Unemployment Flashcards

1
Q

Definition

A

An unemployed worker is defined as one who is out of work, but purposively looking for work,and available for work

Work is defined as work for money , students and housewives work but are not unemployed

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2
Q

Unemployment rate

A

Unemployment rate= number unemployed/total labour force

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3
Q

Measuring unemployment

A

Claimant unemployment- the number of people in receipt or unemployment related benefits

Alternative measures
Labour force surveys
Employment/population ratio

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4
Q

Flows into and out of unemployment

A

From jobs:
People made redundant/ sacked
People resigning
People temporarily laid off

From outside the labour force:
School/college leavers
People returning to to the labour force

To unemployed

To jobs :
People taking new jobs
People laid off returning back

To outside labour force :
People who give up looking for jobs 
People who reach retirement age 
People who temporarily withdraw  from labour force 
People who emigrate/die
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5
Q

Labour market

A

Job seekers+ employers = labour market

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6
Q

Equilibrium unemployment

A

Frictional (search)

Structural-
changing pattern of demand
Technological unemployment
Regional unemployment

Seasonal unemployment

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7
Q

Disequilibrium unemployment

A

Happens when markets are prevented from clearing

  • sticky wages
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8
Q

Recession on employment

A

Starts off Normal

Demand for labour decreases creating demand deficient unemployment

Lowering wages and number of workers (flexible wages)

Or sticky wages will create demand deficient unemployment and disequilibrium unemployment and keep wages the same but see a larger reduction in employment

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