Unemployment Flashcards
1
Q
Consequences of unemployment
A
- Lower incomes and standards of living
- Opportunity cost of unemployment and benefits payed
- Costly as government pays unemployment benefits
- Economy produces inside the PPC and so is inefficient
- Resources are wasted
- Chancellor loses revenue from tax
- Externalities such as crime etc
- Erosion of human capital - gradual loss of skills
- Hysteresis - longer people are unemployed, the harder it is to gain work