Unemployment
Introduced| English | Meaning |
|---|---|
| unemployed/ʌnemˈplɔɪd/ | Without paid work, available to work and actively seeking work under the usual labour-force definition. |
| unemployment rate/ʌnemˈplɔɪmənt reɪt/ | The percentage of the labour force that is unemployed under the measure being used. |
| labour force/ˈleɪbə fɔːs/ | The people who are employed or are unemployed and actively seeking and available for work, under the definition used. |
| claimant count/ˈkleɪmənt kaʊnt/ | The number of people claiming specified unemployment-related benefits, used as one indicator of unemployment. |
| frictional/ˈfrɪkʃənl/ | Describing unemployment that occurs while people search for jobs or move between jobs. |
| structural/ˈstrʌktʃərəl/ | Describing economic effects caused by underlying features or changes in the organisation of production and labour markets. |
| cyclical/ˈsaɪklɪkl/ | Related to recurring expansions and contractions in economic activity. |
| aggregate demand/ˈæɡrɪɡeɪt dɪˈmænd/ | Total planned spending on an economy's goods and services at different general price levels. |
The cost of idle hands
- Behind every percentage point of unemployment are real people — and lost output the economy never gets back.
- Measuring it, and knowing why it happens, is essential to fixing it.
There are 2.5 million unemployed in a labour force of 50 million. What is the unemployment rate (%)?
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(2.5 / 50) × 100 = 5%.
The labour force is the number of people employed plus the number unemployed (and seeking work).
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Labour force = employed + actively-seeking unemployed; the rate divides unemployed by this.
Measuring unemployment
- The unemployed 失业者 are those without a job but actively seeking one.
- Unemployment rate 失业率 = unemployed ÷ labour force 劳动力 × 100 (the labour force = employed + unemployed).
- Two measures: the claimant count 申领救济人数 (those on benefits) and the ILO/Labour Force Survey (a wider survey).
Worked example. 2.5m unemployed in a labour force of 50m. Rate = (2.5 ÷ 50) × 100 = 5%.
Three types of unemployment: frictional, structural and cyclical
Unemployment in the labour market
If the wage is stuck ABOVE the equilibrium, more workers want jobs than firms will hire — that gap is unemployment.
Unemployment caused by a fall in aggregate demand in a recession is called:
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Cyclical unemployment rises and falls with the economic cycle / AD.
Match each type of unemployment to its cause.
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Frictional = job search; structural = mismatch; cyclical = AD-driven.
Types of unemployment
- Frictional 摩擦性: between jobs (short-term, normal).
- Structural 结构性: skills/industry mismatch (e.g. coal mining declines).
- Cyclical 周期性 (demand-deficient): caused by a fall in AD during a recession.
A fall in aggregate ______ during a recession raises cyclical unemployment.
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Lower AD → less output → fewer workers needed.
The AD link
- A fall in aggregate demand 总需求 lowers output, so firms need fewer workers → cyclical unemployment rises.
A fall in AD reduces equilibrium output (Y), so firms employ fewer workers — cyclical unemployment.
You've got it
- unemployment rate = unemployed ÷ labour force × 100
- types: frictional (between jobs), structural (skills mismatch), cyclical (AD-driven)
- a fall in AD raises cyclical unemployment