in certain industries at times like tourism, it is predictable
structural unemployment
Decline in certain industries due to new technology or cheaper alternatives, traditional manufacturing in the uk
Frictional unemployment
unemployment caused by workers changing jobs, economy will always have this
what is real wage unemployment
when real wages are pushed above equilibrium employment level so excess supply of labour causes unemployment
what causes real wages to increase above equilibrium
introduction of NMW or unions negotiating for higher wages
What does migration do
increases supply of labour and thus national income especially if migrant skills are different to native workers
how does migration affect unemployment
during recession it increases unemployment especially for low skilled workers, no effect during boom
