Unemployment Flashcards
Working age population?
16-64
What’s is the active population
People of working age who are able to work and actively seeking work or actively working
What is inactive population
People of working age who aren’t able to work / not actively seeking work
Define unemployment
When someone is able to work and is actively seeking work but not working
How do you calculate unemployment rate
Unemployment level/active population X 100
What is the unemployment level
The number of people who are unemployed
How do you calculate the activity / participation rate
Active population / working age population X 100
How do you calculate employment rate
Employment level/ working age population X 100
Why might unemployment rate fall
A decrease in the number of unemployed people or an increase in the economically active population
How could unemployment level increase without affecting the employment level
If there was an increase in immigration
Why might unemployment rate fall
A decrease in the number of unemployed people or an increase in the economically active population
Why is the ILO limited
Only serves 80000 households out of 27 million so does not give an accurate estimate of unemployment across the uk
Why is the claimant count limited
Not everyone who is unemployed will claim benefits
Will underestimate unemployment
How is real wage unemployment shown on a labour market diagram
Wages are above the equilibrium creating excess supply of labour
What is real wage / classical unemployment
When the wage is above equilibrium wage which creates excess supply of labour = Unemployment
Why would wages stay abouve equilibrium price and not decrease
The govt made it illegal to pay workers the equilibrium price
National minimum wage
What else may push wages above the equilibrium
Trade unions
What is demand deficient / cyclical unemployment
When there is not enough demand in the economy causing firms to reduce their demand for labour firing workers creating unemployment
When does structural unemployment occur
When the structure of the economy changes and jobs shift from pre sector to another
2 reasons for structural unemployment
Occupational immobility
Geographical immobility
What is occupational immobility
When workers cant move between different jobs because they lack the skills needed
What does occupational immobility lead to
Structural unemployment because the economy has changed structure
How can the government intervene to help with structural unemployment
Education
Training
Apprenticeships
What is occupational immobility
When workers cant move between different jobs because they lack skills needed
What is geographical immobility
When workers struggle to move location to fill new jobs
How can governments reduce geographical immobility
Using employment subsidies or transport improvements
How is cyclical unemplyment shown on an ad-as diagram
Left shift in aggregate demand
What is frictional unemployment
Temporal unemployment whilst job searching
What is seasonal unemployment
When people are unemployed due to seasonal changes
What is hysterisis
When a recession causes long-lasting effects which persist after the economy comes out of recession
