Employment and Unemployment MCQ 1

Study Notes

Full Employment: A situation where everyone who wants a job can find one at existing wage levels, usually indicated by an unemployment rate of 4%.
Zero Unemployment: Unachievable in reality due to structural and frictional unemployment.

Employment: Refers to individuals currently engaged in work in return for payment.
Unemployment: Refers to individuals who are not working but are available for work and actively seeking work.
Workforce: All those who are employed.
Labour Force: All those who are available for work and are actively seeking work or engaged in work currently (includes both workforce and unemployed individuals).
Unemployment Rate: The proportion of the labour force that is currently unemployed.

Underemployment: Occurs when a worker's skills/time are not being utilized to their full potential, e.g., a highly qualified family member returning home to work on the family farm.

Structural Unemployment: arises from a mismatch between the skills of the unemployed and available job openings, often due to technological advancements rendering certain jobs obsolete, such as checkout operators being replaced by self-service tills.

Frictional Unemployment: occurs when individuals are transitioning between jobs, entering the labor force for the first time, or seeking new employment opportunities after leaving a previous job.

Temporary unemployment experienced by individuals working in industries with seasonal fluctuations, such as tourism, resulting in job losses during off-peak seasons, e.g., tour guides or hotel receptionists during winter months.

Unemployment resulting from decreased demand for goods and services during economic downturns, such as the 2008 financial crisis in Ireland or the 2020 Covid-19 pandemic, leading to increased job losses.