Unemployment

Question 0

Supply side policies to improve occupational mobility of labour

Answer 0

Spending gov money on training schemes targeting long term unemployed
Youth contract - scheme for subsidising firms through grants or tax relief to take on apprenticeships or to give jobs to unemployed youths
Subsidising firms in their training of existing staff so that they have more transferable skills were they to be laid off
Improving quality of public sector eduction
Wrk experience
Mandatory work activity

Question 1

Expansionary fiscal / monetary policy to cure cyclical unemployment
Eval

Answer 1

Raise aggregate demand by either running fiscal deficit ( cutting taxes/ raising gov spending) or by cutting interest rates / devaluing pound/ pursuing more quantitative easing

Cyclical unemployment cures may cause inflation ( if economy is close to capacity or if gov underestimates size of multiplier effects of their policy ) or worsen trade position because they cause incomes to rise and volume of imports to increase
Boosting AD only creates JOB VACANCIES which is pointless if hue he root cause of unemployment is structural, frictional or voluntary rather than cyclical

Question 2

Evaluation of supply side policies to improve occupational mobility of labour

Answer 2

1) costs money
2) takes too long to work
3) opportunity cost
4) hard to implement efficiently
5) depends on people

Question 3

Policies to implore geographical mobility of labour

Answer 3

1) improve stock of public sector housing
2) home swap direct
3) subsidise costs of relocation
4) improve transportation to allow people to commu the longer distances
5) regional minimum wage - higher minimums in rare as with higher living costs
6) regional public sector pay deals - public sector workers in cheaper areas get lower wages for doing the same job than workers in more expensive areas
7) subsidise firms to migrate to areas of high unemployment through enterprise zones which give corporation tax relief or other grants

Costs money
Opportunity cost
May not tackle root cause of immobility - not financial but social ties

Question 4

Supply side policies to cure frictional unemployment

Answer 4

1) improve information at job centres
2) improve geographical mobility of labour to widen search area within which unemployed are prepared to commute
3) reduce duration over which benefits are provided

Costs money
Opportunity cost
Forcing unemployed into wrong job too early could cause allocative inefficiency in economy

Question 5

Supply side policies to cure involuntary unemployment

Answer 5

Raise minimum wages 
Reduce benefits
Cut income tax rates
Raise personal allowances
Tax credits return income tax to families in low paid work
Granting tax relief for child care