Unemployment flashcards
Definition of Unemployment
Those that are able and willing to work but unable to find a job
What are measures of Unemployment?
Labor Force Survey which is a survey given by the ILO used in the EU and is carried out monthly.
What are the types of unemployment
Cyclical
Structural
Sectorial
Technological
Regional
Seasonal
Voluntary
Frictional
What are the impacts of unemployment on a country’s output
A country faces reduced output because of the economy failing to use the labour force. It’s often seen as a waste of resources due to inefficient allocation of resources.
What are the impacts of unemployment on scarce resources
people who are unemployed don’t contribute to production and hence can be seen as a waste of resources. With full employment comes higher output and higher incomes
What are the impacts of unemployment on poverty
Being unemployed means there is no other source of income resulting in poverty. This is commonly seen in underveloped countries
What are the impacts of unemployment on gov spending on benefits
When people are unemployed, governemnts are responsible for distributing income to the unemployed in the form of unemployment benefits as a part of mandatory gov expenditure.
This can be seen as an opportunity cost as the money could have been allocated towards improvement of public goods & services
What are the impacts of unemployment on tax revenue
With unemployment rising, gov will have reduced tax revenue because people will be less willing to spend due to the lowered disposable income.
This is often one of the casues towards a fiscal deficit resulting in the gov having to borrow more in order to distribute welfare benefits to a larger scale of people in the country.
What are the impacts of unemployment on consumer confidence
With unemployment risng, consumers tend to cling onto their money more and would rather save in case of uncertainity that they may be laid off.
This reduces aggregate demand which slows down rates of economic growth
What are the impacts of unemployment on business confidence
With unemployment rising, as we know aggregate demand falls which leads to reduced research and development for businesses as well as reduced innovation resulting in reduce in international competition hence, damaging the current account
What are the impacts of unemployment on society
With unemployment rising, it can have an impact on sectorial unemployment and regional unemoloyment which damages a concentrated area of people.
It’s said that unemployment damages mental well being making the unemployed more stressed hence, damaging social life and relationships resulting in a general decrease in wellbeing
