Unemployment - 2021 Revision Update

This study resource brings together new, updated revision videos covering key aspects of the economics of unemployment.

In this introductory session we look at the meaning and measurement of unemployment. Achieving high employment and low unemployment is a key macroeconomic aim for most governments

The unemployed are people of working age who are out of work and actively seeking work in the labour market. They must be available to start work within the next two weeks.

The unemployment rate is the proportion of the economically active population who are without a job.

The Labour Force Survey:

This survey asks 60-70,000 UK households to self-classify as being employed, unemployed or economically inactive.

The Claimant Count

This measure counts the total number of recipients of Job Seeker's Allowance (JSA) added to those looking for work to claim Universal Credit (UC).

In this video we will work through some of the key unemployment concepts which help us to dig beneath the official published data to get a better feel for what is going on in the labour market of individual countries.

Some key concepts

Full employment

When there enough job vacancies for all the unemployed to take work. There will always be some unemployment in the economy.

Mass unemployment

Mass unemployment exists when officially one person in ten in the labour force is counted as being out of work. In practice, the true level of unemployment might be significantly higher than this.

Economic inactivity

Those who are of working age but are neither in work nor actively seeking work.

Long-term unemployment

Long term unemployment accounts for people who have been out of work for at least one year. This is a structural supply-side problem in the labour market.

Key point: The longer someone is without a job, the harder it is for them to find their way back into paid employment.

Under-employment

Workers are under-employed when they are willing to supply more hours of work than their employers are prepared to offer.

Hidden unemployment

Hidden unemployment is also known as disguised unemployment. The number of people who do not have work but who are not counted in government reports, for example, people who have stopped looking for a job and people who work less than they want to.

Causes of unemployment

In this revision video we explore some of the key causes of unemployment including frictional, cyclical and structural explanations.

Economic and Social Costs of Unemployment

In this video we look at some of the important economic and social costs arising from high rates of unemployment.

Economic Policies to Reduce Unemployment

Demand and supply-side policies to reduce unemployment are analysed and evaluated in this revision video.