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WHAT IS IT?
· Unemployed people are people who are able, available and
willing to work but who cannot find a job.
· Unemployment causes a waste of scarce economic
resources and reduces the long run growth potential of the
economy. An economy with high unemployment is producing
within its production possibility frontier. The hours that the
unemployed do not work can never be recovered.…read more

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MEASURES OF
UNEMPLOYMENT
· UNEMPLOYMENT RATE= Number
Unemployed/workforce (Workforce=employed +
unemployed)
· THE CLAIMANT COUNT= measure of unemployment
counts only those who are eligible to claim Job Seekers
Allowance. Problem with it is that it misses out many who
are interested in finding work but don't meet all of the
criteria for claiming benefits therefore are not included in
the monthly unemployment count.
· THE LABOUR FORCE SURVEY= covers those who
have looked for work in the past month and are able to
start work in the next two weeks.
· LABOUR FORCE SURVEY USUALLY EXCEEDS THE
CLAIMANT COUNT.…read more

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TYPES AND CAUSES OF
UNEMPLOYMENT
· REAL WAGE /CLASSICAL UNEMPLOYMENT = real wages being above their market clearing
level.
· Demand-deficient or cyclical unemployment = Demand-deficient unemployment occurs when
there is not enough demand to employ all those who want to work. It is a type that
· Seasonal unemployment = Seasonal unemployment is fairly self explanatory. Father Christmas
tends to only be in demand for a short period of the year, and the rest of the year would certainly
be classified as seasonally unemployed. Most other seasonal unemployment is less severe than
this, and tends to occur in certain industries. Industries that suffer particularly are:
-Hotel and catering
-Tourism
-Fruit picking
-Father Christmases
The effects of seasonal unemployment are often highly regionalised. Areas such as Cornwall
suffer a great deal from this type of unemployment
· Frictional or search unemployment = When somebody loses their job (or chooses to leave it),
they will have to look for another one. If they are lucky they find one quite quickly, but they may be
unlucky and it may take some time. On average it will take everybody a reasonable period of time
as they search for the right job. This creates unemployment while they look. The more efficiently
the job market is matching people to jobs, the lower this form of unemployment will be. However,
if there is imperfect information and people don't get to hear of jobs available that may suit them
then frictional unemployment will be higher.
· Structural unemployment = Structural unemployment occurs when the structure of industry
changes. As an economy develops over time the type of industries may well change. This may be
because people's tastes have changed or it may be because technology has moved on and the
product or service is no longer in demand. In the UK many industries that were once major
employers have now all but disappeared.…read more

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