Unemployment + Employment

Question 1

Level of Employment vs. Employment Rate

Answer 1

• Level of Employment = number of people in work
• Employment rate - number of people in work as % of working age pop.

Question 2

2 Measures of Unemployment

Answer 2

• Claimant Count
  –> based on claims of unemployment benefits e.g. Jobseeker’s Allowance or Universal Credit

International Labour Organisation (ILO)’s survey
–> Survey of sample households, methods are standard meaning can be used internationally for comparison

Question 3

What is unemployment rate + Labour force

Answer 3

Unemployment rate = n. unemployed as % of Labour Force

Labour Force is the economically active, those between 16-65
–> Unemployed + employed population

Question 4

What is Underemployment

Answer 4

people in part-time work seeking additional (full time) work, and those who’s skills are under utilised.

Question 5

What would be the benefits of increased employment?

Answer 5

+ Increased GDP –> output in economy increase
+ Increase Revenues + Profits for firms
+ Increase Incomes –> Increase Standard of Living
+ Improved Skills
+ Higher Gov revenue –> from taxation, more people pay tax, less people on benefits + people spend more

• People out of job market for long time become increasingly unemployable
• Job Market less flexible –> Fewer workers for Firms to choose from

Question 6

Define Economically inactive + e.g’s

Answer 6

Those without a job not classed as unemployed
–> e.g. full-time education, parents looking after children, retired early, too sick to work.

Question 7

5 Types of Unemployment

Answer 7

• Cyclical –> lack of spending e.g. recession means people out of work
• Structural –> industries in decline, workers skills obsolete (Labour immobility)
• Frictional –> people between jobs
• Seasonal –> people works some periods of year e.g. ski instructors in summer or surf instructor in winter
• Classical –> problems with supply-side of Labour e.g. min wage too high

Question 8

Migration Definition?

Answer 8

Balance between Immigration (into country) and Emigration (out )

Question 9

Immigration Vs. Emigration

Answer 9

Immigration = into country
Emigration = out country

Question 10

List some (5) reasons for Migration

Answer 10

• Employment
• Higher Income
• Quality of life
• Escape conflict
• Avoid high taxation

Question 11

What is the significance of Migration on Employment + Economy?

Answer 11

Depends on reason for migration

• Migrants come to fill job vaccines –> Employment ↑
• Migrants don’t find work or displace workers –> Unemployment ↑

–> Migrants find work tax revenues ↑
–> Migrants send remittances –> Negative effect on Balance of Payments (In SR)

Question 12

What are the benefits of highly skilled workers to an economy?

Answer 12

• More productive –> ↑Rate of Economy Growth
• Higher Earnings
• Less likely to be unemployed
• Employment secure + Stable
• Income Inequality + poverty lower

Question 13

What are 4 effects of Unemployment on Consumers?

Answer 13

• ↓Standard of living
• ↓Confidence –> ↓Consumer Spending
• Mental illness if unemployed for long time
• ↓House prices –> ↓ Personal Wealth

Question 14

What are 3 effects of Unemployment on Firms?

Answer 14

• Easier to recruit employees
• ↓Consumer Spending –> Profits, Revenues, Sales ↓
• Surplus labour –> Wages ↓ –> Costs ↓

Question 15

What are 4 effects of Unemployment on Workers?

Answer 15

• Skill↓ –> no up to date training
• Income↓ –> Welfare less than Employment wages
• ↓Standard of Living –> due to ↓Income
• Long-term unemployment –> harder to find jobs in future

Question 16

What are 4 effects of Unemployment on Gov + Society?

Answer 16

• ↑Spending on Welfare e.g. Universal Credit
• ↓Revenue from Income + Indirect taxes
• Opportunity Cost –> from gods that could have been produced by Unemployed workers
• Inequality ↑ –> ↑Crime