Unemployment Flashcards
What is unemployment
Number of people actively looking for a job but cannot find one
How do we calculate the unemployment rate
U = (Number of Unemployed) / (Labor Force) x 100
Define economically active
People who are employed or are actively seeking employment of working age
Define economically inactive
Those not in work and not actively seeking work or working age
What is the labour force
The economically active people unemployed or employed
What is underemployment?
Those who have work that would prefer to work longer hours or are not representing their skill to the fullest
What is hidden employment
Those who would take a job if offered but are not actively seeking work
What is the claimant count?
The number of people claiming unemployment-related benefits
What are the costs of unemployment
- Lower standard of living
- Poverty and levels of crime
- Lower AD
- Government budget deficit
What is the ILO unemployment rate?
A measure of % of the workforce who are without jobs but are available for work, willing to work and looking for work
What are the problems with measuring unemployment
- Figures can’t be fully representative
- Does not show underemployment
What are the causes of unemployment
Frictional unemployment - time in between transferring jobs
Structural unemployment - decline in a sector
Cyclical unemployment - recession = low demand for labour
Wage levels - picky employees a cause voluntary unemployment
Migration - inflow can increase unemployment
What are the costs of unemployment (by group)
Consumers - Standard of living
Firms - lower demand
Workers - lower standard of living
Government - lower tax and higher claimant
Societal - poverty, homelessness, crime
