Employment and unemployment

• What is the employment rate?

  The number of people in work as a percentage of the working age population
• What is the labour force?

  The working age population who are either employed or unemployed
• What is underemployment?

  A measure of the total number of people who are either seeking additional work or are working in low skill jobs because they cannot get jobs that use their skills
• What are the two main benefits of an increase in the employment rate?

  Increased GDP as output in the economy would increase, and increased income leading to better living conditions
• What are the two main benefits of a decrease in the unemployment rate?

  Falling government spending on out of work benefits, and increased employment which provides a boost for the economy
• What does the economically inactive population mean?

  Those temporarily without a job, but who are not classed as unemployed
• What are the two main impacts of an increase in inactivity rate?

  The productive capacity of the country will decrease, and there may be more claims on state benefits
• What is cyclical unemployment?

  Unemployment caused by lack of spending in the economy during a recession
• What is structural unemployment?

  Unemployment where industries are in decline and workers' skills are becoming obsolate
• What is frictional unemployment?

  Temporary unemployment when people are transitioning between jobs
• What is seasonal unemployment?

  Unemployment for some periods of the year
• What is the main benefit of having a skilled workforce?

  Increased productivity to help increase the country's rate of economic growth
• What are the two main effects of unemployment on consumers?

  There will be a decrease in living standards, and lower consumer spending due to loss of confidence
• What are the two main effects of unemployment on firms?

  It becomes easier to hire new employees, and less consumer spending will result in lower profits for the firm
• What are the two main effects of unemployment on workers?

  There will be a loss of skills as they may not have up to date training, and also a loss of income overall
• What are the two main effects of unemployment on the government?

  They will have to spend more on benefits, and there will be less revenue from taxes
• What are the two main reasons why people migrate to another country?

  For employment opportunities, and to earn a higher income
• How can immigration increase employment?

  Immigrants can fill job vaccancies that otherwise might not be taken up
• How can immigration decrease employment?

  Immigrants can displace other people from work, and there will be an increase in competition for jobs
• How can immigration increase the government's wealth?

  If immigrants find work, they will have to pay taxes