Y11 Macroeconomics Topic 3 Unemployment Flashcards
Definition of Unemployment?
People who are not working who want a job but cannot find work
How do you measure Unemployment?
Labour Force Survey organised by the International labour Organisation
Over 100,00 people in 40,000 households are surveyed every month.
Problems with ILO survey?
International Comparisons are different because the way that unemployment is measured varied widely between countries
Advantages of Labour Force Survey?
More People will admit to employment than claim benefits
Advantages of Claimant Count?
Broad Measure
Easy and Quick to Measure
Disadvantages of Labour Force Survey?
Only once every 3 months
Disadvantages of Claimant Count?
Some can’t claim benefits (they have savings or a partner who earns money)
Some people won’t claim it (pride/ego)
What is Claimant Count?
A way of measuring Unemployment
This is calculated using the number of UK workers claiming the Job seekers allowance
Always lower because people under 18 or over 65 can’t claim it
What types of Unemployment are there?
Cyclical Unemployment Seasonal Unemployment Fricitional Unemployment Structural Unemployment Sectorial Unemployment Technological Unemployment Regional Unemployment Voluntary Unemployment
What is Cyclical Unemployment?
When Unemployment is caused by a recession
Falling demand for goods and services –> fall in derived demand for labour
What is the solution to cyclical unemployment?
Government can increase spending pushing the AD back outwards
What is Seasonal unemployment?
Demand for some professions will fluctuate according to the time of the year –> Unemployment during seasons where demand is low
Solutions to Seasonal Unemploment?
Training Programmes so people can find work in the down season
What is Frictional Unemployment?
When People are short term unemployed when moving between jobs or leaving education
Solution to Fricitional unemployment?
Job centres and Websites which can provide information about jobs to unemployed
What is Structural Unemployment?
Mismatch between the skill of workers and industry demands
What are the three main types of Structural Unemployment?
Sectoral- When the economy moves from one sector to the next and some workers don’t have the skill for the new sectors
Technological Unemployment- New Technologies make Labour Redundant
Regional Unemployment - The industry a certain region is dependent on goes into deadline, leaving very high levels of local unemployment
What is Geographical Immobillity?
Barriers restricting workers from moving to a different of work (Transport Costs)
What is Occupational Immobillity?
Barriers restricting workers from changing profession (lack of skill due to lack of education)
Solutions to Occupational Immboillity?
Get training
Solutions to reduce Geographical immobillity?
Buy a car –> Reduces time taken to get there
Buy a house –> Ties someone to one location
What is Voluntary Unemployment?
Unwilling to work at the current wage rate
Unwilling to retrain
Unable to work because of Geographical and Occupational Immobillity
Solutions to voluntary Unemployment?
Raise Minimum Wage and lower job seekers allowance –> Encourages people to go to work
Retraining Schemes –> Give them loans to go to school
Only give people benefits who are applying for jobs
or using the free trading schemes
Impacts of Uenmployment?
Lower Output Wasteful Use of Scarce Resources Increased Poverty Increased Government Spending on benefits Decreased Tax Revenue Consumer Confidence falls Business Confidence falls Worsened Society
