Unemployment & Employment

• What is the working population?

  The total number of individuals of working age
• Who is included in the working population?

  Both employed and unemployed individuals
• What defines the labour force?

  Those employed or actively seeking employment
• How does the labour force relate to the working population?

  It is a subset of the working population
• What does economic inactivity refer to?

  Not being engaged in the labour force
• Who are considered economically inactive individuals?

  Pensioners, students, homemakers, discouraged workers
• What is the labour force participation rate?

  Workers in the labour force compared to the working population
• What does the employment rate measure?

  The proportion of working age people in employment
• What types of employment are included in the employment rate?

  Employees, self-employed, full-time, part-time
• How do the labour force and employment rate relate to economic activity?

  Both indicate levels of engagement in work
• Unemployed

  Someone of working age, williang able to work and activley seeking work but cannot find a job.
• Unemployment rate

  The percentage of the labour force that are unemployed
• Measures of unemployment

  Labour Force Survey - this survey asks 60-70,000 UK households to selfclassify as being employed, unemployed or economically inactive.

  Claimant Count - this counts the total number of recipients of Job Seeker's Allowance (JSA) added to those looking for work to claim Universal Credit (UC).
• What does regional unemployment refer to?

  Unemployment rate varies across regions
• How is long term unemployment defined?

  People unemployed for over 12 months
• What constitutes mass unemployment?

  1 in 10 of the labour force are unemployed
• What is youth unemployment?

  Unemployment rate for 16 to 24 year-olds
• Who are considered discouraged workers?

  Inactive work-seekers who stopped seeking work
• What is hidden unemployment?

  People not counted in reports due to inactivity
• What does underemployment mean?

  Employment insufficient in hours, skills, or income
• What are the different types of unemployment mentioned?

  • Regional unemployment
  • Long term unemployment
  • Mass unemployment
  • Youth unemployment
  • Discouraged workers
  • Hidden unemployment
  • Underemployment
• How do discouraged workers differ from hidden unemployment?

  • Discouraged workers: stopped seeking work
  • Hidden unemployment: not counted in reports
• What are the implications of underemployment?

  • Insufficient hours worked
  • Poor skill utilization
  • Inadequate income to meet needs
• Frictional Unemployment

  short-term unemployment caused by people moving between jobs, moving to a new location, or re-entering the workforce after a break.
• Cyclical Unemployment

  the unemployment rate rises during an economic downturn; it is caused by fluctuations in the business cycle. Sometimes called demand deficient unemployment
• Structural Unemployment

  Structural unemployment: caused by changes in the economy, like the decline of certain industries or the rise of automation. It happens when there's a mismatch between the skills & location of workers and the needs of employers. A lack of geographical and occupational mobility of labour contributes.
• Seasonal Unemployment

  seasonal workers, such as construction workers, retail assistants, might be without paid jobs due to the time of year when there is less need for their work
• Real Wage unemployment

  caused by wages being too high relative to the productivity of workers; minimum wages and trade union activity can push the wage above its market equilibrium
• Costs of Unemployment

  Economic costs - loss of output foregone, fall in real incomes, lower standard of living, lower tax revenue, higher welfare costs, larger budget deficit, loss of workers to other countries (emigration) etc.

  Social costs - increase in poverty and welfare dependency, increase in physical and mental health increasing healthcare costs, link between persistent unemployment and social problems (eg vandalism, low level crime, shoplifting etc.)
• Benefits of Some unemployment

  Reduced risk of inflation – lower wage demands & price discounts • Pool of unemployed available for growing businesses • Increase in self-employment start-ups, more entrepreneurs/innovation