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8 Cards in this Set
- Front
- Back
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What is unemployment |
Unemployment is people of working age who are without work and actively seeking employment. |
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What is the Labour force |
The economically active population |
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How is unemployment measured |
By calculating the number of people who are claiming unemployment benefits. |
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What are the problems with this method of measuring unemployment |
The existence of hidden unemployment. This includes: »People who have been out of work for a long period of time and have given up searching for work. »People who are working part time but would like to work full time. »People who are working in jobs that they are greatly overqualified for. |
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What are the different reasons for unemployment |
🔘Frictional Unemployment ~This is short term and is caused by people being between jobs or who have just left education.
🔘Seasonal Unemployment ~This caused by seasonal changes. For example, ski instructors are mainly required during winter so in summer they may be unemployed
🔘Structural Unemployment ~This is caused by a change in the structure of the economy. Often occurs when the demand for a particular type of labour permanently decreases E.g. coal mining. ~Can also be caused by technological changes, geographical immobilities which can lead to occupational unemployment.
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How does unemployment effect the individual |
In short term can result in decreased income assuming they receive unemployment benefits. Decreased income results in lower standards of living. In long term can result in decreasing skill set making them more unemployable. This can lead to higher levels of stress, mental health issues and suicide. |
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How does unemployment effect firms |
Can increase the supply of labour, potentially lowering wages. However, high training costs may occur to train people who have been out of work for a long time. |
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How does unemployment effect the government |
Can cause total output to decrease. Government spending increases due to paying unemployment benefits. Also the amount of money received in tax revenues decreases. |
