UNEMPLOYMENT TOPIC SHEET QUESTIONS

Question 1

What does in employment mean?

Answer 1

people over 16 who are either working for firms and organisations or self employed who did more than 1 hour of paid work a week.

Question 2

What is the level of unemployment?

Answer 2

The total number of people who are unemployed.

Question 3

What is the rate of unemployment?
1- how do you work it out?
2- what does It show?

Answer 3

1- unemployed divided by active labour force.
(unemployed/ active labour force)

2- it shows the unemployed population as a percentage
of the economically active population.

Question 4

What is meant as the labour force/ workforce?

What is the formula for active labour force?

Answer 4

People who are economically active either employed or unemployed.
Active labour force = Employed+ unemployed.

Question 5

What is meant by economically inactive?

Answer 5

People not in employment who have not sought employment in the last 4 weeks and are not available to work in the next 2 weeks.

Question 6

What is meant by discouraged workers?

Answer 6

People who have been unable to find employment and are no longer looking to find work.

Question 7

Define structural unemployment.

Answer 7

Unemployment due to the decline of an industry. Eg industry moving jobs abroad.

Question 8

Define cyclical unemployment?

Answer 8

Unemployment due a downturn in the economy.

In the phase of a recession.

Question 9

What is meant by frictional unemployment?

Answer 9

Unemployment caused by the time it takes to find a new job once a job has been lost. (time between losing a job and finding a new one)

Question 10

What is youth unemployment?

Answer 10

People between the ages of 16-24 who are unemployed.

Question 11

Why is youth unemployment undesirable?

Answer 11

Because if they are unemployed at (16-24) they are likely to become discouraged workers which will lead them to not getting employed which can decrease growth in the economy.

Question 12

What is Voluntary unemployment?

Answer 12

When an individual chooses not to take a job at the current wage.

Question 13

What is involuntary unemployment?

Answer 13

When someone is willing to find a job at the current wage but cannot find a job.

Question 14

What is the participation rate?

Answer 14

The ratio of economically active people as a proportion of all the people of a working age.

Question 15

What is the dependency rate?

Answer 15

The ratio of people not working as a proportion of the population.

Question 16

What is underemployment?

Answer 16

When an individual is working part-time when they want to work full time.
Or when they are working in a profession that is less skilled than what they are capable of.

Question 17

What is meant by seasonal unemployment?

Answer 17

When people are unemployed at certain points in the year due to their being less/ no demand. (hotels in winter)

Question 18

What is the claimant count?
how is it calculated?
What are the stipulations?

Answer 18

measures the number of people claiming job seekers allowance (JSA). They have to prove they are looking for work.
The number of people claiming job seekers allowance is added up.
Must be available and looking for full time work over 18 and under 65.

Question 19

1-what is the ILO unemployment rate?

2-How is it measured?

Answer 19

International labour organisation unemployment rate.
The international standard for comparing unemployment.

2- Monthly labour force questionnaire assesses people’s working habits.
ILO unemployment is for individuals who have sought after work in the last 4 weeks and are available to work in the next two weeks.

Question 20

What are the advantages and disadvantages of the claimant count as a comparison of unemployment?

Answer 20

Advantages-
it is an accurate measure and shows how much the unemployed are costing the government.

Disadvantages- takes into account those who are getting benefits but are not seeking work. Does not take into account those who do not claim benefits but are seeking work.

Only takes into account 18-65

Question 21

What are the advantages of ILO unemployment rate compared to CC?

Answer 21

Advantages- can allow for international standard of living comparisons across countries.
ILO takes into account more people than claimant count. ILO is over 16 and claimant count is over 18.
ILO takes into account those who are looking for part time work, compared to claimant count that is full time only.

Question 22

What 4 impacts can immigration have on unemployment.

Answer 22

1-Can decrease the wage rate
2- increase unemployment
3- increase productivity
4- increase voluntary unemployment

Question 23

What is the impact of unemployment on consumers

Answer 23

Consumers wages will fall so they will will have lower income so will purchase less, welfare then falls.

Question 24

What is the impact of unemployment on firms?

Answer 24

They will sell fewer products this will reduce investment

and may lead to further redundancies.

Question 25

What is the impact of unemployment on workers?

Answer 25

• Workers will have less confidence in the security of their position.
• If workers are unemployed for long periods of time they may begin to lose skills.

Question 26

What is the impact of unemployment on the government?

Answer 26

They will accrue less income tax from workers, whilst having to spend more on (job seekers allowance)

Question 27

What is the impact of unemployment on society?

Answer 27

Can lead to depression, ill health, social unrest and crime.

Question 28

What are the advantages of inward migration?

Answer 28

Can increase productive potential of an economy leading to economic growth, can increase competitiveness internationally and improve the balance of payments.

Question 29

What are the disadvantages of inward migration? (2)

Answer 29

Immigrants may not be economically active so do not contribute to output whilst putting pressure on the NHS.

When there is not a skill gap it replace domestic workers and lower wages.

Question 30

How can ILO be better than claimant count?

Answer 30

ILO is 16+ compared to CC that is 16-65

If people are unemployed but not claiming benefits they will not be counted in claimant count.

Some people are looking for part time work so included in ILO but not in claimant count.

Question 31

What is job seekers allowance?

Answer 31

A payment to those who are willing to work but cannot secure a job.

Question 32

What is meant by unemployed?

Answer 32

Those over 16 who have sought after a job in the last 4 weeks and are available to start work in the next two weeks who are currently not in a job.

Question 33

What are the limitations of the claimant count?

Answer 33

Unemployed may not always claim claimant count.
Those with partners on high income cannot claim claimant count.
Instances where people are employed and claim claimant count.
Generally underestimates level of unemployment.

Question 34

What is the impact of unemployment on consumers?

Answer 34

Less disposable income so standard of living may fall.

Can lead to health problems like depression and obesity.

Question 35

What is the impact of unemployment on firms?

Answer 35

Larger labour force to choose from so wages will be lower so production costs decrease.

Consumers may have lower disposable income so are less likely to spend so revenue may decrease.

Question 36

What is the impact of unemployment on government?

Answer 36

Government will make less receipts from income tax and have to pay more through job seeker allowance.

Question 37

What is the impact of unemployment on workers and society?

Answer 37

Workers- their skills may degrade over time and lead to hytersisis.

Society increased crime and vandalism.

Question 38

What is real wage inflexibility?

Answer 38

Wages above the market equilibrium may cause unemployment. Classical economists argue that by letting wages fall to the equilibrium level, there would be no unemployment.

Question 39

What is the impact of migration on unemployment?

Answer 39

Supply of labour increases as most migrants are of working age and looking for a job.

Migrants could bring high skillset to labour force which could increase productivity.

Could cause domestic workers to be displaced in low wage industries.