• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Discuss the Types of Unemployment and the Benefits of Controlling It In the UK.

Extracts from this document...


Discuss The Types Of Unemployment And The Benefits Of Controlling It In The UK. (20 Marks) Unemployment is the number of people out of work who are actively seeking employment at the current wage rates. To be actively seeking work you must be of working age: 16-64 for males and 16-59 for females and not economically inactive. That means you cannot be in full time education, be on a training scheme, have retired early or be raising children at home. To measure unemployment in the UK the government uses two methods to quantify the rate. The first is the Labour Force Survey, in a monthly survey of a sample of households representing the entire population. The surveys are based on the activities of each person of working age in the households, within a one week period. A person who did any work during that week for pay or profit, worked 15 hours or more as an unpaid worker in a family business, or had a job from which he or she was temporarily absent, is counted as employed. A person who was not working but was looking for work or was on a temporary lay-off and available to take a job is counted as unemployed. ...read more.


There is always turnover of labour in a free market, so frictional unemployment is not regarded as a major problem. Seasonal unemployment is when workers work within an industry that only requires them to be employed at certain times of the year. For example in the tourist industry workers tend to work in the summer, but are then laid off in autumn months before taking up their jobs again the next spring. There is very little that can be done to prevent seasonal unemployment in a market where the demand for labour varies throughout the year. Structural unemployment is when the demand for labour is less than the supply in an individual labour market. There are three main examples of this. Regional unemployment, where different areas of the country have different rates of unemployment and because of a lack of factor mobility, labour is not able to freely move between regions and balance unemployment. Sectoral unemployment is when workers from one industry are unable to adapt to a different industry, therefore not being able to follow the changes in demand. Finally if technological unemployment, where technology advances and replaces manual labour, therefore without retraining workers would not have the skills to operate these machines and therefore would not be suitable for the demand of labour. ...read more.


Not only do the government have to spend less on unemployment benefits but also have less trouble with crime and vandalism, which will also save them valuable money. Also everyone will have more money to spend, not only the previous unemployed, but also previous taxpayers as the government will require less money from them. This will increase total money in the economy and cause the aggregate demand to shift right, which will cause the growth of the economy to increase. So sustainable unemployment is good for the economy as it enables the government to set goals and work towards them around the long term predictions for unemployment rates. This is only an option if unemployment is kept in a boundary. Else if it is too fluctuated then it is hard to judge what the government will need to do from one day to the next. However controlling unemployment may not always be a good thing. For example because unemployment is directly related to economic growth, if you are controlling unemployment then you are also controlling economic growth. This will not be a good thing as the economy is at its most efficient when economic growth is climbing at a rate constant to the economy, not controlled by the government. ?? ?? ?? ?? AS ECONOMICS - Unemployment In The UK 21st April 2002 Matt Fitzsimmons - 1 - ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Macroeconomics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Macroeconomics essays

  1. Marked by a teacher

    The aim of this essay is to discuss the relevance of John Keynes to ...

    5 star(s)

    This will not comply with Keynes theory which suggests government cut taxes in an economic downturn. Monetary policy is defined "central government policy with regard to the quantity of money in the economy, the rate of interest and the exchange rate" (Bannock G, 2003: 236).

  2. Free essay

    Define and determine the types and trends of UK unemployment

    4 star(s)

    This may be because they have been unemployed for so long that they have lost all motivation for searching for work or they may have lost their skills requires. In any economy there will always be a certain amount of unemployment, even when there is 'full employment'.

  1. Budget 2004-05 and Economic Analysis of Pakistan

    MONETARY POLICY: The State Bank of Pakistan (SBP) continued with an easy monetary policy stance during the year with a view to reinforcing the growth momentum that had picked up last year. Accordingly, the interest rate environment not only remained investor-friendly but middle class borrower also benefited from such environment.

  2. Governments set economic objectives - Discuss the relative importance of each of these objectives ...

    If, however, its resources are fully employed, it will have to rely on increases in resources or more likely, increases in the quality of resources There is conflict between consumption and investment. Economic growth can be achieved by increases in investment, but increased investment is at the expense of expenditure on consumption goods.

  1. How have the Rates of Inflation in the UK Changed Since the Monetary Policy ...

    slightly and this is immediately followed by a small increase in the interest rates. The fall in inflation from the beginning of 1998 until 1999 is followed by steady decrease in interest rates. It is here that an anomaly occurs from the theory because firstly inflation rises while the MPC

  2. Comparing the effects of immigration on GDP in Malaysia, Japan and South Africa.

    Other than that, immigrant may also bring diseases from their native country which will affect the health rate of the local citizen. Pathogens and viruses are having high possibilities to spread to other countries through immigrants. For example, AIDS was transferred to the United States in 1969 through one infected immigrant from Haiti.

  1. Identify the causes of unemployment and suggest suitable remedies

    If there is a big fall in the demand for products in the goods market (during a recession, for example) then the demand for labour will fall causing unemployment. Using the same diagram as before, one can see that the equilibrium wage is W1 giving a level of employment of L1.

  2. Economics of the airline industry

    As with anything else, this would result in less-qualified people occupying key positions in the industry and this could compromise the safety of the passengers. The airline industry had to increase the wages of employees to maintain well-trained staff and to pay them at a rate that was more in line with what they should receive.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work