Unemployment (Pack 5)

• How is unemployment calculated?

  • Unemployment rate = (Unemployed / Labor force) × 100
• How do unemployment, inactivity, and underemployment differ?

  Unemployment is actively seeking work, inactivity is not seeking work, underemployment is working below skill level
• What are the two main methods of measuring unemployment?

  1. Labor Force Survey (LFS)

  • Benefit: Comprehensive data
  • Drawback: Time-consuming

  1. Claimant Count

  • Benefit: Quick and easy
  • Drawback: May underreport actual unemployment
• What are the five types of unemployment?

  1. Frictional unemployment
  2. Structural unemployment
  3. Cyclical unemployment
  4. Seasonal unemployment
  5. Real wage unemployment
• What are solutions to three types of unemployment?

  • Frictional: Job placement services
  • Structural: Retraining programs
  • Cyclical: Economic stimulus measures
• What are the impacts of unemployment on firms?

  Pros:

  • Lower wage costs

  Cons:

  • Reduced productivity and morale
• What are the impacts of unemployment on workers?

  Pros:

  • More time for personal projects

  Cons:

  • Financial stress and loss of skills
• What are the impacts of unemployment on consumers?

  Pros:

  • Lower prices due to reduced demand

  Cons:

  • Decreased purchasing power and spending
• What are the impacts of unemployment on the government?

  Pros:

  • Potential for lower inflation rates

  Cons:

  • Increased welfare costs and reduced tax revenue
• What is the state of youth unemployment in the UK and Spain?

  • Higher rates compared to older workers
  • Young people face barriers like lack of experience
  • Concern due to long-term economic implications
• Why are young people more likely to be unemployed than older workers?

  Young people often lack experience and skills
• Why is youth unemployment a particular concern?

  It can lead to long-term economic disadvantages