Unemployment Flashcards
What is regional unemployment?
unemployment rate varies across regions
What is long term unemployment?
People unemployed for over 12 months
What is mass unemployment?
When 1 in 10 of the labour force are unemployed
What is youth unemployment?
unemployment rate
(the proportion of the economically active population who are unemployed)
*for all 16–24-year olds
What are discouraged workers?
inactive work-seekers who have ceased to seek work because they believe there are no suitable available jobs
What is hidden unemployment?
people who do not have work but who are not counted in government reports
• for example, people who have stopped looking for a job and people who work less than they want to
What is underemployment?
where individuals are employed, but their employment is insufficient in terms of hours worked, skill utilisation, or income to fully meet their economic needs or potential.
Define unemployed
Someone of working age, willing and able to work, and actively seeking work, but cannot find a job.
What is the unemployment rate?
the percentage of the labour force that are unemployed
- Labour force includes those in work and the unemployed
What are key measures of unemployment?
Labour force survey
Claimant count
What is the Labour Force Survey?
This survey asks 60-70,000 UK households to self-classify as being employed, unemployed or economically inactive.
What is the Claimant Count?
This counts the total number of recipients of Job Seeker’s
Allowance (JSA) added to those looking for work to claim Universal Credit (UC).
What is the gig economy?
The gig economy is a work arrangement where people perform short-term, flexible, and often freelance work
• typically through online platforms or apps, e.g. rideshare drivers, virtual assistants, and food delivery workers.
It is linked to zero-hour contracts - employment arrangements where
workers are hired without a guarantee of work hours.
What is technological unemployment?
the displacement of human workers by machines, automation, and technology, such as AI.
What is real wage unemployment?
Caused by wages being too high relative to the productivity of workers
• minimum wages and trade union activity can push the wage above its market equilibrium
What is frictional unemployment?
Short-term unemployment caused by people moving between jobs, moving to a new location, or
re-entering the workforce after a break.
What is Cyclical Unemployment?
The unemployment rate rises during an economic downturn; it is caused by fluctuations in the business cycle.
*Sometimes called demand-
deficient unemployment.
What is structural unemployment?
Caused by changes in the economy, like the decline of certain industries or the rise of automation.
It happens when there’s a mismatch between the skills & location of workers and the needs of employers.
*A lack of geographical and occupational mobility of labour contributes.
What is seasonal unemployment?
Seasonal workers, such as construction workers, retail assistants, might be without paid jobs due to the time of year when there is less need for their work
What is full employment?
• An absence of cyclical unemployment (the output gap is closed)
• Number of job vacancies = number of people actively seeking work
*There will always be some unemployment – frictional as people move between jobs
Costs of unemployment?
• Economic costs
- loss of output foregone, fall in real incomes, lower
standard of living, lower tax revenue, higher welfare costs, larger budget deficit, loss of workers to other countries (emigration)
• Social costs
- increase in poverty and welfare dependency, increase in
physical and mental health increasing healthcare costs
- link between persistent unemployment and social problems (e.g. vandalism, low level crime, shoplifting etc.)
Benefits of unemployment?
• Reduced risk of inflation – lower wage demands & price discounts
• Pool of unemployed available for growing businesses
• Increase in self-employment start-ups, more entrepreneurship/innovation
What is the Phillips Curve?
The Phillips Curve is an
economic model that shows
the possible inverse non- linear relationship between the unemployment rate and the rate of inflation
What is stagflation?
When both unemployment and inflation are high
(A stagnant economy with inflation)
