unemployment

employment definition

employment refers to a situation where people of working age have jobs and are engaged in productive activities for which they receive payment

unemployment

unemployment occurs when people who are able and willing to work and are actively seeking employment cannot find a job. it represents a waste of human resources and an indicator of a country’s economic performance.

labor force

labor force consists of all individuals of working age who are either employed or actively seeking work.

dependent population

part of population that isn’t in the labor force therefore depends ont he working population for support

labor force participation rate

labor force participation rate measures the proportion/percentage of the working age population that is either in work or looking for work and therefore able to produce goods and services. the global rate has been falling due to more young people in education and more older people retiring.

why is there growth of part-time?

linked to increase in female labor participation and the growth of the service/retail sectors where flexible hours are common. This allows for better work-life balance

measurement of unemployment

claimant counts, labor force surveys, unemployment rate formula

claimant counts

counting number of people officially registered as unemployed and claiming socila benefits

labor force surveys

periodic surveys of households to gather information on employment status.

unemployment rate formula

unemployment rate = number unemployed / labor force x 100

different causes and types of unemployment

frictional unemployment, structural unemployment, seasonal unemployment, cyclical unemployment, technological unemployment

frictional unemployment + examples

occurs when people are temporarily between jobs or entering the labor force for the first time. it is short-term and usually temporary and considered healthy. graduates, workers switching from one company to another.

structural unemployment + examples

caused by a mismatch between workers, skills and the requirement of available jobs often due to technological change or shifts in the economy. factory workers losing jobs due to automation or offshoring.

seasonal unemployment

occurs when jobs are only available during certain seasons of the year. tourism workers

cyclical unemployment + example

caused by a fall in aggregate demand during an economic recession. Stocks of unsold products would accumulate so firms would cut their production and workers become unemployed. Factory worker who loses their job during a recession when falling consumer demand leads to reduced production.

technological unemployment + examples

structural employment caused by the automation and technological advances that replaces human labor. automation causing displacement for human workers.

personal costs of unemployment

loss of income, unable to meet financial obligations, loss of skills, loss of self esteem, susceptible to mental/physical issues, family strain

costs to the economy from unemployment

economy produces fewer goods and services that could result in lower total output and income.

fiscal costs definition

expenses incurred by the government when implementing policies or providing public goods and services. Financed through taxes

fiscal cost consequences from unemployment

less tax revenue, higher government spending