Unemployment Flashcards
Why may climant count not be accurate ?
Not everyone will claim it such as:
People with savings or families and partners to support them
People who think they will get a new job very soon
Why may LFS be inaccurate ?
Sample size is remarkably small and extrapolations may be inaccurate
Examples of those economically inactive
House wives / house husbands
Full time student
Disabled
Early retired
Prisoners
Long term sick and full time home carers
What are the 6 reasons people may become unemployed
Friction
Seasonal
Structural
Technological
Cyclical
Classical
Frictions
People who are between jobs because they have left one job but not yet found another
Those economically inactive
Eg recent graduates
Seasonal
When demand for certain types of labour only exists at a certain time of the year
Eg agricultural labour
Structural
Caused by a change in the structure of the economy , demand for certain types of labour no longer exists
Eg coal strikes
Technological
A sub category within structural employment, workers are being replaced by machinery
Eg self checkout
Cyclical , keynesian or demand- deficient
Caused by a lack of AD and fall during recovery or growth
Eg bulk of unemployment caused during a recession
Classical or real wage
Caused by wages being too high for the labour market to clear
Eg Minimum wages causing unemployment
What does excess supply = ?
Unemployment
Reasons why labour may be geographically immobile
Need to be near dependents
Children settled in school
Differences in housing costs
Friends and social ties
Cultural or religious ties
Costs of unemployment
Loss of income , lower living standards
Stress , low self esteem mental health problems
Lower tax receipts for government
Increase in govements transfer
payments
Crime , drug abuse and social problems
Loss of skills
Lower business and consumer confidence
Lower demand and profits for businesses
Negative / downwards multiplier effect
4 sources of demand pull inflation
Increase incomes / consumer confidence
Falling Intrest rates
Increased govement spending
Increased exports
4 sources of cost push inflation
Rising wages
Increase indirect taxes
Rising energy / fuel costs
Rising raw material prices
