types of unemployment

    Cards (18)

    • types of unemployment
      frictional
      structural
      regional
      sectoral
      technological
      seasonal
      cyclical
      real wage
      hidden
    • frictional unemployment
      transitional unemployment due to people moving between jobs
    • how to reduce levels of frictional unemployment
      government need to improve quality and speed of job information.
      also look to alter tax and benefit system so people are more incentivised to work
    • structural unemployment
      long run decline in demand in an industry leading to a reduction in employment
      when demand for labour is less than the supply of labour in a labour market
    • why is structural unemployment a problem?
      long run problem which is not easily solved, therefore these people drain money from the government
    • regional unemployment
      where certain areas of the country suffer from very high levels of unemployment, due to concentration of an industry in a particular area
    • sectoral unemployment
      where on sector suffers a dramatic fall in employment
    • technological unemployment
      improvement in technology means that jobs are replaced
    • seasonal unemployment
      some employment is seasonal in demand and workers may only be needed at certain times of the year
    • cyclical unemployment
      involuntary unemployment due to a lack of demand for goods and services
    • what happens to cyclical unemployment when there is a recession?
      real national output contracts leading to an increase in productive capacity. firms then cut workers and cyclical unemployment rises
    • when is cyclical unemployment most likely to occur?
      when there is a negative output gap
    • negative output gap
      when the actual level of GDP is below the trend or planned level of GDP
    • real wage unemployment
      result of real wages being above their market clearing level leading to excess supply of labour
    • real wage diagram

      Q3 - Q2 = level of unemployment at this newly imposed wage
    • hidden unemployment
      many have become discouraged and have stopped actively searching for work
    • economic and social costs of unemployment
      loss of income
      loss of national output
      fiscal costs
    • underemployment
      people are working fewer hours than they wish and people working in jobs that don't utilise their skills
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