Labour market

What is crucial in determining how an economy is performing?

Health of an economies market

In recessions what happens to the amount of unemployed people?

The number of unemployed people can rise

In good times what happens to the labour market?

Become ‘tight’ with a high proportion of the population in working and this can put upward pressure on wages

Key components of Labour Market

-Those in employment

-Those seeking for work but not in work classified as unemployed

-Those who are neither in work or actively seeking work-Economically active

How are you classified as employed?

If you have at least one job that employs you for more than 1hr per week so can be in part time or full time where you can be self employed or work in company

How are you classified as unemployed

If you are not in work, are actively seeking work, and could start work within 2 weeks

Two measures of unemployment

-ILO definition from the labour force survey

-Claimant Count

What is inactivity rate?

Group who are not in employed category or unemployed category

Reasons why some people might not fall in category for unemployed or employed

In full-time education, Disability or illness and Caring responsibilities

Two major surveys that collect information in the labour market?

Labour force survey and annual population survey

What does the annual survey of Hourly earnings collect information on?

Wages

What are powerful ways to show what is going on in a labour market?

Construct graphs and charts which show how the labour market is tracking

Categories of unemployment

-The natural rate of unemployment

-The cyclical rate of unemployment

What is the natural rate of unemployment?

The normal rate of unemployment around which the unemployment rate fluctuates

Two types of natural rates of unemployment

Structural and frictional unemployment

What is the cyclical rate of unemployment

Year to year fluctuations in unemployment around its natural rate.