unemplyment Flashcards
unemployment def
to be counted as unepmployed, must be of wokring age and willing and able to work but unable to find a job despite seeking work
measures by
labpuyr force survey: asks households to self classify as as being unemployed or econimcally inactive
claimant count: counts total number of reciptents of job seekers allownace added to those looking for wokr to calim universal credit
rates
1983 high unemplymnetb rate for 11% for 4 years
marck 2011 big jump since low unemploynet
long term unemplyment
ppl who hve been unemplyed for 12 months or more
eg cysclical/ strcrutrual after a recession
longer somoen is unemplyed teh harder it is to get a job
employers favour ppl who have a consistent record of being in work as ppls skills worsen due to economic inactivity
supply side policy problem
mass unemploymnet
where a large % of labour force is unavle to find work
eg hyper inflation and natural distaers
1/10 unemployed
true level of uneomluemnt may be higehr tha this
hidden unemploymnet
measure of ppl who are neither looking for job or wokring due to circumnstaces outside of their control but are able to work
eg students carers parents due to disbailitys or ilnesses
follows a rise in economic inactivity esp since start of covid panademic
also accounts for those who are self employed and zero hour contracts and agency work
may of those who are long term unemployed give up seeking for a job
seasonal
might be without paid jobs due to time of year when there are seasoanl changes in ad production and emplymnet but then let go after holidays
eg farming tourism hsopitality and constructiojn
frictional
in between jobs and and seeking a better job affets ppl who are on short term contracts cant eridaciate it in its entirety
eg school leacers short term contracts and mothers seeking jobs after being inactive
cyclical
involuntary unemploymnet due to cahnges lack of ad for g/s
caused by business cycle
ad deacreses so production decreases workers are then layed off and tehreofre has a negative multiplier effect
real wage
unepmloyemnt caused by wages being too high in realtion to production of workers
occurs when labour supply exceeds labour demand or when there si a surplus of wokers in a particular industry
if real wages would decrease then uenmplyment would disapper as people are willing to work for less
structural
caused by a lack of suitable skills for jobs available result of deindustraliastion
happens because of barriers to finding work eg unaffordable housing high cost of childcare and expensive transport
disnincetive effects from tax and welfare system
voluntary
indv choses not to work despite having suitable job oppurtunities availavle to them
reasons: taking a break to pursue education raising cldren and early retirement
involuntary
actively seeking but unable to find woek or tempoarailry aid off
reasojs: redundancy recession, compnay closures, lack of jaobs available
wage ridgidity
happens when workers are reuctant to see their real wagws fall during econ downturn
demand side policys to tackle unemployment
stimualtes ad and leads to econ growth
fiscal stimulus:m gov increase public spendng and cut taxes which stimualtes ad growth which can stimulate econ growth and employkennt
multiplier effect: gov spending creates more jobs, more incomes earnt and respent into econ creating econ growth and stimulating growth
moentary policy:
cebtral banks lower intrest rates which can enciurage bsuinesses and consumners to spend more and invest more boosting ad and employmnet , primary goal is to keep inflation low and stable
depriciating curenncy / exchange rate: lower ir may lead to curennecy depriciation which can lift exportt sales porfit and jobs
weaker exh rate means imports become more expdnsive for domestic consumers leading to more demand for domestic producys this is known as exanditure switching
supply side policy
tax cuts: lowering taxs on businesses can increase profits and investments leading to more hiring and increased productivity . decreasong tax burden of firms will increase margins to hire. tax cuts increase the oppurtunity costs of remaining unemployed it also increases suplly, alos increases the incetive to work as it leads to more disposable income
deregulations: removing uneccasaary regulations can reduce costs for bhsinesses and encurage innocvations and inbvestment and utimatly create new jobs also stimuatkes stronger work incebtives removes barriers to entry makimg it more easiee for firms to enter
labour marjer reform: makes it easier to hire and fire workers reduces structuirl unemplymnet
edu / training: can increase skills of work force increase productivity and improve occupational imbobillitu
