Unemployment Flashcards
Information sourced from the RBA website
Who is considered employed?
People in a paid job for one hour or more in a week.
Who is considered unemployed?
People not in a paid job but actively looking for work.
Who is excluded from the labour force?
Those not working or looking for work
e.g., retirees, students, or those permanently unable to work.
Working age population
How is the labour force calculated?
By summing the employed and unemployed populations.
What is the unemployment rate?
The percentage of people in the labour force who are unemployed.
What is cyclical unemployment?
Unemployment that varies with the economic cycle, rising in downturns due to reduced demand.
What is structural unemployment?
Unemployment due to a mismatch between job availability and worker skills or location.
What is frictional unemployment?
Short-term unemployment during job transitions or entry/exit from the labour force.
What is underemployment?
When employed individuals want and are available for more working hours.
1 - part-time workers who would prefer to work additional hours
2 - people who sually work full time, but are currently working part-time hours.
What is hidden unemployment?
Individuals not counted as unemployed but who would work if jobs were available
e.g., discouraged workers.
For example, someone might have looked for work for a long time, given up hope and stopped looking, but still wish to work
What is seasonal unemployment?
Unemployment related to seasonal job demand, such as fruit picking or ski instructing.
What are the main types of unemployment?
Cyclical, structural, and frictional unemployment.
How does cyclical unemployment affect inflation?
Higher cyclical unemployment can lower inflation due to increased competition for jobs.
Which type of unemployment can last longer, and why?
Structural unemployment, due to the time needed to gain new skills or relocate.
What monetary policy can help reduce cyclical unemployment?
Expansionary monetary policy to increase demand and encourage hiring.
