Wednesday, 08 April 2015 08:17

Unemployment - Video

Unemployment is a measure of the number of people who are willing, able and actively seeking work at the going wage rate but cannot find it. Typically it is measured by the Labour Force Survey which seeks to establish whether people have been looking for work recently and whether they can start work soon. Sometimes the government uses the Claimant Count, which simply measures the number of people claiming unemployment benefit. This produces a much lower number which could mislead people into thinking that a far greater proportion of the population are working, however it does reflect the number of unemployed people that the tax payer is supporting.

There are a number of different types of unemployment such as frictional - those in between jobs, cyclical - because of a lack of aggregate demand due to the economic cycle and structural - due to a skills mismatch when workers do not have the skills required by an ever changing economy. Each of these types has a different solution. Frictional unemployment is best reduced by improving information on job vacancies, cyclical by improving aggregate demand and structural by offering retraining programs.

The key to most exam questions on inflation is to establish and explain which cause(s) of unemployment are relevant to the specific context of the question and then explain which problems and solutions are most relevant and why. The sources will give you hits and clues so use them wisely.

The revision video below will give you a brief overview of the unemployment topic and cover all the major concepts you need for AS and A2 Economics exams such as measurements, causes, problems and solutions.

Published in The National Economy