Unemployment Flashcards
Unemployment occurs…
when people who are willing and able to work can’t find job
economically inactive
children, student, retired, disabled
labor force
Total number of workers who are available for work
factors what cause unemployment
- demographics
- social and cultural factors
- school leaving age
- retirement age
- proportion of women who join the labor force.
unemployment rate formula
number of unemployed / number of labor force x100
does a person who doesn’t look for job considered as labor force?
No
what are the difference between stock and flow?
stock is measured at particular time while flow is measured overtime
Are graduates who just left their universities considered unemployed?
Yes, the rate will increase
When machinery replaces people’s jobs, does unemployment increase?
Yes
When people voluntarily left job, does unemployment increase?
Yes
If people become ill, does unemployment increase?
No, the labor force decreased
What is claimant count
The measure of unemployment those who register as unemployed to claim unemployment benefits.
what is the downside of claimant count
the amount is likely to be overstated or understated due to greed or lack of connection to conduct the survey
What is the labor force survey?
Department of Statistics
What is the downside of labor force survey
Sampling error
What are the 2 main causes of unemployment?
- Lack of job opportunities
- substandard education
What are the 2 causes of lack of job opportunities?
- Lack of startups
- Absence of vocational training
What there are lack of startups?
- Government support
- Law and Order situation (cigarettes and vape)
What are the 3 main reasons of substandard education?
- incapable teachers
- unaffordable education
- improper hiring
What are the 3 types of unemployment?
- frictional unemployment
- structural unemployment
- cyclical unemployment
explain cyclical unemployment
due to decrease in AD probably cause by global threats like COVID-19
explain structural unemployment
Due to changes in the country’s structure.
1. The focus of the country changes
2. Decline in the economy
3. Changes in how things are done (online) - technology improves
Frictional unemployment (casual and seasonal also included in this)
Due to voluntary unemployment, graduates don’t want to accept their first job. They spend time transitioning from one job to another without contributing to the economy.
Casual unemployment
Work by contracts for few months and rest before the next one
Seasonal unemployment
Fishermen don’t anything during monsoon
4 consequences of unemployment (-ve)
- decrease in population
- Social disturbance
- Individual skills become dull causing them to have low self-esteem
- Low savings lead to poverty
Consequences of unemployment (+ve)
- The firm might benefit from a wide choice of potential workers who don’t request a high salary
How to overcome sampling error?
- The government provides better access to information for the target audience to give correct information
- The government connects with tax collectors and bank to check on transaction records
How to overcome understated and overstated data for claimant count?
- Provide better access to survey/information/internet so people can fill up the survey
- Stricter requirements and evidence before claiming the benefits
