Duration: 30 mins
Secondary level
Lesson notes
Economics
Employment and unemployment
Lesson Overview
In this unit, you will learn about employment.
Learning objectives
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Define employment, unemployment and full employment.
Explain changing patterns and level of employment
Measure unemployment
Explain causes/types of unemployment
Discuss the consequences of unemployment
Keywords
EXPLAIN
Employment refers to the use of factors of production in the economy such as labour.
Unemployment occurs when people of working age are both willing and able to work but cannot find employment.
Full employment means that everyone in a country who is willing and able to work has a job.
Changing employment patterns
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Employment sector
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Delayed entry to the workforce
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Ageing population
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Formal sector employment
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Female participation rates
Measuring unemployment
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Claimant count
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Labour force survey
Types of Unemployment
Cyclical Unemployment: occurs during recession due to falling consumer demand & incomes
o Firms reduce output & lay off workers
Structural Unemployment: caused by changes in industrial structure of an economy
o Entire industries close due to a permanent fall in demand for their goods/services
Frictional Unemployment: refers to short-lived unemployment; e.g. moving to different job
Seasonal Unemployment: occurs because consumer demand for goods/services changes with seasons; e.g. no job
for ski instructor when/where there is no ice
Consequences of Unemployment
Remedies (with evaluation)
· Governments could subsidise struggling industries
However this could result in ’lazy’ inefficient industries
· Give unemployed people more training and skills
Hard for the government to predict what skills employers will want in the future.
· Reduce or cut unemployment benefits. This reduces the ’dependency culture’
Might lead to real social problems, and morally dubious.
· Increase government spending on projects such as road building, the NHS
Money could be wasted on projects that are not really needed.
· Cut tax to encourage spending, (fiscal policy)
Money may not be spent but saved or used to pay off debts.
· Cut interest rates to encourage spending (monetary policy)
Not everyone has mortgages or loans, so the impact of a cut may be lessened.
Summary of lesson