Unemployment

Question 1

Unemployment

Answer 1

Workers don’t have jobs but willing and able to work

Question 2

Employment

Answer 2

Members of economy 16+ who have done at least 1 hour of work when measured

Question 3

Economically inactive

Answer 3

People of working age who are neither employed nor unemployed

Question 4

Ways of measuring unemployment

Answer 4

Claimant count

Labour force survey

Question 5

What’s the LFS

Answer 5

Done by ONS

survey of 60,000 households every 3 months

Question 6

What’s the claimant count

Answer 6

Monthly count of those seeking JSA

Question 7

Advantages of LFS

Answer 7

Fuller picture- includes those not eligible for JSA

Comparative

Question 8

Disadvantages of LFS

Answer 8

Sampling errors
Difficult to decide if people are sick etc.
Expensive

Question 9

Advantage of claimant count

Answer 9

More accurate
Data easy to obtain
Current as updated monthly

Question 10

Disadvantages of claimant count

Answer 10

Criteria always changing
Can be manipulated by Gov
Excludes those not eligible for JSA

Question 11

4 types of unemployment

Answer 11

Frictional
Structural
Demand-deficient (cyclical)
Classical (real wage)

Question 12

What is frictional unemployment

Answer 12

Time taken to move between jobs

Question 13

Structural unemployment and examples

Answer 13

Mismatch of skills in labour market
Occupational immobilities- difficulties to learn new skills
Geographical immobilities- can’t move region
Technological change- labour saving
Structural change in economy- lack of competitiveness (no market)

Question 14

Demand deficient unemployment

Answer 14

Economy not at full capacity

Question 15

Classical unemployment

Answer 15

Wages pushed above equilibrium

Question 16

3 costs of unemployment to an economy

Answer 16

lost output
financial cost
social effects
HYSTERESIS- unemployment breeds unemployment

Question 17

2 ways increased unemployment may benefit economy

Answer 17

easier to recruit

inflation kept low