Unemployment Flashcards
Define unemployment
Willing and able to work who are without a job
Only those in labour force can be classed as employed
Who is not classed as unemployed even though they don’t have a job?
Disabled Full time parents Pensioners Children Full time students
Define economically inactive
Individuals who are not in the labour force but are of working age
Who is within the labour force
Employed and unemployed
Why is unemployment a macroeconomic objective?
LOST OUTPUT- there is an oppurtunity cost as there is a loss of potential outpour given by unemployed people isn’t given.
FISCAL COSTS- less tax revenue so a strain on government spending and increased tax rates
PRESSURE ON OTHER FORMS OF GOVERNMENT SPENDING-Due to government spending on unemployed, this is will put a strain on other services
NEGATIVE SIDE EFFECTS TO INDIVIDUALS- Depression and Poor mental health
HYSTERESIS- Loosing skills due to unemployment Over a long period of time making you unemployable
What are the government plans?
Full employment which is around 3% unemployment rate
Why is full employment not the same as zero unemployment?
Impossible as people will always be unemployed
Unemployment rate is:
% of your workforce without a job
Unemployed/labour force x 100
What is the labour force survey
Questionnaire of 60,000 households carried out by the office for National Statistics to collect data for unemployment using ILO measure of unemployment
Define ILO measure of unemployment
Individual is classed as unemployed if they are out of work and want a job and actively seeking work in the last 4 weeks and available to work in the next 2 weeks or is out of work and has found a job and is willing to work in 2 weeks
What is claimaint count
Amount of people who claim and are eligible for unemployment benefits (Job seekers allowance in the UK)
What are the advantages of LFS measure?
Allows international comparison
Includes individuals who are unemployed and don’t receive claimant account
What are the disadvantages of LFS measure?
Not everyone will take part
People lie
Involves collecting data which is time consuming and expensive
What are the advantages of claimaint account?
Accessible as government have access to claimaint accounts
What are the disadvantages of claimant count
Some people are not eligible to claim
Problem in country without benefit system
