Unemployment and Employment

Question 1

benefits of high levels of employment

Answer 1

• high tax intake from income taxes
• less current gov. spending on social welfare payments
• to offer a skilled, diverse labour force to attract FDI
• cultivating a thriving ecosystem of indigenous businesses

Question 2

full employment

Answer 2

exists when everyone seeking work is employed at existing wages.
Happens when a sustained period of economic growth occurs

Question 3

difficulties of high employment

Answer 3

labour shortages
increase in wage demands
inflationary pressure
pressure on infrastructure
deterioration of services

Question 4

instruments used to create full employment

Answer 4

1. fiscal policy
   reduce indirect and direct taxes to increase consumer demand to increase demand and employment
2. monetary policy
   reduce the cost of borrowing to reduce the interest rates, encouraging expansion
3. exchange rate policy (ECB)
   devalue the currency to make exports cheaper (ECB)
   4.direct intervention
   increase employment in the public sector
4. prices and income policy
   link wage increases to productivity, encourage wage restraint
   6.economic planning
   identify labour requirements in each sector

Question 5

unemployment

Answer 5

all those seeking work at existing wage rates but unable to find work

Question 6

frictional unemployment

Answer 6

people who are between jobs and looking for work
arises because of changes in particular markets, when people’s preferences or tastes change and thus alter demand for products, with knock on effects and reduced demand for labour
usually short term, as workers need time to find new employment

Question 7

seasonal unemployment

Answer 7

some members of the workforce are in employment for only a certain part of the year, as demand for some labour moves in line with the seasonality of the work
eg picking strawberries in the summer

Question 8

cyclical unemployment

Answer 8

results from reduced demand for goods and services during an economic recession.
due to fluctuations in the business cycle
those who lose their jobs in the downturn should be rehired in the recovery phase

Question 9

structural unemployment

Answer 9

those who become unemployed because their skills are no longer in demand due to technical progress or competition
can occur when an industry goes into decline because of changing demand
often workers have industry specific skills which makes it hard to find new employment

Question 10

institutional unemployment

Answer 10

arises because there are obstacles preventing the mobility of labour
eg lack of housing in a region or refusal of foreign departments to grant work permits

Question 11

causes of unemployment

Answer 11

• recession
• relocation of industry
• Irish companies exporting to UK and US
• a systematic crisis
• uncertainty about the future
• structural unemployment

Question 12

impact of unemployment on the economy

Answer 12

• decrease in consumer demand
• deflation
• hesitancy to invest
• increase in gov. current expenditure on social welfare
• decline in tax receipts
• greater tax burden on the employed
• increase in social problems
• lower demand for wage increases
• reduced demand for imports

Question 13

labour

Answer 13

the human activity directed towards the production of wealth (along with the other factors of production)
its payment is the wage rate

Question 14

labour force

Answer 14

comprised of persons who are either employed or unemployed

Question 15

labour force survey

Answer 15

large scale nationwide survey of households in ireland
designed to produce quarterly labour force estimates that include the official measure of employment and unemployment in the state

Question 16

live register

Answer 16

used to provide a monthly series of the number of people (with some exceptions) registering for Jobseekers Benefit or Jobseekers Allowance or for the various other statutory entitlements at local offices of the Department of Social Protection
not a measure of unemployment

Question 17

strategies for reducing unemployment

Answer 17

-encourage entrepreneurship
assistance and grants from Local Enterprise Office, Enterprise Ireland etc.

-decrease taxation
-sustain a low rate of corporation tax
-subsidise additional labour
employment grands or subsidise wages for employers

-capital investment by gov
infrastructure eg airports, tunnels
-encourage new investment opportunities
-invest in education and training
-encourage consumption of irish goods

Question 18

underemployment

Answer 18

a situation where by a factor of production, though not actually unemployed, is working below capacity
eg a student with a PHD in chemistry is working as a waiter