Unemployment (measures (pros+cons)) Flashcards
Define unemployment
out of work but actively seeking work
Define unemployment level
the number of people over the age of 16 that are without work, available for work and seeking work
Define under-employment
highly skilled in low pay and skill job and part-time workers that would prefer to be full-time
Define claimant count unemployment
number of people who are receiving JSA, National Insurance credits or Universal Credit benefits principally for the reason of being unemployed
Define unemployment rate
– the proportion of economically active (employed and unemployed) that are unemployed so those engaging in the labour market = 3% (good for comparing across time and countries due to populations)
Define ILO unemployment
official measure in the UK, survey of person circumstances and activity in labour market, in 3 month period around 40k households 80k people in the UK are surveyed. Must be out of work for 4 weeks, able to start work within two weeks and available to work through the week (taken from the Labour force survey)
Define Job Seeker’s Allowance
form of unemployment benefit paid by the UK Government to people who are unemployed and actively seeking work
Pros and cons of Claimant Count
Pros: includes everybody, not a sample, cheaper and quicker to collect the information, more details collected
Cons: Not all countries do it whereas ILO is all countries, influenced by strict eligibility of JSA
Pro and cons of ILO Count
Pro: most countries use it so can compare
Cons: only a sample, expensive and time consuming
To what extent does underemployment distort employment figures
Makes it look lower than it is as when working minimal hours classed as unemployed however still working
To what extent does increasing immigration to the UK influence employment
55% of net jobs growth is accounted for by EU nationals
Government regulations implemented to stop young people on benefits
compulsory work scheme - earn or learn
jobless 18-21 year olds spend 3 weeks in intensive job training or lose benefits
Impact of unemployment on firms
easier employment conditions - lower production costs, lower wage demand thus lower wages and higher profits
falling demand - less consumer spending less profit
Impact of unemployment on consumers
lower prices as low demand
more inferior goods less normal goods as less incomes
fall in consumer confidence and job security
Impact of unemployment on economy
falling skill levels and decrease in AS leading to cost push inflation
opportunity cost of lower output as less employed resources (PPF point of full employment on curve unemployment point below curve showing opportunity cost)
