Please enable JavaScript.

Coggle requires JavaScript to display documents.

Using real-world examples, discuss the view that the best way to reduce…

- - - - However, Cycllical unemployment is a demand-deficit type of unemployment. Therefore, eduacation and training, which is supply side police, as it increases quality and quantity of factors of production, will be inappropriate there as the the issue of this type of unemployment is not in the aggregate supply but aggregate demand
      - For example, expansionary fiscal policy, by increased government spending and decreased level of taxation for households and firms, the components of C and I will increase, which will incease AD, increasing the real GDP and as a result decreasing the cyclical unemployment
      - RLE. As measures set to tackle the pandemic unemployemnt, the expansioanry fiscal policies were implemented in the US, which increased the government spending by 18.5%, decreased the business tax by 5%, which helped to decrease the unemployment form 14.8% to 5.4% in 2021
      - Diagram
  - - - Education and training could help workers to retrain slightly so that they could have a wider range of skills or a deeper set of them.
      - HOWEVER, frictional unemployment. is a short-term, therefore, the long-term nature of education and traning will be useless.
      - It would be better to improve job information, so that the employer and employee could find each other faster, though there is no guarantee still.
      - RLE. In Greece since 2011 there was a high job apprenticeship policy, however, it didn't help to deal with high unemployment, which was on the level of 20%, but when the job information service were apoted in 2018, the unemployment began to decerase steadily by 1.7% per year
  - - - Education and training can help change the set of skills that employees possess in order to reduce the dependence of their employment on seasonal needs.
      - HOWEVER: This again will require multiple costs from the government budget and many workers may reluctant to participate in these retraining programs
      - It may work, but it is necessary to take into account all possible pros and cons - does the benefit outweigh the costs
  - - - Seems like we have already written it in the general structure
      - Spending on education and training will help to effectively solve the problem of occupational mobility, providing employees with new skills needed in specific developing industries with a great need for labor. However, these spending cannot affect the geographical immobility of workers as a cause of structural unemployment.
      - To solve this problem, the state can provide grants to employees in specific geographical areas or subsidize low cost housing in order to attract people
      - In 2021, the Australian Government has announced a year-long extension to the Boosting Apprenticeship Commencements scheme, supporting education providers and industries to enroll and employ new apprentices and trainees across various occupations. Since its introduction in October 2020, the scheme has quickly reached its initial cap of 100,000 subsided wages; its success was valued at $1.2 billion.
  - - - Since the minimum wage is usually used in the context of paying low-skilled workers, government spending on education and training can slightly reduce the unemployment rate on wages, bringing part of the workforce to a more qualified level. This will increase the productivity of some firms, justifying higher wages for hired labor.
      - However, as in most of the cases already described, the main disadvantage of spending on education will be large costs for the government budget
      - However, a decision to lower the minimum wage or weaken the laws on hiring or firing employees will be much more effective, transferring the regulation of unemployment to the force of supply and demand in the labor marke