IB Economics: Unemployment Lesson 1

What is unemployment and how is it measured? n According to the International Labour Organisation (ILO), unemployment is defined as “people of working age who are without work, available for work and actively seeking employment” population economically active n What is the difference between population and economically active? n Why is it difficult to measure the size of the labour force, those employed and therefore the unemployment rate? n Claimant count Vs Registration rate n Discouraged workers – long term unemployed who have given up the search

Distribution of Unemployment  Geographical disparities: some countries have specific regions which for some reason have higher unemployment rates.  Age disparities: unemployment among the under 25’s is often higher than for older workers.  Ethnic disparities: minority groups often face higher unemployment rates. This may be because of differing educational opportunities or due to attitudes.  Gender disparities: Unemployment rates have tended to be higher for women in industrialised countries.

Costs of Unemployment  To the unemployed themselves  To society  To the economy  The costs of unemployment increase as the duration of the unemployment increase. How can UNEMPLOYMENT be shown on a PPF?

How can we show Unemployment on a Keynesian LRAS/AD? This type of unemployment is known as demand deficient unemployment

UK France USA Germany Japan OECD Unemployment rates in selected industrial countries Fig 1.1

Unemployment Tasks  Unemployment is in the news at the moment: – Read and print 3 news articles from 3 different countries which are lesson than 1 month old and from 3 different sources Read and print 2 articles which highlight the distribution of unemployment in your home country Read and print 2 articles about the costs of unemployment in your home country Produce a chart in Excel that compares unemployment rates over time in different countries – i.e. produce an update for fig 1.1 Produce a chart in Excel that compares the distribution of unemployment in one or more counties over time.