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macro
unemployment
types of unemployment
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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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