Measuring unemployment
- Unemployment is when people who are willing and able to work can't find a job.
- The claimant count counts people claiming unemployment-related benefits. The Labour Force Survey (LFS) uses the international (ILO) definition: people without a job who have looked for work in the past four weeks and can start within two weeks. The LFS usually gives a higher figure.
- The unemployment rate = unemployed ÷ labour force × 100.
Types of unemployment
- Cyclical (demand-deficient): caused by a recession, when demand falls across the economy.
- Structural: caused by long-term changes in the economy, such as the decline of coal mining or shipbuilding.
- Frictional: people between jobs, which is short-term.
- Seasonal: jobs that exist only at certain times, such as tourism in summer.
Consequences
- For individuals: lower income, loss of skills, stress and poorer health.
- For the economy: lost output, lower tax revenue and higher benefit spending, and possible social problems.
- Policies: training (for structural unemployment), boosting demand (for cyclical) and better job information (for frictional).
Key terms
- Unemployment
- Being willing and able to work but not having a job.
- Claimant count
- The number of people claiming unemployment-related benefits.
- Labour Force Survey
- A survey measuring unemployment using the international definition.
- Cyclical unemployment
- Unemployment caused by a fall in demand in a recession.
- Structural unemployment
- Unemployment caused by long-term decline of industries.
- Frictional unemployment
- Short-term unemployment between jobs.
- Seasonal unemployment
- Unemployment linked to times of the year.