This document discusses various topics related to unemployment, including:
- Defining and measuring unemployment using methods like the claimant count and labor force survey.
- Different types of unemployment like frictional, structural, cyclical, and real wage unemployment.
- Trends in UK unemployment over time and comparisons to the Eurozone.
- Economic and social costs of unemployment for individuals, businesses, and governments.
- Policies aimed at reducing unemployment through demand-side measures to boost jobs and supply-side reforms to improve labor market flexibility.
This document discusses unemployment in the UK. It defines unemployment and outlines different measures used to calculate it, including the claimant count and Labour Force Survey. It describes various types of unemployment like frictional, structural and cyclical unemployment. It examines unemployment trends over time in the UK and compares it to the Eurozone. The document also discusses costs of unemployment and policies used to reduce it, including demand-side policies to boost jobs and supply-side policies to improve skills.
This document discusses various topics related to unemployment, including:
- Defining and measuring unemployment using methods like the claimant count and labor force survey.
- Different types of unemployment like frictional, structural and cyclical unemployment.
- Consequences of unemployment for individuals, businesses, and the economy as a whole like lower incomes and GDP.
- Policies to reduce unemployment through demand-side measures like tax cuts and supply-side policies like education and training.
- Recent trends showing falling unemployment in the UK due to sustained growth, investment, labor market flexibility and education spending.
The Latvian Economy - 2010 September (pdf)Swedbank
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
This document summarizes recent trends in UK productivity and economic growth. It discusses two periods of productivity growth: the 1980s under Thatcher and more recently with ICT adoption. However, UK productivity has fallen since the 2008 financial crisis while employment has held up, possibly due to labour hoarding. The document reviews literature examining causes of productivity shifts, finding sectors like financial services boosted growth. Ongoing measurement challenges and the outsized public sector downturn complicate understanding recent productivity.
Long run aggregate supply is determined by factors that affect an economy's potential output over the long run, including: labor supply and quality, capital investment, productivity, technology advances, and institutions. An outward shift of the LRAS curve represents an increase in potential output and real economic growth. Productivity, defined as output per hour worked, is the main driver of the UK's potential output growth in the long run according to forecasts.
AS Macro Question - Falling UnemploymentEton College
This is a revision resource for students taking the EdExcel unit 2 economics paper - suggesting a way of approaching the 30 mark question and scoring high marks for evaluation.
AS Macro - Unemployment and the Labour Markettutor2u
Unemployment is one of the major macro-economic
performance indicators. The more unemployed people
in our economy the more we are producing below our
potential, less income is earned (reducing saving,
consumption and tax revenue) and there is a negative
impact on the welfare of society.
This document discusses unemployment in the UK. It defines unemployment and outlines different measures used to calculate it, including the claimant count and Labour Force Survey. It describes various types of unemployment like frictional, structural and cyclical unemployment. It examines unemployment trends over time in the UK and compares it to the Eurozone. The document also discusses costs of unemployment and policies used to reduce it, including demand-side policies to boost jobs and supply-side policies to improve skills.
This document discusses various topics related to unemployment, including:
- Defining and measuring unemployment using methods like the claimant count and labor force survey.
- Different types of unemployment like frictional, structural and cyclical unemployment.
- Consequences of unemployment for individuals, businesses, and the economy as a whole like lower incomes and GDP.
- Policies to reduce unemployment through demand-side measures like tax cuts and supply-side policies like education and training.
- Recent trends showing falling unemployment in the UK due to sustained growth, investment, labor market flexibility and education spending.
The Latvian Economy - 2010 September (pdf)Swedbank
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
This document summarizes recent trends in UK productivity and economic growth. It discusses two periods of productivity growth: the 1980s under Thatcher and more recently with ICT adoption. However, UK productivity has fallen since the 2008 financial crisis while employment has held up, possibly due to labour hoarding. The document reviews literature examining causes of productivity shifts, finding sectors like financial services boosted growth. Ongoing measurement challenges and the outsized public sector downturn complicate understanding recent productivity.
Long run aggregate supply is determined by factors that affect an economy's potential output over the long run, including: labor supply and quality, capital investment, productivity, technology advances, and institutions. An outward shift of the LRAS curve represents an increase in potential output and real economic growth. Productivity, defined as output per hour worked, is the main driver of the UK's potential output growth in the long run according to forecasts.
AS Macro Question - Falling UnemploymentEton College
This is a revision resource for students taking the EdExcel unit 2 economics paper - suggesting a way of approaching the 30 mark question and scoring high marks for evaluation.
AS Macro - Unemployment and the Labour Markettutor2u
Unemployment is one of the major macro-economic
performance indicators. The more unemployed people
in our economy the more we are producing below our
potential, less income is earned (reducing saving,
consumption and tax revenue) and there is a negative
impact on the welfare of society.
Unemployment occurs when able and willing workers cannot find jobs despite actively searching. It means scarce resources are not being used to produce goods and services. Persistently high unemployment has damaging economic and social costs. It is measured using terms like the claimant count and labor force survey. Types of unemployment include seasonal, structural, frictional, and cyclical. Policies aim to stimulate labor demand through macroeconomic stimulus and reducing business costs, as well as labor supply through training, mobility, and work incentives. Youth unemployment and long-term unemployment present ongoing challenges.
The document summarizes key aspects of the Soviet centrally planned economy, including its large scale, institutions, material balance planning process, price system, incentives and shortcomings. It describes the Soviet economy as consisting of over 40,000 state-owned industrial enterprises and farms centrally directed by government ministries to fulfill output plans using input allocations. Prices were set administratively and did not reflect supply and demand, leading to shortages, low quality and misallocation of resources.
The document discusses unemployment and labor market data in the UK. It provides definitions of key terms like unemployment, labor force, and employment rate. It also summarizes recent UK unemployment levels and rates over time, showing a decline. However, barriers remain to lower unemployment further, such as structural unemployment, under-employment, and regional variations. Policies aim to stimulate both labor demand through macroeconomic measures and labor supply through training and incentives, but high long-term unemployment poses challenges.
AS Macro Revision National Income and Standard of Livingtutor2u
This document provides an overview of key concepts related to measuring national income and standards of living, including:
1) National income measures the monetary value of goods and services produced in an economy over a period of time, usually one year. It is used to track economic growth, changes in living standards, and income distribution.
2) Gross domestic product (GDP) is the total value of national output and can be calculated in three ways: expenditure, factor incomes, or value of output. GDP per capita is used to measure standards of living.
3) Other indicators like the Gini coefficient and Human Development Index provide alternatives to GDP per capita by incorporating additional economic, social, and environmental factors.
The document discusses policies to reduce unemployment in three main areas: boosting labor demand, improving labor supply, and addressing structural barriers. It analyzes policies like fiscal stimulus, tax cuts, regional development, and workforce training. It also evaluates the challenges, like long-term unemployment, regional disparities, and weak productivity growth. Reducing unemployment significantly requires stronger economic growth and new industries to generate sufficient jobs.
This is an updated version of a slideshow revision presentation on the way in which different charts are presented in economics exams and some tips for handling the data in your answers.
The document outlines several key macroeconomic policy objectives for the UK including price stability, economic growth, low unemployment, and a balanced current account. It then provides data on the UK economy regarding GDP growth, inflation, employment levels, income inequality, and the economic cycle over recent years. Real GDP growth has averaged around 2% annually but real income per capita remains below pre-recession levels and income inequality has changed little.
AS Macro Revision: Migration and the Economytutor2u
This document provides an overview of labor migration and its economic impacts. It discusses:
1) The scale of global labor migration, with over 200 million international migrants worldwide.
2) The economic benefits of net inward migration, including increased skills, labor supply, productivity, and tax revenues.
3) How labor migration can increase both aggregate demand and long-run aggregate supply using AD-AS analysis.
4) Potential risks and costs of migration like welfare costs, job displacement of domestic workers, and rising housing costs.
5) The challenges of quantifying the overall effects, which depend on migrant skills, job placement, capital investment responses, and dynamic innovation impacts.
The global economy has shifted towards Asia in recent decades. The UK runs large trade deficits in goods but surpluses in services. Germany and China are two of the UK's main trading partners for imports, while exports mainly go to other European nations. A persistent current account deficit can cause problems like lower growth and job losses if it indicates weak competitiveness. Policy options to address deficits include supply-side reforms to improve productivity and demand management policies to reduce spending on imports.
Inflation is a sustained increase in the general price level or cost of living in an economy. It is measured by the annual percentage change in consumer prices using indices like the Consumer Price Index (CPI) in the UK. The Bank of England aims to keep UK inflation at 2% target using interest rate policy. Inflation can be caused by demand-pull factors like excess spending or cost-push factors like rising wages and costs. High inflation can negatively impact economies by reducing the purchasing power of money and increasing inequality.
Supply-side policies aim to improve the long-term productive capacity of an economy by focusing on incentives, productivity, and efficiency. They can involve both market-led policies to reduce regulations and interventionist policies like infrastructure investment. Examples include tax cuts, education and training programs, and regional development initiatives. The goals are to increase GDP growth, wages, and living standards through higher productivity and competitiveness.
This document discusses various types of labour market failures including skills gaps, geographical immobility, economic inactivity, inequality, discrimination, and monopsony power. It provides examples and analysis of each failure using diagrams. Potential policy remedies are outlined for each failure, such as increasing apprenticeships, improving housing affordability, raising the minimum wage, and enhancing workers' rights. The impact of minimum wages on monopsony employers is analyzed using a diagram showing how a minimum wage can increase employment levels and wages by counteracting monopsony power.
This is a suggested answer to an exam-style question (for AS macro) on whether the Bank of England should start to raise interest rates to help sustain the UK economic recovery.
AS Macro Supply Side and CompetitivenessEton College
The document discusses supply-side policies to boost long-term economic growth in the UK. It identifies key supply-side challenges facing the UK economy, including low productivity, regional economic divides, and low investment. It then analyzes three policy options to address these challenges: 1) increasing labor supply through immigration or higher participation rates, 2) improving labor mobility through housing and transport reforms, and 3) boosting innovation and enterprise through tax incentives. Each option is evaluated in terms of potential limitations or political difficulties. The document emphasizes that supply-side reforms require long-term commitments to overcome challenges.
The document discusses supply-side competitiveness and growth in the UK economy. It identifies several key supply-side challenges facing the UK, including a persistent productivity gap, high youth unemployment, low investment and research spending. It also discusses some potential policies to boost long-run supply-side growth, such as improving labour supply and mobility through immigration, investing in skills and training to boost productivity, and improving infrastructure to reduce bottlenecks. The effectiveness of these policies depends on overcoming challenges such as political opposition, significant costs, and long timeframes to see results.
Opportunities to tackle Britain's Labour Market Challengespetem
The document discusses opportunities for job creation in Britain through the growth of the circular economy. It presents three scenarios for the potential expansion of the circular economy by 2030: 1) no new initiatives, 2) a continuation of the current development rate, and 3) a transformative expansion. The quantitative analysis suggests that scenario two could create over 200,000 gross jobs, reduce unemployment by about 54,000, and offset around 7% of the expected decline in skilled jobs by 2022. Scenario three could more than double these impacts, creating around 500,000 gross jobs and reducing unemployment by about 102,000.
1. The economic cycle refers to short-run fluctuations in national output (real GDP) around its long-term trend. It includes periods of boom, slowdown, recession, and recovery.
2. A recession is defined as at least six months of falling output across the economy. It can cause rising unemployment, falling business profits, and declining tax revenues.
3. Estimating the output gap, which is the difference between actual GDP and potential GDP, is difficult but important for understanding inflationary pressures and spare capacity in the economy. A negative output gap indicates unused resources while a positive gap risks inflation.
Causes for the fall of german unemployment and the role of minijobsMichel van Smoorenburg
German unemployment rates declined substantially in the last 10 years. What are the causes? It is not because a very high economic growth or demographic influences, but institutions (Kurzarbeit and Zeitsparkonten) and the reforms/wage moderation which might have been effective.
This document discusses different types of unemployment including frictional, seasonal, structural, cyclical, and natural unemployment. It defines key unemployment terms like the labor force, unemployment rate, and labor force participation rate. The document also examines factors that influence unemployment levels like minimum wages, business cycles, and demographic characteristics. Additionally, it explores the human and economic costs of unemployment.
This is a video recording of a live AS macro revision webinar that looked at some examples of external demand and supply-side shocks that can affect countries such as the UK. In the video I explained six key "shock absorbers" - ways in which a country might be better placed to cope with the impact of world demand, supply and financial shocks to their economic systems.
The document discusses different types and measurements of unemployment. It describes seasonal, frictional, structural, and cyclical unemployment. It also discusses how unemployment is measured using the claimant count and labour force survey. Unemployment trends in the UK since 1990 are presented, showing the impacts of recessions. Policies to reduce unemployment through demand-side and supply-side approaches are outlined.
This video of a live revision webinar for AS macro evaluates supply-side policies designed to improve macroeconomic performance and address structural policy problems. The main focus is on the UK economy.
Unemployment occurs when able and willing workers cannot find jobs despite actively searching. It means scarce resources are not being used to produce goods and services. Persistently high unemployment has damaging economic and social costs. It is measured using terms like the claimant count and labor force survey. Types of unemployment include seasonal, structural, frictional, and cyclical. Policies aim to stimulate labor demand through macroeconomic stimulus and reducing business costs, as well as labor supply through training, mobility, and work incentives. Youth unemployment and long-term unemployment present ongoing challenges.
The document summarizes key aspects of the Soviet centrally planned economy, including its large scale, institutions, material balance planning process, price system, incentives and shortcomings. It describes the Soviet economy as consisting of over 40,000 state-owned industrial enterprises and farms centrally directed by government ministries to fulfill output plans using input allocations. Prices were set administratively and did not reflect supply and demand, leading to shortages, low quality and misallocation of resources.
The document discusses unemployment and labor market data in the UK. It provides definitions of key terms like unemployment, labor force, and employment rate. It also summarizes recent UK unemployment levels and rates over time, showing a decline. However, barriers remain to lower unemployment further, such as structural unemployment, under-employment, and regional variations. Policies aim to stimulate both labor demand through macroeconomic measures and labor supply through training and incentives, but high long-term unemployment poses challenges.
AS Macro Revision National Income and Standard of Livingtutor2u
This document provides an overview of key concepts related to measuring national income and standards of living, including:
1) National income measures the monetary value of goods and services produced in an economy over a period of time, usually one year. It is used to track economic growth, changes in living standards, and income distribution.
2) Gross domestic product (GDP) is the total value of national output and can be calculated in three ways: expenditure, factor incomes, or value of output. GDP per capita is used to measure standards of living.
3) Other indicators like the Gini coefficient and Human Development Index provide alternatives to GDP per capita by incorporating additional economic, social, and environmental factors.
The document discusses policies to reduce unemployment in three main areas: boosting labor demand, improving labor supply, and addressing structural barriers. It analyzes policies like fiscal stimulus, tax cuts, regional development, and workforce training. It also evaluates the challenges, like long-term unemployment, regional disparities, and weak productivity growth. Reducing unemployment significantly requires stronger economic growth and new industries to generate sufficient jobs.
This is an updated version of a slideshow revision presentation on the way in which different charts are presented in economics exams and some tips for handling the data in your answers.
The document outlines several key macroeconomic policy objectives for the UK including price stability, economic growth, low unemployment, and a balanced current account. It then provides data on the UK economy regarding GDP growth, inflation, employment levels, income inequality, and the economic cycle over recent years. Real GDP growth has averaged around 2% annually but real income per capita remains below pre-recession levels and income inequality has changed little.
AS Macro Revision: Migration and the Economytutor2u
This document provides an overview of labor migration and its economic impacts. It discusses:
1) The scale of global labor migration, with over 200 million international migrants worldwide.
2) The economic benefits of net inward migration, including increased skills, labor supply, productivity, and tax revenues.
3) How labor migration can increase both aggregate demand and long-run aggregate supply using AD-AS analysis.
4) Potential risks and costs of migration like welfare costs, job displacement of domestic workers, and rising housing costs.
5) The challenges of quantifying the overall effects, which depend on migrant skills, job placement, capital investment responses, and dynamic innovation impacts.
The global economy has shifted towards Asia in recent decades. The UK runs large trade deficits in goods but surpluses in services. Germany and China are two of the UK's main trading partners for imports, while exports mainly go to other European nations. A persistent current account deficit can cause problems like lower growth and job losses if it indicates weak competitiveness. Policy options to address deficits include supply-side reforms to improve productivity and demand management policies to reduce spending on imports.
Inflation is a sustained increase in the general price level or cost of living in an economy. It is measured by the annual percentage change in consumer prices using indices like the Consumer Price Index (CPI) in the UK. The Bank of England aims to keep UK inflation at 2% target using interest rate policy. Inflation can be caused by demand-pull factors like excess spending or cost-push factors like rising wages and costs. High inflation can negatively impact economies by reducing the purchasing power of money and increasing inequality.
Supply-side policies aim to improve the long-term productive capacity of an economy by focusing on incentives, productivity, and efficiency. They can involve both market-led policies to reduce regulations and interventionist policies like infrastructure investment. Examples include tax cuts, education and training programs, and regional development initiatives. The goals are to increase GDP growth, wages, and living standards through higher productivity and competitiveness.
This document discusses various types of labour market failures including skills gaps, geographical immobility, economic inactivity, inequality, discrimination, and monopsony power. It provides examples and analysis of each failure using diagrams. Potential policy remedies are outlined for each failure, such as increasing apprenticeships, improving housing affordability, raising the minimum wage, and enhancing workers' rights. The impact of minimum wages on monopsony employers is analyzed using a diagram showing how a minimum wage can increase employment levels and wages by counteracting monopsony power.
This is a suggested answer to an exam-style question (for AS macro) on whether the Bank of England should start to raise interest rates to help sustain the UK economic recovery.
AS Macro Supply Side and CompetitivenessEton College
The document discusses supply-side policies to boost long-term economic growth in the UK. It identifies key supply-side challenges facing the UK economy, including low productivity, regional economic divides, and low investment. It then analyzes three policy options to address these challenges: 1) increasing labor supply through immigration or higher participation rates, 2) improving labor mobility through housing and transport reforms, and 3) boosting innovation and enterprise through tax incentives. Each option is evaluated in terms of potential limitations or political difficulties. The document emphasizes that supply-side reforms require long-term commitments to overcome challenges.
The document discusses supply-side competitiveness and growth in the UK economy. It identifies several key supply-side challenges facing the UK, including a persistent productivity gap, high youth unemployment, low investment and research spending. It also discusses some potential policies to boost long-run supply-side growth, such as improving labour supply and mobility through immigration, investing in skills and training to boost productivity, and improving infrastructure to reduce bottlenecks. The effectiveness of these policies depends on overcoming challenges such as political opposition, significant costs, and long timeframes to see results.
Opportunities to tackle Britain's Labour Market Challengespetem
The document discusses opportunities for job creation in Britain through the growth of the circular economy. It presents three scenarios for the potential expansion of the circular economy by 2030: 1) no new initiatives, 2) a continuation of the current development rate, and 3) a transformative expansion. The quantitative analysis suggests that scenario two could create over 200,000 gross jobs, reduce unemployment by about 54,000, and offset around 7% of the expected decline in skilled jobs by 2022. Scenario three could more than double these impacts, creating around 500,000 gross jobs and reducing unemployment by about 102,000.
1. The economic cycle refers to short-run fluctuations in national output (real GDP) around its long-term trend. It includes periods of boom, slowdown, recession, and recovery.
2. A recession is defined as at least six months of falling output across the economy. It can cause rising unemployment, falling business profits, and declining tax revenues.
3. Estimating the output gap, which is the difference between actual GDP and potential GDP, is difficult but important for understanding inflationary pressures and spare capacity in the economy. A negative output gap indicates unused resources while a positive gap risks inflation.
Causes for the fall of german unemployment and the role of minijobsMichel van Smoorenburg
German unemployment rates declined substantially in the last 10 years. What are the causes? It is not because a very high economic growth or demographic influences, but institutions (Kurzarbeit and Zeitsparkonten) and the reforms/wage moderation which might have been effective.
This document discusses different types of unemployment including frictional, seasonal, structural, cyclical, and natural unemployment. It defines key unemployment terms like the labor force, unemployment rate, and labor force participation rate. The document also examines factors that influence unemployment levels like minimum wages, business cycles, and demographic characteristics. Additionally, it explores the human and economic costs of unemployment.
This is a video recording of a live AS macro revision webinar that looked at some examples of external demand and supply-side shocks that can affect countries such as the UK. In the video I explained six key "shock absorbers" - ways in which a country might be better placed to cope with the impact of world demand, supply and financial shocks to their economic systems.
The document discusses different types and measurements of unemployment. It describes seasonal, frictional, structural, and cyclical unemployment. It also discusses how unemployment is measured using the claimant count and labour force survey. Unemployment trends in the UK since 1990 are presented, showing the impacts of recessions. Policies to reduce unemployment through demand-side and supply-side approaches are outlined.
This video of a live revision webinar for AS macro evaluates supply-side policies designed to improve macroeconomic performance and address structural policy problems. The main focus is on the UK economy.
This document discusses unemployment from a macroeconomic theory perspective. It describes reasons for unemployment including frictional unemployment from job search processes and structural unemployment from wage rigidity. Factors contributing to wage rigidity include minimum wages, unions, efficiency wages, and sectoral shifts in industry demands. The document analyzes unemployment trends in the US from 1960-2005, finding that the natural unemployment rate rose in the 1960s-1980s due to minimum wages and unions, before falling in the 1980s-2000s with declining unionization and more stable oil prices. European unemployment is also examined and related to strong labor protections.
Unemployment occurs when able, available and willing workers cannot find jobs despite actively searching. Persistently high unemployment has damaging economic and social costs. In the UK, over 1 in 6 young people and nearly 40% of the long-term unemployed have been out of work for over a year. While UK unemployment has fallen recently, there are limits to how far it can drop without affecting other goals. Unemployment is measured in various ways including surveys and benefit claims.
This document discusses unemployment, including its types, causes, and rates in Pakistan. It begins with an introduction to the topic and overview of seasonal, cyclical, structural, and frictional unemployment. Specific causes of unemployment in Pakistan are then outlined, such as population growth, education issues, and energy crises. The unemployment rate in Pakistan is cited to be around 6%. The document concludes with solutions to reducing unemployment in Pakistan through improved planning, education, skills training, and encouraging investment.
This chapter discusses business cycles, unemployment, and inflation. It covers the phases of the business cycle including peaks, recessions, troughs, and expansions. It also discusses the measurement and types of unemployment, including frictional, structural, and cyclical unemployment. The chapter covers inflation measurement using the Consumer Price Index and types of inflation including demand-pull and cost-push inflation. It discusses the impacts of both unemployment and inflation.
Supply-side policies aim to improve the long-term productive capacity of an economy by focusing on factors like incentives, skills, competition and infrastructure. Recent UK supply-side policies include welfare reforms, tax incentives for R&D and shale gas, and investments in infrastructure and apprenticeships. Higher productivity is key to improving competitiveness and living standards, but the UK has lagged peers in productivity growth in recent years due to underinvestment and other factors.
This document discusses minimum wage and includes perspectives from various stakeholders. It begins with an introduction and overview of minimum wage history. It then outlines views from key stakeholders like government, employers, employees, customers, investors and trade unions. There are suggestions that minimum wage legislation should involve comprehensive discussion, consultation, and consideration of different industries and job categories. The conclusion is that while some oppose minimum wage due to increased costs, most research shows minimum wage benefits workers and the overall economy in the long run without harming growth.
Workers across Britain have a multitude of rights at work – from the minimum wage to maximum hours. But, despite receiving far too little attention, it is labour market enforcement that is essential to turn those rights into a reality.
How effective is Britain’s labour market enforcement regime? What breaches of labour standards are most common? Does Britain have the right infrastructure and resources to enforce the rules? And is the current regime equipped to cope as our labour market changes?
To get to the bottom of these questions, the Resolution Foundation is launching a three-year investigation into labour market enforcement in Britain, supported by Unbound Philanthropy. At an event to mark its launch, the former Director of Labour Market Enforcement David Metcalf (and advisor to the investigation) will offer his take on the state of enforcement in the UK, before other leaders in the field respond and set out priorities for change.
Speakers:
Professor David Metcalf, Former Director of Labour Market Enforcement at BEIS
Jennifer Beckwith, Principal Policy Advisor at the CBI
Tim Butcher, Chief Economist at the Low Pay Commission
Nye Cominetti, Economic Analyst at the Resolution Foundation
Torsten Bell, Chief Executive of the Resolution Foundation
This document summarizes a presentation on employment and social protection in Slovenia given in February 2016. It provides an overview of labor market trends in Slovenia including two major restructuring phases in the 1990s and post-2008. It discusses policies and measures to promote socially responsible restructuring, including active labor market policies, lifelong learning, investments in skills, and support for SMEs. Key labor market regulations and recent reforms are also summarized, along with innovative active labor measures and the European policy context. Lessons learned include the need to avoid early retirement, focus on fast activation, evaluate temporary measures, and better coordinate economic and education policies.
In this comprehensive chapter on unemployment, we embark on an explorative journey into the intricate dynamics of joblessness, aiming to dissect its multifaceted nature and illuminate pathways towards meaningful solutions.
We commence our inquiry by delineating the diverse manifestations of unemployment, discerning between frictional, structural, cyclical, and seasonal unemployment. Each form bears its distinct characteristics and implications, necessitating nuanced approaches for effective intervention.
Delving deeper, we unravel the underlying drivers of unemployment, which encompass a constellation of factors spanning technological innovation, globalization, mismatched skills, and economic fluctuations. Understanding these root causes is pivotal for devising targeted strategies that address the systemic barriers to employment.
Furthermore, we scrutinize the reverberating ripple effects of unemployment across individuals, families, and communities. From financial insecurity and diminished well-being to social disintegration and diminished human capital, the repercussions of joblessness permeate every facet of society, underscoring the urgency of concerted action.
Turning our gaze towards potential remedies, we embark on a quest to unearth pathways towards inclusive prosperity. We advocate for investments in education and skills development, fostering a dynamic workforce equipped to thrive in an ever-evolving labor market. Additionally, we champion the imperative of proactive labor market policies, including job creation initiatives, wage subsidies, and retraining programs tailored to the needs of vulnerable populations.
Moreover, we spotlight the catalytic role of entrepreneurship and innovation in engendering job growth and economic resilience. By cultivating an ecosystem conducive to enterprise, we nurture the seeds of innovation and empower individuals to chart their own pathways to prosperity.
Yet, our quest for solutions extends beyond policy prescriptions to encompass a broader ethos of social solidarity and collective responsibility. We underscore the imperative of forging partnerships across sectors, harnessing the collective ingenuity of government, business, civil society, and academia to forge a more equitable and inclusive future.
In sum, this chapter serves as a testament to the complexities of unemployment and the imperative of collective action. By embracing a holistic approach that addresses the structural roots of joblessness while fostering individual empowerment, we can aspire towards a future where every individual has the opportunity to realize their full potential and contribute meaningfully to society.
Presentation by Ian Mulheirn from Oxford Economics NI at the launch of the NICVA Centre for Economic Empowerment report 'An Economic Analysis of the Living Wage in Northern Ireland' on 9 September 2014. For more information on the report, please visit http://www.nicva.org/resource/economic-analysis-living-wage-northern-ireland
The document discusses the economics of a proposed £7 national minimum wage in the UK. It provides background on low pay in the UK labour market, including median earnings by occupation and the impact of the existing national minimum wage. Both the potential benefits and costs of increasing the minimum wage are considered, such as incentivizing work, reducing the need for benefits, and boosting spending, as well as the risk of higher costs reducing competitiveness. The conclusion is that while a higher minimum wage may have some risks, there is little evidence it would cause unemployment, and the benefits justify increasing it above inflation and benefit levels.
This document discusses labour economics and defines key related concepts. Labour economics examines the relationship between workers and employers, including wages, employment and income. It also looks at labour as a factor of production and the demand and supply of labour. The demand for labour can be direct from firms or derived from consumer demand for goods and services. The supply of labour is affected by economic, social and policy factors. Unemployment rates are an important economic indicator analyzed in labour economics.
This document discusses key concepts in labour economics including:
1) Labour economics examines the relationship between workers and employers and attempts to understand patterns of wages, employment, and income. It considers labour as a factor of production.
2) The demand for labour is derived from the demand for goods and services. Employers demand labour to produce outputs while workers supply their labour services.
3) The labour supply curve shows the quantity of labour workers are willing to supply at different wage rates. Shifts in the labour supply curve are caused by changes in the economy, globalization, taxes, and attitudes towards work.
Seasonal unemployment refers to unemployment caused by seasonal changes in demand, production and employment over the course of the year. It affects industries like farming, tourism, retail, and construction that experience fluctuations in activity and employment levels depending on the time of year. Frictional unemployment is caused by workers transitioning between jobs, such as new graduates entering the labor market or those changing careers. Structural unemployment results from a mismatch between the skills workers have and those required for available jobs, such as due to deindustrialization or technological changes. Cyclical or demand-deficient unemployment occurs during economic downturns when aggregate demand decreases and firms respond by reducing output and laying off workers. It can be shown using an AD-AS model
The document discusses the natural rate of unemployment, which is the average rate of unemployment around which the economy fluctuates. It is affected by factors like the rates of workers losing jobs and unemployed workers finding jobs. There are two main types of unemployment: frictional unemployment due to the time it takes workers to search for jobs, and structural unemployment caused by wages being rigid above market levels due to things like minimum wages and unions. The document analyzes trends in U.S. unemployment over time and potential factors influencing the natural rate, such as demographics, sectoral shifts in the economy, and social policies.
The document discusses measuring GDP and inflation. It defines nominal GDP as the value of goods and services produced during a year valued at that year's prices, while real GDP is valued at the prices of a base year to remove the effects of inflation. The consumer price index is used to measure inflation by tracking the prices of goods in a fixed basket over time. Fiscal and monetary policy can be expansionary to increase growth during recessions or contractionary to decrease inflation during expansions.
Supply-side policies aim to improve the productive potential of an economy through various market-based and state intervention approaches. Market-led policies focus on making markets more competitive through deregulation and tax cuts, while state intervention aims to address market failures. The goals are to increase productivity, investment, skills, and competitiveness. This can generate higher long-run economic growth and living standards. However, supply-side policies face limitations such as long time lags and risks of unintended consequences from government intervention in markets. Evaluating their impact requires considering both supply and demand-side factors.
Supply-side policies aim to improve the productive potential of an economy through various market-led and state intervention approaches. Market-led policies focus on making markets more competitive through deregulation and tax cuts, while state intervention aims to overcome market failures. The objectives of supply-side policies include improving skills, productivity, investment, and competitiveness. Successful supply-side policies could achieve sustained low inflation growth and reduce unemployment. However, the effects of supply-side policies can take a long time to materialize and not all policies effectively pick winners. Evaluating their impact also requires considering demand-side conditions and issues like inequality and sustainability.
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Key Issues
• The meaning of unemployment
• Different types of unemployment
• Consequences of unemployment
• Unemployment and economic growth
• Recent trends in UK unemployment
• Full employment
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Measuring Unemployment
• A Working Definition of Unemployment
– People able, available and willing to find
work and actively seeking work – but
not employed
– The unemployed are included in the
labour force
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Measuring Unemployment
• The Claimant Count Measure
– The number of people claiming the
Jobseekers’ Allowance
– Monthly count of unemployed
– Currently under 950,000 – about 3.0%
of the labour force
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Measuring Unemployment
• The Labour Force Survey (ILO measure)
– An internationally agreed standard measure
of unemployment
– Must have actively sought work in the
previous four weeks and be available to start
work immediately
– Higher figure than the claimant count –
approximately half a million higher
– Higher because there are limits on who can
claim unemployment benefit – so the true
level of unemployment is higher than the
official figures suggest
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Hidden Unemployment
• We may be under-counting the true level of
unemployment
• Unemployment in Britain may be twice as high as official
statistics show. Research on the UK labour market by
economists at HSBC bank takes into account anybody
who is 'economically inactive', but looking for a job, not
just those who are eligible for unemployment benefits
• The report estimates that there are 3.4m Britons who are
unemployed, as opposed to the current estimate of 1.4m
people. Britain's official unemployment rate is 4.8% - one
of the lowest rates of unemployment in the European
Union
• Adapted from newspaper reports, July 2004
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Flows in the Labour Market
Employed
Labour force Unemployed
Out of the
labour forceTaking
a job
Retiring
Temporarily
leaving
New hires
Recalls
Job-losers
Lay-offs
Quits
Re-entrants
New entrants
Discouraged
workers
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Unemployment trends since 1990
All unemployed aged 16-59 (women) / 64 (men), seasonally adjusted, source: Labour Force Survey and Claimant Count
Unemployment Rate for the UK
Labour Force Survey measure Claimant Count measure
Source: EcoWin
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
0
1
2
3
4
5
6
7
8
9
10
11
Labour force survey
Claimant count
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Unemployment since 2000
All unemployed aged 16-59 (women) / 64 (men), seasonally adjusted, source: Labour Force Survey and Claimant Count
Unemployment Rate for the UK
Labour Force Survey measure Claimant Count measure
Source: EcoWin
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
00 01 02 03 04 05
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Labour Force SurveyLabour force survey
Labour Force Survey
Claimant count
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Comparing UK and European
Unemployment
Percentage of the labour force, seasonally adjusted
Euro Zone and UK Unemployment
Euro Zone United Kingdom
Source: EcoWin
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
PERCENT
4
5
6
7
8
9
10
11
Euro Zone average (12 countries)
UK unemployment rate
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Types of Unemployment
• Seasonal
– Regular seasonal changes in
employment / labour demand
– Affects certain industries more than
others
• Catering and leisure
• Construction
• Retailing
• Tourism
• Agriculture
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Types of Unemployment
• Frictional
– Transitional unemployment due to people
moving between jobs: Includes people
experiencing short spells of
unemployment
– Includes new and returning entrants into
the labour market
– Imperfect information about available job
opportunities can lengthen the period of
someone’s job search
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Structural Unemployment
• Structural
– Arises from the mismatch of skills and job
opportunities as the pattern of labour
demand in the economy changes
– Occupational immobility of labour
– Often involves long-term unemployment
– Prevalent in regions where industries go
into long-term decline
– Good examples include industries such
as mining, engineering and textiles
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Textiles - an industry in long term decline
Seasonally adjusted level of output at constant 2000 prices
UK manufacture of textiles, leather and clothing
Source: EcoWin
73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
2002=100
75
100
125
150
175
200
225
250
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Cyclical unemployment
• Cyclical (Keynesian)
– There is a cyclical relationship between demand,
output, employment and unemployment
– Caused by a fall in aggregate demand leading to a
loss of real national output and employment
– A slowdown can lead to businesses laying off
workers because they lack confidence that demand
will recover
– Keynes argued that an economy can become stuck
with a low rate of AD and an economy operating
persistently below its potential
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Cyclical unemployment using AD-AS
General
Price
Level
Real National Income
AD1
SRAS
P1
Y1
LRAS
Yfc
AD2
Y2
P2
Real
Wage
Level
LD2
W1
E2 YFC2E1
Demand
for
Labour
W2
Employment of
Labour
Supply of
Labour
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Real Wage Unemployment
• Real Wage Unemployment
– Created when real wages are maintained
above their market clearing level leading to
an excess supply of labour at the prevailing
wage rate
– Some economists believe that
unemployment can be created if the
national minimum wage is set too high
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Unemployment and Growth in the UK
Real GDP and Claimant Count Unemployment
United Kingdom, Unemployment, Rate, Claimant count, SAReal GDP growth [ar 4 quarters]
Source: EcoWin
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Percent
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
Real GDP growth
Percent
0
2
4
6
8
10
12
Unemployment (%)
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Recent examples of cyclical unemployment
• Recession in the UK in the early 1990s
– Unemployment rose from 1.6 million in 1989
to 2.9 million in 1993
• The recent recession in UK manufacturing
industry
• Slow growth and rising unemployment in
Germany
• The end of full-employment for Japan during the
last ten years
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Economic and Social Costs of
Unemployment
• The private costs for the unemployed
– Loss of income
– Fall in real living standards
– Increased health risks
• Stress
• Reduction in quality of diet
• Social exclusion because of loss of work and income
– Loss of marketable skills (human capital) and
motivation
• The longer the duration of unemployment, the lower
the chances of finding fresh employment - the
unemployed become less attractive to potential
employers
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Consequences of Unemployment (2)
• Economic Consequences for Businesses
– Negative consequences
• Fall in demand for goods and services
• Fall in demand for businesses further down the
supply chain
• Consider the negative multiplier effects from the
closure of a major employer in a town or city
– Some positive consequences
• Bigger pool of surplus labour is available – but still a
problem if there is plenty of structural unemployment
• Less pressure to pay higher wages
• Less risk of industrial / strike action – fear of job
losses – leading to reduced trade union power
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Consequences of Unemployment (3)
• Consequences for the Government (Fiscal Policy)
– Increased spending on unemployment benefits
and other income –related state welfare
payments
– Fall in revenue from income tax and taxes on
consumer spending
– Fall in profits – reduction in revenue from
corporation tax
– May lead to rise in government borrowing (i.e. a
budget deficit)
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Consequences of Unemployment (3)
• Consequences for the economy as a whole
– Lost output (real GDP) from people being out of
work – the economy will be operating well within
its production frontier
– Unemployment seen as an inefficient way of
allocating resources – labour market failure?
– Some of the long-term unemployed may leave
the labour force permanently – fall in potential
GDP
– Increase in the inequality – rise in relative
poverty
26. AS Economics
PowerPoint Briefings 2006PowerPoint Briefings 2006
tutor2ututor2u™™
Policies to reduce unemployment
Demand and supply side approaches
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Demand side Policies to Reduce Unemployment
• These are mainly measures to boost total labour demand
(reduce cyclical unemployment)
– Lower interest rates (a monetary policy stimulus)
– A lower exchange rate (helps exporters)
– Lower direct taxes (fiscal stimulus to spending power)
– Government spending on major capital projects (e.g.
improving the transport infrastructure)
– Employment subsidies (including the New Deal
programme) – designed to reduce the cost to a
business of employing additional workers
– Incentives to encourage flows of foreign investment in
the UK – particularly in areas of above average
unemployment
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Supply-side policies to reduce Unemployment
• Supply-side policies
• These are measures to improve labour supply (reduce
frictional and structural unemployment)
– Increased spending on education & training
including an emphasis on “lifetime-learning”)
– Improved flows of information on job vacancies
– Changes to tax and benefits to improve incentives
– Measures designed to make the labour market
more flexible so that workers have the skills and
education that gives them improved employment
options
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Consequences of falling unemployment
• The circular flow and the multiplier:
– Incomes flowing into households will grow
– Falling unemployment adds to demand and
creates a positive multiplier effect on incomes,
demand and output.
• The balance of payments:
– When incomes and spending are growing, there
is an increase in the demand for imports. Unless
this is matched by a rise in export sales, the trade
balance in goods and services will worsen
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Consequences of falling unemployment
• Government finances:
– With more people in work paying income tax,
national insurance and value added tax, the
government can expect a large rise in tax
revenues and a reduction in social security
benefits
• Inflationary effects
– Falling unemployment can also create a rise in
inflationary pressure – particularly when the
economy moves close to operating at full capacity
– However this is not really a risk when the
economy is coming out of recession, since
aggregate supply is likely to be highly elastic
because of a high level of spare capacity
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Falling unemployment in the UK
• Demand factors
– Sustained economic growth since 1992
– Growth creates jobs to replace jobs lost in industries
suffering from long term decline
– High levels of inward investment from overseas
– Strong consumer demand and housing boom
• Supply factors
– Extra investment in education and training
– Britain now has a more flexible labour market than
in the past – workers have more adaptable skills
– Employment laws have changed – easier for firms
to take on extra workers
• E.g. growth of temporary and part time employment
32. tutor2u™
Falling unemployment
Growth of service
sector has created
many new jobs
Foreign direct
investment
New Deal – helping
to lower long-term
unemployment
Flexible labour
market – easier to
create new jobs
Increased
spending on
education
Sustained
economic growth
since 1992
The UK heads towards full-employment
Editor's Notes
Officially, the unemployed are people who are registered as able, available and willing to work at the going wage rate but who cannot find work despite an active search for work. There is a long-running debate about the accuracy of the unemployment figures in the UK with many economists claiming that the true scale of unemployment is well above the official published statistics.
Officially, the unemployed are people who are registered as able, available and willing to work at the going wage rate but who cannot find work despite an active search for work. There is a long-running debate about the accuracy of the unemployment figures in the UK with many economists claiming that the true scale of unemployment is well above the official published statistics.
Officially, the unemployed are people who are registered as able, available and willing to work at the going wage rate but who cannot find work despite an active search for work. There is a long-running debate about the accuracy of the unemployment figures in the UK with many economists claiming that the true scale of unemployment is well above the official published statistics.
The labour force survey measure of unemployment is higher than the claimant count (usually by about 500,000 people) because the survey includes more people who are actively searching for work (and available to take a job if they find one) but who do not meet the strict criteria for claiming the Job Seeker’s Allowance.
Since the mid-1990s, unemployment in the UK has been below the average for the European Union. High levels of unemployment within the EU are posing serious threats to economic and social cohesion within the economic union. EU countries now have explicit targets for raising employment – but many of the problems appear to be structural in nature and may take several years to resolve.
As one might expect, economists disagree on the main causes of unemployment. Some argue that we need to make a distinction between voluntary and involuntary unemployment. A worker is described as voluntarily unemployed if, at the given level of wages available, he or she does not yet wish to accept a paid job. Involuntary unemployment exists when someone would be prepared to work at the going wage rate, but for one reason or another, they are unable to find work.
When workers calculate that because of lost welfare benefits and extra direct taxes they are no better off working than if they remain outside the employed labour force – thus unemployment can result from the problem of disincentives. Lower income tax rates and benefit reforms might be a solution to this – thereby boosting the supply of labour available to work in the economy
When there is a recession we see a rising level of unemployment because of plant closures, business failures and the inevitable increase in worker lay-offs and permanent redundancies. This is due to a fall in demand leading to a contraction in output across many industries. A downturn in demand is often the stimulus for businesses to rationalise their operations by cutting employment in order to control costs and restore some of their lost profitability.
During the last UK recession (1990-1992) employment fell from nearly 28.8 million to just under 27 million. And the unemployment rate measured by the Claimant Count jumped from 5.6% in 1990 to 9.7% in 1993. The deeper is the downturn, the higher the scale of cyclical unemployment
A growing economy creates jobs for people entering the labour market for the first time. And, it provides employment opportunities for people unemployed and looking for work. In the last two recessions (1980-81 and 1990-92), the number of people in work fell sharply. But a period of sustained economic growth since 1993 has led to a significant increase in employment. Only certain types of unemployment are affected by changes in actual GDP (e.g. cyclical unemployment) Frictional unemployment is unaffected and structural unemployment is unlikely to decline even if there is an expansion of national output.
Persistent unemployment in the economy can be taken as a sign of a failure of the labour market to allocate labour resources efficiently. Long-term unemployment damages individuals because they lose their self-respect and employers lose interest in them. Employers do not consider the long-term unemployed to be probable candidates for vacancies. It is therefore possible to have a large number of vacancies coexisting with high unemployment if many of the jobless have been out of work for a long time.
The costs of unemployment include lost output (output within PPF) lost government revenue and increased expenditure on benefits. Unemployment has important social costs eg unequal income and diminished social cohesion; loss of status, alienation and frustration. The effects of unemployment will depend on its rate and duration – long term unemployment can be very costly and difficult to reduce
Demand side approaches focus on raising the aggregate demand for goods and services. Because labour as a factor input has a derived demand, if production and investment is increasing, so too there should be a rise in the demand for new workers. The multiplier effects of an initial boost to aggregate demand may cause a higher final increase in equilibrium national income.
Because the economy will always be subject to cyclical fluctuations, it is impossible to keep unemployment at very low levels on a permanent basis. In a dynamic economy there will always be industries where output and employment rising, providing new employment opportunities, but also sectors in decline where employment is falling. The labour market needs to be flexible enough to match people out of work with the skills required by newly created jobs. These supply-side policies seek to provide the economy with sufficient labour market flexibility
Unemployment adds to the flow of factor incomes for households and this has a direct effect on the circular flow of income and spending in the economy