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

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AS ECONOMICS – Unemployment In The UK        21st April 2002

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.  The second is the claimant count, where the governments collect figures on the number of people claiming unemployment benefits from the DSS.  This second method often gives lower values as they is likely to be many people who do not except the benefits, purely on principal or because they do not need the extra cash.

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There are five main types of unemployment which all affect the economy in different ways.  These are cyclical or demand deficient unemployment, frictional unemployment, seasonal unemployment and structural unemployment.

The first of these, cyclical or demand deficient unemployment is based around what will happen to demand in a recession.  When the economy goes into a recession there is a rise in unemployment as there is insufficient demand within the economy.  This is really only a short term cause to unemployment, because when in recession the economy is in disequilibrium.  However macroeconomic forces will work to restore the economy to its ...

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