Employment

• What is the employment rate?

  Number in work divided by working age population
• How is the unemployment rate defined?

  Proportion of working age seeking work without a job
• What is voluntary unemployment?

  Choosing not to accept a job at the wage rate
• What characterizes involuntary unemployment?

  Wanting a job but unable to find one
• Who are considered economically inactive?

  Working age not in work or seeking work
• What does full employment mean?

  All willing and able economically active have jobs
• What is occupational immobility?

  Inability to move between different job industries
• What is geographical immobility?

  Inability to move jobs across different areas
• What does the Labour Force Survey (LFS) measure?

  Percentage of workforce actively seeking jobs
• What is a disadvantage of the LFS?

  Estimates may not be wholly accurate
• What is the claimant count?

  Measure of unemployment based on benefit claims
• What is an advantage of the claimant count?

  Conducted cheaply using existing government records
• What is a disadvantage of the claimant count?

  Excludes non-claimants and distorts comparisons
• What is frictional unemployment?

  Unemployment associated with job searching
• What is cyclical unemployment?

  Unemployment arising from economic cycles
• What is demand-deficient unemployment?

  Unemployment due to lack of aggregate demand
• What is seasonal unemployment?

  Unemployment occurring during specific seasons
• What is structural unemployment?

  Unemployment from skill-job mismatches
• What are the costs of unemployment?

  • Lost output
  • Lower living standards
  • Drop in tax revenues
  • Higher welfare costs
  • Potential for overseas migration
  • Increase in relative poverty
  • Extra demands on NHS
  • Social problems
  • Labour scarring and hysteresis effects
• What are the benefits of unemployment?

  • Increases pool of potential workers
  • Keeps wages and salaries down
  • Individuals can benefit from job changes
  • Incentive to gain or retain skills
  • Rise in self-employment start-ups
• What are the effects of full employment?

  • Maximizes potential output of the economy
  • Could lead to demand-pull or cost-push inflation
  • May reduce inequality
  • Decreased crime and social conflicts
  • Increased consumer and business confidence
  • Improvement of government budget position
  • Potential for underemployment
• Who are discouraged workers?

  Individuals who have given up looking for work
• What is the labour market participation rate?

  Proportion of working age population economically active
• What is an advantage of the LFS?

  Can be used for international comparisons