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14 Cards in this Set
- Front
- Back
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Unemployment (definition) |
Those people who are willing and able to work and are actively seeking work but don't currently have a job |
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Labour force (definition) |
All those people aged 16 years and over but not yet retired who are either employed or unemployed (excludes those unable/unwilling to work and full time students) |
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Participation rate (definition) |
The proportion of the working age pop who are in the labour force An improvement in economic activity does not necessarily mean a lower unemployment rate (more people looking for jobs because increased confidence) |
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Discouraged job seekers |
Those who have been unemployed for a long time and stop looking for work >> leave participation rate |
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Limitations of unemployment rate |
Underemployment is not considered (less hours than preferred) >> wasted resources Movement of discouraged jobseekers out of the labour force means that these people are not included in the unemployment rate Those who decide to study as they cannot currently find work >> understated u/e rate Unemployed means worked less than 1 hour in previous week >> arbitrary definition Survey made by ABS may not be accurate >> overestimate |
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Types of unemployment |
Frictional, seasonal, structural, long-term, cyclical |
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Frictional unemployment |
Unemployment due to people experiencing changing economic circumstances |
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Seasonal unemployment |
Unemployment due to industries experiencing seasonal downturns |
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Structural unemployment |
Unemployment due to changes in the structure of the economy |
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Long-term unemployment |
When someone has been technically unemployed for longer than 12 months |
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Cyclical unemployment |
Unemployment that occurs as a result of falling levels of economic activity. As aggregate demand falls, profit-maximising firms revise production plans downwards and lay off workers. |
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Natural rate of unemployment |
The level of unemployment that is consistent with zero cyclical unemployment (the only unemployment present in the economy is due to natural causes) |
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Negative economic consequences of unemployment |
Decreased confidence Not maximising output Decreased standard of living Decreased disposable income Decrease in economic activity |
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Private costs of unemployment |
Increased rates of mental illness Increase relationship breakdowns Social stigma Increased crime rates Increased government spending Increased physical illness Increased drug/alcohol abuse |
