Employment and Unemployment MCQ 2

The Live Register

• Measures individuals receiving unemployment-related social welfare payments, such as jobseekers allowance
• Not an accurate measure of unemployment due to various limitations

Limitations of the Live Register

• Includes individuals in part-time employment who receive partial social welfare payments for days not worked
• Includes a small number of individuals in full-time employment in the hidden economy who illegally receive social welfare payments
• May include individuals who are 'voluntarily unemployed' and not actively seeking work

Implications of Unemployment

The Economy

• A rise in unemployment leads to reduced consumption expenditure due to a fall in disposable incomes, causing consumers to reduce spending and save more.
• Reduced aggregate demand results in less investment, driven by negative expectations.

Government Finances

• Social welfare costs, such as Job Seeker's Allowance, increase due to unemployment.
• Government revenue from direct and indirect taxation falls due to decreased economic activity.
• The government budget deficit rises as a result of reduced revenue and increased social welfare costs.

Individuals/Households

• Unemployment serves as a push factor, leading to emigration and acting as a safety valve for the economy (reducing social welfare payments).
• Brain drain occurs as educated individuals leave to work abroad.
• Households struggle to pay for basic necessities due to high unemployment.

Household Incomes

• Poverty levels rise due to high unemployment, leading to increased inequalities.
• Households face difficulties, with some even having their homes repossessed (as seen in the 2008 crisis).

Learn about the Live Register, a method of measuring unemployment rates, and its limitations, including issues with part-time employment and fraudulent claims.