Unit 2 Macro: Record(ing) Unemployment

As unemployment hits the headlines for the wrong reasons again : ‘The Eurozone is heading for disaster’.... ‘the lost generation’.... it is a great opportunity to study the theoretical concepts in this area. Unemployment in the eurozone hit a fresh high of 18.2 million in August; the highest unemployment rate was recorded in Spain, where 25.1% of the workforce is out of a job! Youth unemployment remains a particular concern, with the rate among under-25s hitting 22.8% across the eurozone and data from Eurostat shows that 55.4% of adults under 25 are out of work in Greece, compared to 52.9% in Spain!

In the UK we measure unemployment through the Claimant Count which includes people who are eligible to claim Job Seeker’s Allowance (JSA) whilst the Labour Force Survey (survey of 000’s of households which may give rise to sampling errors in collection) counts those who are currently without a job but who have looked for work in the past month and are able to start work immediately. Since The LFS uses the international definition of unemployment it enables better comparisons of unemployment levels among countries. More information on these measurements can be found through Geoff’s blog here

There is no doubt an obvious question arising here might be to ‘discuss the consequences...’ and whilst the long-term costs of being young and jobless are not in doubt, we cannot say the same about the figures which are published in this area, because of the way unemployment rates are calculated. It is therefore always worth considering the accuracy of such measurements and this BBC article provides an excellent overview of some of the problems of accurately measuring unemployment.

There are plenty of concepts to highlight here, and for those pupils preparing for macroeconomic exams; use this data to consider and revise how how unemployment is measured alongside problems of data accuracy, whilst 'cause and/or consequence' questions have long been examiner favourites with macroeconomic issues.