Unemployment

What students need to learn: 

• definition of unemployment 

• measurement of unemployment using International Labour Organization (ILO) measure 

• types of unemployment: cyclical, structural, seasonal, voluntary ,frictional. 

• impact of unemployment on: output,  use of scarce resources, poverty, government spending on benefits, tax revenue, consumer confidence, business confidence, society (social costs of unemployment). 

Measuring Unemployment:

Read your books and make notes on the International Labour Organisation's Measurement of Unemployment. Why might this be different from the "Claimant Count" which simply measures the number of people claiming unemployment benefit?

Key Terms:

People of working age: Everyone between say 16-60 or 65. 

The Labour Force: Those people of working age who are in work or without a job but actively seeking work. So those of working age, such as students, housewives, people who have retired early, and the severely disabled are not included as they are not looking to work they are referred to as “economically inactive”.

The Labour force participation rate: Labour force/people of working age. So the greater the numbers “economically inactive the lower the “participation rates”

Unemployment: Those without work, who are actively seeking work (see the ILO survey). Sometimes measured by those claiming unemployment benefit (but not always)

Extension reading: Patterns of Employment:

The structure of employment in an economy may change over time in a number of ways. For example "participation rates" may change. By this we mean that fewer or more people of working age may be available to work. Participation rates of women have changed over the last 100 years as more and more women have wanted to work, rather than be "stay at home mothers". Also child care facilities have improved which enable more women to enter the labour force. However in some countries it is still not normal for women to work. More women in the workforce has also meant that part-time work is becoming more common, as this allows women to balance child care with work

Equally in recent decades more young people are going onto higher education and this will reduce participation rates. 

As people are living longer, people are often working to an older age. This will increase participation rates.

The structure of employment may also change over time due to economic growth. As countries and their citizens get richer their spending patterns change. Can you remember how? What implications does this have for the structure of economies and the structure of employment?

Technology also changes the patterns of employment. More people work from home. Technology destroys jobs but it can also create jobs. 

More people now are working on temporary contacts than ever before. All the teachers in international schools are on 2-3 year temporary contracts.

Summative Task: Textbook case study on Unemployment in Greece