Employment and unemployment
Measuring unemployment
- Unemployment = people who can and want to work but can't find a job.
- the claimant count — counts those claiming unemployment benefit (misses non-claimants).
- the labour force survey — counts those not working but looking and ready to start.
- the labour force = everyone working plus the unemployed who are looking.
Practice
The claimant count measures unemployment by counting people who:
The claimant count uses benefit claims; the labour force survey asks a sample who are seeking work.
Types & effects
- frictional — short-term, between jobs.
- structural — an industry shrinks; skills no longer wanted.
- cyclical — caused by low demand in a recession.
- Effects: lost income and skills, lost output, more benefits + less tax, higher crime/ill-health.
Practice
Unemployment caused by low demand in a recession is:
Cyclical (demand-deficient) unemployment rises in a recession; frictional is between jobs.
Practice
When an industry shrinks and workers' skills are no longer wanted, this is:
Structural unemployment comes from a mismatch between workers' skills and the jobs available.
You've got it
Key idea
- measure with the claimant count vs the labour force survey
- types: frictional (between jobs), structural (skills mismatch), cyclical (recession)
- unemployment costs income, output, and government money