Unemployment

• What is meant by unemployment?

  People seeking jobs but without one
• What does the Labour Force include?

  All those who are economically active
• What is the unemployment level?

  The number of unemployed individuals
• What was the UK unemployment level at the end of November 2024?

  1.568 million
• What is the unemployment rate?

  Percentage of Labour Force that is unemployed
• How is the unemployment rate calculated?

  Unemployment Level x 100 / Labour Force
• What was the UK unemployment rate at the end of November 2024?

  4.4%
• Why is the unemployment rate useful?

  It allows comparison across time and countries
• What is meant by employment?

  People in the Labour Force who have jobs
• How is employment measured?

  By number of people in employment and jobs
• What is the macroeconomic policy objective of full employment?

  All factors of production are fully utilized
• What types of unemployment exist at full employment?

  Frictional and seasonal unemployment
• How is full employment illustrated?

  Using the vertical LRAS curve
• What are the positive effects of full employment?

  • Rising confidence
  • Increased capital investment
  • Rising income
  • Rising living standards
  • Higher consumer demand
• What are the negative effects of full employment?

  • Shortages of skilled workers
  • Rising inflation
• What causes cyclical unemployment?

  Fluctuations in the economic cycle
• When does cyclical unemployment occur?

  During a negative output gap (recession)
• What is frictional unemployment?

  Short-term unemployment between jobs
• What are the types of frictional unemployment?

  Search, casual, career moves, geographic
• What is seasonal unemployment?

  Unemployment influenced by the time of year
• In which industries is seasonal unemployment common?

  Leisure, tourism, and farming
• How does the government adjust unemployment figures?

  By seasonally adjusting them for accuracy
• What is structural unemployment?

  Long-term unemployment due to economic changes
• What do workers facing structural unemployment need to do?

  Match old skills with new jobs or retrain
• What has replaced primary and secondary sector jobs in the UK?

  Tertiary sector jobs
• What is technological unemployment?

  Labour replaced by automation and IT
• What is regional unemployment?

  Unemployment linked to industry closures in areas
• What is international unemployment?

  Jobs moved overseas for lower wages
• What are the consequences of unemployment for the government?

  Lower output and tax revenue, higher spending
• What are the consequences of unemployment for businesses?

  Lower demand, productivity, and employee motivation
• What are the consequences of unemployment for individuals?

  Lower standard of living and income
• What is the Claimant Count measure of unemployment?

  Number of people receiving Jobseeker's allowance
• What is an advantage of the Claimant Count measure?

  Quick and cheap to calculate
• What is a disadvantage of the Claimant Count measure?

  Excludes under 18s and over 60s
• What is the Labour Force Survey measure of unemployment?

  Quarterly survey of 60,000 households
• What does the Labour Force Survey test?

  International Labour Organisation definition of unemployment
• What is an advantage of the Labour Force Survey?

  More accurate, includes those not eligible for JSA
• What is a disadvantage of the Labour Force Survey?

  Expensive and time-consuming to collect
• What are the differences between the Labour Force Survey and Claimant Count measures?

  • Accuracy: Labour Force Survey is more accurate
  • Cost: Claimant Count is cheaper
  • Speed: Claimant Count is quicker
  • International comparison: Labour Force Survey is recognized
• What difficulties exist in measuring unemployment accurately?

  Variability in definitions and data collection methods