Please enable JavaScript.
Coggle requires JavaScript to display documents.
2ec2p, group 4
Unemployment - Coggle Diagram
2ec2p, group 4
Unemployment
Causes & Policy
Structural
-
Caused by change in SS: technological unemployment / of certain industries to a diff location / regional unemployment
-
SS policy: upgrade skills of the workforce, use subsidies to manage change in economic structure
-
Seasonal
-
-
Policy: work-sharing programme, spread production throughout the yr, add other lines of production, offer reduced off-season rates at hotels
Frictional
-
Occurs when ppl leave their jobs (voluntarily or being sacked and made redundant) & when new entrants are still looking for a new job
-
Real wage
-
Policy: restrict power of trade unions, reduce minimum wage
Consequences
Economic
-
-
Unemployment is prolonged and ppl lost motivation > leave labor market permanently > reduce growth potential
Fall in tax revenue + increase spending on unemployment benefits >budget deficit > raise tax or spend less on public and merit goods
Remain unemployment for too long> erosion of skills> Quality of work force worsens> Fall in productivity
-
-
-