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level: Measuring Unemployment

Questions and Answers List

level questions: Measuring Unemployment

QuestionAnswer
Define Unemployment in Economic Terms [Level and Rate]-Level of Unemployment is the Number of People who are Looking for a Job, but can't find one -Rate of Unemployment is the Number of People out of Work as a % of the Labour Force [All the People who are Willing and Able to Work - Includes those Working, and those Looking for work]
How does the Claimant Count measure Unemployment?-This is the Number of People claiming Unemployment Benefits from Government - Includes those collecting Jobseekers Allowance [JSA] Universal Credit and other groups.
What are the Benefits, but Drawbacks of using the Claimant Count?-Data is Easy to Obtain, just count who is collecting Unemployment Benefits -No Cost in Collecting the Data as its Recorded when People apply for Benefits -But it can be Twisted by Government to make it look Smaller. If Government decides to put School Leaving age at 19, this can reduce the 'Unemployment' -And it will Exclude those Looking for Work, but is Unable [Or doesn't want to] get any Benefits
How does the Labour Force Survey measure Unemployment?-International Labour Organisation [ILO] will use a Sample of the Population, and ask People who aren't working if they are Actively Seeking Work. -Number of People who say 'Yes' [Regardless of Benefits] added up to the ILO Unemployment Count.
What are the Benefits, but Drawbacks of using the Labour Force Survey-More Accurate than the Claimant Count -Internationally Agreed Measure for Unemployment so allows Easy Comparisons -But its rather Expensive to Put and Gain the Data -And it can be Unrepresentative of the Population, making it Wrong
Why does the Labour Force Survey usually have a Higher figure than the Claimant Count?-The Claimant Count will exclude certain Groups out. For Example, people may be Unable to get Benefits as they have a Rich Husband, or too much in their Savings -They may still be Actively Looking for a Job, but they won't be Included in the Claimant Count Figure
Why does Unemployment prove to be a Cost to the Economy? -Why does Government want to Track Unemployment figures?-High Rate of Unemployment can make an Economy seem Ill -Unemployment leads to Lower Incomes and Less Spending, making Firms affected too by Cutting Production -Unemployment means there is Unused Labour, so Fewer Goods and Services can be Made [PPF] -Government has more Costs in the form of Welfare Benefits, and less Revenue as there is Less Tax