<4.7 EMPLOYMENT & UNEMPLOYMENT> 

• RISING AGE OF POPULATION: As healthcare improves life expectancy has grown however birth rates have fallen meaning the limited supply of labour has resulted in the average age of workers rising.

• CHANGING SOCIAL ATTITUDES: In particular those towards the role of women in society. With more and more women having access to better education and healthcare they are now joining the labour force.

• MOVE TOWARDS MARKET ECONOMIES: The majority of economies are already mixed with much larger private sectors than public ones, and as this trend continues along with more and more 'privatisation' employment within the public sector will decline, 

• LABOUR FORCE = Those members of the WORKING AGE POP. (All members of the population aged 16-65) who are either EMPLOYED or without work but who are actively looking for work. (The UNEMPLOYED)

Turn each of these sentences into factors that lead to an INCREASE in the size of the LABOUR FORCE:

• RISE/FALL in retirement age.

• RISE/FALL fall in school leaving age.

• RISE/FALL in net immigration.

• RISE/FALL in birth rate (some years before).

• RISE/FALL fall in death rate.

• RISE/FALL in tertiary education uptake

• RISE/FALL in  of women working.

UNEMPLOYMENT RATE (%) = UNEMPLOYED POP) / [(EMPLOYED POP + UNEMPLOYED POP)] X 100

• This measures the % of the working age population that are either working or actively seeking work.

LABOUR FORCE PARTICIPATION RATE = LABOUR FORCE / WORKING AGE POPULATION  x 100%

• FRICTIONAL UNEMPLOYMENT: Occurs when people are ‘BETWEEN JIOBS’, in the state of changing jobs or looking for their FIRST JOB after leaving full-time education.​

• SEASONAL UNEMPLOYMENT: Occurs when people who ONLY WORK seasonal jobs are IN THE OFF-SEASON., for example, life-guards in the winter and ski-instructors during the summertime.

• STRUCTURAL UNEMPLOYMENT: Occurs when AN ENTIRE INDUSTRY RELOCATES or becomes OBSOLETE, and domestic workers' skillsets are no longer needed.​

• TECH UNEMPLOYMENT: Occurs when capital replaces labour e.g., ATMs, touchscreens in fast-food outlets.​

• YOUTH UNEMPLOYMENT: Under 21s, have less skills so are always first to lose jobs during recessions.​

• REGIONAL UNEMPLOYMENT: Occurs because certain remote areas have less employment opportunities.​

• VOLUNTARY UNEMPLOYMENT: Occurs when workers choose not to work as taxes are high/generous welfare.​

• CYCLICAL UNEMPLOYMENT: Occurs when AD falls and less demand for goods means less demand for workers.

• REAL WAGE UNEMPLOYMENT: Occurs when the gov’t fixes the min-wage above the equilibrium wage leading to a fall in the quantity demanded of labour leading to a surplus of labour.

• THE UNEMPLOYED: Unemployed people often suffer from stress, anxiety, low self-esteem etc..​

• FAMILY & FRIENDS: Low incomes often lead to arguments, family breakdowns etc…​

• LOCAL COMMUNITY: Poverty, homelessness, more crime will drive down property prices.​

• FIRMS: Higher levels of unemployment, means lower incomes, and less spending. This will lead to less consumer demand and may force some companies to shut down, and make more workers unemployed.

• THE GOVERNMENT: More unemployed means the government will have to pay more welfare payments as well as receive less income tax, which will lead to budgetary problems, and may force the government to borrow money and increase their debt commitment.

• TAXPAYERS: They may have to pay more tax to make up for the shortfall from the unemployed. and to cover the increased welfare payments needed.

• THE ECONOMY: Less workers means less output which lowers the amount of GDP and economic growth. 

• EXPANSIONARY FISCAL POLICY: More Gov’t spending & Lower taxes, should increase spending which in turn will boost AD and the demand for labour.​

• EXPANSIONARY MONETARY POLICY: Lower interest rates should encourage borrowing by firms, which not only increases spending but creates job opportunities.​

• SUPPLY-SIDE POLICES: Investments in education and training to get the structurally unemployed back to work. Reduced trade union power, so wages will be flexible to reduce ‘real-wage unemployment’. Employment incentives such as subsidies can be offered to firms to hire the unemployed. Welfare benefits can be lowered to incentivize the voluntary unemployed back to work.

• PROTECTIONIST POLICIES: These policies such as tariffs, and quotas on imports should increase demand for cheaper domestic goods thus boosting demand for domestic workers.

2-MARK-QUESTIONS:-

Identify two causes of an increase in the size of a country’s labour force.

Identify two costs of unemployment. 

Identify two problems that prevent a worker finding employment.

4-MARK-QUESTIONS:-

Explain two reasons why an increase in unemployment may reduce tax revenue.

Explain why there may be some people unemployed whilst there are job vacancies.

Explain two costs of long-term unemployment to those who are unemployed.

6-MARK-QUESTIONS:-

Analyse why the pattern of employment in a country may change over time.    

Analyse two reasons why unemployment may increase.

Analyse how an increase in investment may affect unemployment.

Analyse the causes of unemployment.

Analyse the effects of an increase in unemployment on inflation.

8-MARK-QUESTIONS:-

Discuss whether a government should aim for an unemployment rate as low as 0.5%.  

Discuss whether unemployment always harms an economy.

Discuss whether an increase in a country’s labour force will increase income per head.

Discuss whether workers who lose their jobs are likely to still be unemployed a year later. 

Discuss whether government policy measures can reduce unemployment.

Discuss the economic arguments for and against a government raising the school-leaving age.