Unemployment and Employment

Question 1

Unemployment

Answer 1

Working age ppl willing and able to work, seeking work actively but w/o work

Question 2

Measures of unemployment

Answer 2

Labour force survey:
Unemployment / economically active (unemployed + employed) × 100

Claimant count: no. of ppl receiving unemployment benefits

Question 3

Labour force survey negatives

Answer 3

Discouraged workers:
not a measure of unemployment bc they’re not willing to work

Inactive groups:
Workers could have high productivity buy they’re not willing to work therefore not counted

Underemployment:
Those working but jobs don’t meet skill lvl or wish to work longer hrs
Eg- graduate student being a waiter

Question 4

Claimant count negatives

Answer 4

●Not everyone can claim
●Benefit fraud

Question 5

Unemployment causes

Answer 5

●Frictional unemployment:
Workers unemployed for short length of time when in-between jobs
High benefit lvl = longer time ppl can afford to look for better jobs
Supply side factor

●Seasonal unemployment:
Workers unemployed at certain times of the Yr bc of temp change in D
Eg- tourist industry
Supply side factor

●Structural unemployment:
patterns of D & production change leads to Workers. unemployed in labour markets where D and decreased
Mismatch of skills
Supply side factor

● Cyclical unemployment:
Unemployment caused buy a decreased in AD
Demand side factor

Question 6

Types of structural unemployment

Answer 6

Regional: lack of mobility between FofP therefore firms don’t have resources in some regions

Sectoral: steel & shipping instustries have declined in the UK leads to skills being unneeded & w/o retraining, workers can’t adapt to a change in D

Technological: new tech so skills unneeded

Question 7

Unemployment negatives

Answer 7

Consumer
- low income … low living standard … increase borrowing for g/s
…increase bankruptcy

Firms
-decrease D for g/s … low profit … low reinvestment … no growth
- LT unemployment … reduced pool of skilled workers for them to hire from

Government
- Low income tax revenue bc low spending on g/s services & low corporation tax revenue
- low g/s produced by private sector … increase gov spending … increased borrowing … increased national debt

Question 8

Unemployment pros

Answer 8

• Low inflation
  Low employment = no growth so gov policies eg lower tax rate to incentives spending

-increased pool of workers
Increased flexibility to choose most productive worker … decrease CofP & increase profit

-time for workers to find suitable jobs
Decrease discouraged workers bc no stress to find work bc not alone