Unemployment
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Notas de aula
Measuring unemployment
- In the UK survey framework, unemployed people are without work, have actively searched in the past four weeks and can start within two weeks, or meet the qualifying arranged-job-start condition. Students and retirement-age labels do not alone determine status. Employment, unemployment and inactivity depend on the relevant criteria.
- Labour force means employed plus unemployed people, not everyone available or the whole population. The Claimant Count is an administrative measure of specified benefit claims: some unemployed people do not claim and some claimants can be employed. Survey estimates have sampling and other uncertainty; the two measures are not interchangeable.
Different measures, different populations
Types
- Frictional unemployment concerns job search and matching; structural concerns mismatches between workers’ skills, occupations or locations and available jobs. Cyclical or demand-deficient unemployment follows weak aggregate demand. Seasonal changes can affect employment where activity varies predictably.
- Technology is a possible structural-change mechanism, not proof of permanent net job destruction. Several types can coexist. A particular person must still meet the statistical criteria to be counted unemployed; losing a job does not automatically establish their later status.
Explain the mechanism
Causes
- Demand weakness can reduce vacancies, while industry change, technology or trade can displace workers whose skills or locations do not match other jobs. Occupational barriers include training and registration; geographical barriers include housing, travel and caring commitments. New jobs can arise in other activities.
- A simplified competitive wage-floor model can create excess labour supply, but actual employment responses depend on employer power, productivity, hours, prices and other adjustments. Do not use the model as a universal empirical prediction for every minimum-wage change.
Trace displacement and adjustment
Costs
- Lost income can reduce consumption and living standards, depending on savings, transfers and household resources. Long periods without suitable work can reduce skills, opportunities or connections. These are possible effects rather than uniform experiences or a judgement about people without work.
- Government may receive less tax and spend more on eligible benefits; firms may lose sales as demand weakens, and output can remain below potential. Not every unemployed person claims benefits or receives the same support. Explain mechanisms without claiming unemployment inevitably causes crime or any particular behaviour.
Explain unemployment costs
Policies
- Demand support through fiscal or monetary channels can help demand-deficient unemployment when spending and vacancies are weak. Skills, matching information, relevant apprenticeships and feasible mobility support can address specific structural or frictional barriers. Policies may use fiscal instruments for supply-side aims.
- Effectiveness depends on the actual constraint, access, suitable jobs, time, capacity, funding and job quality. Training without demand does not guarantee employment; stronger demand without relevant skills may leave mismatches. Compare mechanisms and trade-offs rather than treating one tool as a universal cure.
Match policy to the constraint
Full employment
- Full employment does not generally require measured unemployment to be zero. Frictional search and structural mismatches may remain when demand-deficient unemployment is absent in the relevant model. It does not mean every inactive person should work or every job is suitable.
- The natural-rate model includes frictional and structural components rather than frictional alone. Its value can change with institutions and matching and is uncertain, not a directly observed constant. This is extension context beyond the lesson’s core measurement and type distinctions.
Full employment is not necessarily zero
Worked rate and inactivity example
- Fictional population aged 16+: 900 employed + 100 unemployed + 300 inactive = 1,300. Labour force is 1,000. Unemployment rate = 100 divided by 1,000 × 100 = 10%, not 100/1,300 or 100/900.
- If 20 unemployed people stop searching and become inactive with no qualifying arranged start, employment stays 900, unemployment becomes 80, inactivity 320 and labour force 980. The rate becomes about 8.16%. It falls without employment rising, so assess levels and participation as well as the rate.
Fictional labour-force calculation
People, jobs and underemployment
- A person meeting the employment definition is employed even if they would like more hours. Underemployment describes additional unused work potential under a specified measure, rather than automatically classifying that person as unemployed. One person can hold several jobs while counting once in an employment-person total.
- Students can be employed, unemployed or inactive according to work, search and availability. Some inactive people want work but do not meet the active-search or availability requirements. Neither the unemployment rate nor the benefit count alone captures all barriers or unused labour potential.
Classify the stated person
Slides
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Questões de prática
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1.What is unemployment?
Easy- Abeing without work and meeting the relevant search/availability or arranged-start rules
- Bhaving paid employment in the reference period
- Cnot seeking work and not available, with no arranged-start exception
- Dbeing a student regardless of employment or search
2.What is the unemployment rate?
Easy- Athe number of jobs
- Bwages
- Ctax
- Dpercentage of the labour force that is unemployed
3.What is frictional unemployment?
Easy- Alack of demand
- Bseasonal work
- Cpeople between jobs
- Dthe decline of an industry
4.What is structural unemployment?
Easy- Aseasonal
- Bcaused by long-term industry decline or skills mismatch
- Cbetween jobs
- Drecession
5.What is cyclical unemployment?
Easy- Acaused by low demand in a recession
- Bbetween jobs
- Cindustry decline
- Dseasonal
6.What is seasonal unemployment?
Easy- Abetween jobs
- Bindustry decline
- Crecession
- Dcaused by seasonal changes in demand
7.What is technological unemployment?
Easy- Arecession
- Bseasonal
- Ccaused by machines replacing workers
- Dbetween jobs
8.Which stated scenario most clearly illustrates a seasonal unemployment channel?
Easy- Aa person chooses not to seek work and is unavailable
- Ba seaside tourist operation closes during its off-season
- Ca worker starts a permanent year-round hospital job
- Da worker remains employed throughout the reference period
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