employment-and-unemployment

Measures of Unemployment

• Someone is considered unemployed if they are not working but actively seeking work

  • They are part of the labour force and in the population of working age so are economically active

• A country’s population is divided into the labour force – and non labour force

  • The labour force consists of all workers actively working and the unemployed (who are seeking work)

    • Usually between the ages of 16-65

  • The non-labour force includes all those not seeking work e.g. stay-at-home parents, pensioners, schoolchildren, and students

    • Economically inactive are those between 16 and 65 and not working or not seeking work, e.g. early retired

• Unemployment in the UK is measured using two different approaches

  • The International Labour Organisation (ILO) Survey

  • The Claimant Count

The Differences Between the ILO Labour Force Survey and the Claimant Count

The Distinction Between Unemployment & Underemployment

• Unlike the unemployed, people who are underemployed are working

• Someone is underemployed when:

  • They want to work more hours than they currently work

  • They are working in a job that requires lower skills than they have, e.g. an architect working as a gym instructor

• Underemployment is often a response to cyclical unemployment

  • Workers who have lost their jobs in a weak economy are willing to take part-time jobs or accept roles outside of their main skill base

• Underemployment is also a consequence of structural unemployment

  • Unless workers retrain and gain new skills, it will be hard for them to gain full employment

The Significance of Changes to Employment, Unemployment & Inactivity Rates

Four Metrics Are Commonly Used When Analysing the Labour Market in an Economy