Unemployment Flashcards
Unemployment
those without work who are willing and able to work
unemployment rate
the proportion of the workforce who are not employed expressed as a percentage
=no. of unemployed/total workforce
claimant count
the people who are actively seeking work and claim job seekers allowance (lower than actual unemployed)
labour force survey
includes people who do not claim unemployment benefits (higher than claimant count)
those in the labour force
people in work or unemployed
those not in the labour force
home makers
students
early retired
discourage workers (given up looking for work)
when these are included, then unemployed becomes economically inactive (not necessarily because may still contribute)
measuring unemployment
claimant count
international labour force survey
underemployment or hidden unemployment
What, why
some people work, but is not always considered employment
part-time work
low marginal product (people doing meaning jobs; such as USSR, 0 unemployment because people would operate lifts)
over-qualification (people being over-qualified for a job eg. a doctor taxi driver)
limitations or problems with measuring unemployment
who is included in labour force (students because lack of work)
under-employed, only employed by name but not really in life (eg. lawyer working a bar) (consider not a problem because receiving income)
survey limitations or smaller value of claimant count
illegal work, but claiming unemployment
concentrations of unemployment
types of unemployment
disequilibrium unemployment (real-wage, demand deficient) equilibrium unemployment frictional unemployment structural seasonal (regional)
frictional unempoyment
What, why
unemployment during the inter-job period,
people who decide not to work
could be caused by imperfect communication between between employers and unemployed workers.
normally short term in nature, but high benefits could extend this
structural unemployment (What, why)
when industries or structure in an economy closes down (can find new work difficult if low mobility of work force)
can be caused by declined demand for a product (eg less coal for more renewables)
intense foreign competition (US steel)
tech advances (redundancies for workers)
it is a natural form of unemployment, but it cold be extended as skill market disappears
seasonal unemployment
What
time in-between jobs due their seasonal nature (tourism)
solutions for frictional
lower benefits to increase incentive that are available
better information flow
solutions for structural
internationalist; better labour force mobility (education, retraining programs, subsidize firms that train recruits, tax-break or encourage to move to where skills needed, apprenticeship schemes ) free market; reduce unemployment benefits deregulate labour market
equilibrium unemployment
when labour market could be at equilibrium there would still be unemployment (people unwilling to work)
disequilibrium unemployment
occurs when there are conditions that prevent the market reaching equilibrium
real-wage (classical)
What
caused by trade unions and government minimum wages interfering with the labour market (classical economist view)
solutions to real-wage unemployment
reduce power of trade unions
lowered minimum wage
demand deficient unemployment
a slow down in the economy will cause less demand for labour (Keynesian unemployment)
sticky downwards effect because wages do not want to be lowered
distribution of unemployment (limitation)
geographical disparities
age
ethnic
gender
costs of unemployment
to oneself(less income and standard of living;costs will increase over time, especially mental) to society (poverty, homelessness, crime and vandalism) to economy (lower actual output, opp. cost for benefits, less tax income)
