Unemployment Flashcards
Definition
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
Unemployment rate
Unemployment rate= number unemployed/total labour force
Measuring unemployment
Claimant unemployment- the number of people in receipt or unemployment related benefits
Alternative measures
Labour force surveys
Employment/population ratio
Flows into and out of unemployment
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
Labour market
Job seekers+ employers = labour market
Equilibrium unemployment
Frictional (search)
Structural-
changing pattern of demand
Technological unemployment
Regional unemployment
Seasonal unemployment
Disequilibrium unemployment
Happens when markets are prevented from clearing
- sticky wages
Recession on employment
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