Unemployment

Question 1

Labour force

Answer 1

Total number of workers, incl employed and unemployed

Question 2

Unemployment rate

Answer 2

% of labour force that is unemployed

U= no. Unemployed / labour force x 100

Question 3

Labour force participation rate

Answer 3

Labour force / adult pop x100

Question 4

Natural rate unemployment

Answer 4

Normal rate of unemployment around which the unemployment rate fluctuates

Question 5

Cyclical unemployment

Answer 5

Deviation of unemployment from its natural rate

Question 6

Costs of unemployment

Answer 6

Loss of earnings
Stress
Self-esteem problems
De-skilling (historisis)
Family breakdown

Question 7

Does u.rate measure what we want it to?

Answer 7

Hard to distinguish between ‘unemployed’ and ‘not in labour force’
Discouraged workers (given up on job search) don’t show up on statistics
People may claim to be unemployed to receive financial assistance

Question 8

Unions

Answer 8

Worker association that bargains with employers over wages and working conditions
Early 1980s= over 1/2 UK labour force unionised

Question 9

Efficiency wages

Answer 9

Above equilibrium wages to increase worker productivity

Question 10

Claimant count

Answer 10

Count number claiming unemployment benefit payments from the government