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Labour Productivity

Labour Productivity. Total output. Labour Productivity. =. Total input. or in practical terms. GDP. Labour Productivity. =. Working age population. Unemployment Rate. # of persons unemployed. Unemployment rate (%). 100. =. x. Total labour force. Types f Unemployment. Cyclical

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Labour Productivity

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  1. Labour Productivity Total output Labour Productivity = Total input or in practical terms GDP Labour Productivity = Working age population

  2. Unemployment Rate # of persons unemployed Unemployment rate (%) 100 = x Total labour force

  3. Types f Unemployment • Cyclical • Structural • Long-term • Seasonal • Frictional • Hard-core • Hidden • Underemployment

  4. Cyclical unemployment • A result of economic downturn • Occurs due to a fall in demand for goods and service, which flows on to demand for labour • Will be reduced by economic upturn • A concern for governments

  5. Structural Unemployment • A result of a mismatch between skills of the unemployed and jobs available • Occurs when new industries emerge and employee’s skills are no longer valued • Individuals need to acquire new skills to become employable again

  6. Long-term Unemployed • Unemployed for 12 months or more • Of concern as the longer the period of unemployment, the reduced chance of the person finding suitable employment • May begin as cyclical unemployment and become long term unemployed

  7. Seasonal Unemployment • Occurs as a result of changing patterns of consumer demand relating to at different times of the year (eg Christmas, tax time) • Unemployment will rise at Christmas as school leavers enter the market

  8. Frictional Unemployment • Occurs when people change jobs • The period between finishing one job and starting the next

  9. Hard-core Unemployment • May be considered unemployable due to personal characteristics such as disabilities, addictions, anti-social behaviours

  10. Hidden Unemployed • People who have ceased looking for work as their expectancy for finding a job is low • As they are not willing and able to supply their labour, they are not considered to be unemployed • A rise in hidden unemployment will result in a fall in the lfpr(%) rather than an increase in unemployment

  11. Underemployment • Workers who are employed for more than one hour per week and are willing and able to work more hours each week but are unable to find suitable work for those additional hours • These people do not count as unemployed in the statistics but do reduce the production possibility

  12. Labour Force Participation Rate (LFPR) Labour force LFPR (%) 100 = x Working age population

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