Employment and unemployment

The table displays the unemployment rate in three developed economies in June 2013. What is the principal reason for high unemployment rates in developed economies during recessionary periods?

May/June 2015

Between 2012 and 2013 in Pakistan, both the annual inflation rate and the economic growth rate declined. A number of economists argued that the Government ought to cut government spending in order to push inflation down further. If inflation became lower, economic activity could rise and unemployment could fall.

May/June 2015

Which policy mix would be the most effective if a government aims to increase the level of employment?

May/June 2017

Spain has recorded one of Europe's highest unemployment rates. In addition, by 2015, $3.5$ million of the unemployed had been out of work for at least a year. The Spanish Government has put in place a variety of policy measures, such as higher government spending, to cut unemployment and poverty. It has also attempted to make firms' product supply more elastic.

May/June 2017

What is meant by frictional unemployment?

May/June 2019

Global unemployment was forecast to rise by more than two million in 2017. However, unemployment rates differ from country to country. To bring unemployment down, some governments apply fiscal policy measures, while others use supply-side policy measures. Trade protection can also have an effect on the unemployment rate.

May/June 2019

In 2018, the US recorded its lowest unemployment rate in 18 years. Cyclical unemployment was extremely low, and inflation was also low. The US additionally experienced an increase in labour productivity. Even so, it was less successful at cutting poverty. In 2018, around $12\%$ of Americans were living in poverty.

May/June 2021

In a country’s retail trade, one region has unemployed workers while a different region has job vacancies. What might account for this?

May/June 2022

What is most likely to cause structural unemployment to rise in a country?

May/June 2023

What is a probable result of a declining unemployment rate?

May/June 2023

The diagrams display Italy’s unemployment rate and GDP per head. At what point do Italy’s unemployment rate and GDP per head increase at the same time?

May/June 2023

What condition must a worker meet to be counted as unemployed?

May/June 2024

A government calculates unemployment using the labour force survey method. What condition must a person meet to be counted as unemployed under this method?

May/June 2025

What is most likely to increase when the level of employment decreases in a high-income economy?

May/June 2025

During 2020, in order to slow the spread of a pandemic, numerous governments shut restaurants and cafés for a limited period. What would be a macroeconomic effect of this policy?

May/June 2025

A government carried out a labour force survey. Only people of working age were included in the survey. The results are displayed in the table. What percentage of working-age people are in the labour force?

May/June 2025

A school leaver is not able to secure a job straight after finishing education. Which type of unemployment is this?

May/June 2025

In 2022, over a quarter of a million workers, doctors included, left Sri Lanka to find jobs in other countries. Economic difficulties were a major cause, including an inflation rate of $50\%$ and fears that unemployment might increase. The Sri Lankan Government raised direct taxation. It also encouraged some public sector workers to go abroad temporarily. People employed overseas often send money back to relatives.

May/June 2025

During $2015$, $70\,000$ additional people became unemployed, but total employment increased by $75\,000$. What might account for this?

Oct/Nov 2016

Wales’ unemployment rate decreased from 8.2% in March 2013 to 6.8% in March 2014. One in four workers in Wales works in the public sector. A relatively large share of workers is employed by multinational companies, including a Japanese car producer and a South Korean electronics firm.

Oct/Nov 2016

What is likely to decrease when the unemployment rate drops?

Oct/Nov 2017

Nauru is among the world’s tiniest countries, with a population of just $10\,000$. Half a century ago, it had one of the highest incomes per person in the world, mainly because it exported phosphate that had built up over many centuries from sea-bird droppings. This labour-intensive sector has now shrunk sharply. Today, incomes are much lower and one third of workers are unemployed.

Oct/Nov 2017

The diagram illustrates the unemployment rate and the periods of recession in a country from 1978 to 2012. What conclusion can be drawn from the diagram?

Oct/Nov 2018

In one country, the unemployment rate rose in August as it normally does each year. This was then followed by job losses caused by the usual decline in global economic activity. Which types of unemployment occurred?

Oct/Nov 2018

The diagram indicates the unemployment rate and the recession periods in a country between 1978 and 2012. What conclusion can be drawn from the diagram?

Oct/Nov 2018

A country saw the normal August rise in its unemployment rate. Regrettably, this was then followed by job losses caused by the usual fall in worldwide economic activity. Which types of unemployment occurred?

Oct/Nov 2018

What is the most probable effect of increasing the retirement age in a country?

Oct/Nov 2018

Liberia is a country in west Africa that has encountered several serious difficulties in recent years. These have included a civil war and, in 2014, the outbreak of the Ebola epidemic. However, there have also been some improvements. The unemployment rate was 85% in 2004 but had fallen to 4% in 2016. This fall has affected both emigration and wages. Workers have been paid higher wages, although some economists believe that these higher wages have pushed up the country’s inflation rate, which in 2016 was 8%. The country has a plentiful supply of drinking water and a climate that is favourable for agriculture. More than 70% of the country’s labour force is now employed in agriculture. The country’s main exports are rubber, iron ore, timber and gold. A US multinational company (MNC) operates the world’s largest individual natural rubber farming operation in Liberia. The price of rubber dropped by 75% between 2011 and 2016. Global rubber supply had risen above demand because a number of countries introduced import restrictions on rubber. In reaction to the lower price, the US MNC reduced its production, but it still made a loss. The MNC does not want to close down and is trying to survive by cutting costs. In the long term it aims to maximise profits. When some of its 7000 workers retire, they will not be replaced. The MNC has adopted new production techniques and diversified into growing cocoa and coffee. The Liberian government is giving subsidies to local rubber farmers so that they can buy new equipment and introduce new farming methods. Even though the situation is difficult, some local Liberian rubber farmers are expanding the scale of their operations by purchasing more land. Others are diversifying by using wood from rubber trees to make furniture. While supporting its rubber farmers, the Liberian government is also promoting growth in the secondary and tertiary sectors. Between 2014 and 2016 it increased spending on healthcare, but this came at the cost of several public sector investment projects. Table 1 compares the infant mortality rate and healthcare expenditure per head in selected countries in 2015.

Oct/Nov 2018

When unemployment is high throughout the labour force, the unemployment rate in an economy is often greatest among the $16$-$19$ year-old age group. Which statement explains why $16$-$19$ year-olds may have difficulty finding a job?

Oct/Nov 2019

Which type of unemployment occurs when there is a permanent decline in demand for the products of an industry?

Oct/Nov 2019

From 2007 to 2017, average wages in China trebled, whereas they declined in Brazil. The increase in China was especially large in the tertiary sector. Farm workers saw a more modest increase. In June 2017, unemployment in China stood at only 4% compared with 13.5% in Brazil. Even though unemployment was lower, China’s inflation rate was below Brazil’s.

Oct/Nov 2019

Which group ought to be excluded from the measurement of unemployment?

Oct/Nov 2020

The diagrams illustrate Italy’s unemployment rate and GDP per head. At what time do Italy’s unemployment rate and GDP per head increase together?

Oct/Nov 2020

Which set of policy measures is most likely to boost employment levels?

Oct/Nov 2021

Why could policies designed to lower unemployment also lead to higher inflation?

Oct/Nov 2021

Which mix of policy measures is most likely to raise the level of employment?

Oct/Nov 2021

What is meant by the unemployment rate?

Oct/Nov 2022

The table illustrates changes in economic growth and inflation. Which changes are most likely to have been caused by increasing unemployment?

Oct/Nov 2022

What is the most probable result of an increase in unemployment?

Oct/Nov 2022

In 2019, Russia recorded an unemployment rate of $4.6\%$. Russia has experienced full employment before. The government aims to bring unemployment down further. During 2018, the Russian government reduced spending, which may have pushed poverty higher. In both 2018 and 2019, the government left its income tax rate unchanged. Russia uses a proportional tax rate system.

Oct/Nov 2022

Romania’s indirect tax rate stood at 19% from 2017 to 2019. A large share of foreign multinational companies (MNCs), especially US MNCs, are based in Romania. MNCs have raised productivity in Romania and cut its unemployment rate. MNCs can also bring advantages to their home countries.

Oct/Nov 2022

In 2020, several firms in Suriname, a country in South America, ceased production. This happened because the firms were unable to meet their variable costs and also some fixed costs. The fall in the country’s output caused its unemployment rate to rise. The government introduced supply-side policy measures to bring unemployment down. In 2021, firm numbers in some markets dropped again, but output was increasing this time.

Oct/Nov 2023

What leads to cyclical unemployment during a recession?

Oct/Nov 2024

What is measured by the labour force survey (LFS)?

Oct/Nov 2024

What are the correct definitions of unemployment and employment in relation to the number of people of working age?

Oct/Nov 2025

A country undergoes a substantial decrease in unemployment. What could be one possible advantage and one possible disadvantage of this decrease?

Oct/Nov 2025

Study the source material closely before you answer Question 1. Source material: Labour shortages in Japan Japan has a relatively old average population age and mixed economic performance. It has a low birth rate, a low inflation rate, strong healthcare, high life expectancy and a low unemployment rate. Each year, fewer Japanese people join the labour force. It is forecast that Japan’s labour force will decrease by 10 million by 2040. Many young Japanese people move to Australia, Canada and the US in search of better pay. However, Japan is now experiencing net immigration, although foreign workers are still only a small share of Japan’s labour force. To reach an annual economic growth rate of 1.2%, it has been estimated that foreign workers would need to rise to 7 million by 2040. Some foreign workers are put off working in Japan because they must pass a Japanese language test. Only the most highly skilled are permitted to remain for more than 5 years and to take their families with them. Many Japanese industries are being affected by labour shortages and by the country’s falling population. For instance, the population decline has affected the volume of furniture traded. It has also had an impact on the country’s air transport industry. Air travel is the main transport method in Japan for foreign travel and for long-distance domestic travel. Japan’s air passenger figures show a pattern similar to world air passenger figures. Table 1.1 shows global GDP per head and global air passenger numbers between 2016 and 2022. Demand for goods and services, including air travel, depends on how much people save. Japanese people save a fairly large share of their income. This has affected the country’s inflation rate, current account balance of the balance of payments and economic growth rate. Japan’s macroeconomic performance is also affected by the mobility of its labour force. There are several reasons why the mobility of Japan’s labour force may alter in the future. These include an ageing workforce and possible changes in education and training, house prices and the quality and cost of transport. Answer all parts of Question 1. Use the source material in your answers.

Oct/Nov 2025

A central bank or government can use a number of policy measures to cut unemployment. One option for a government is to raise spending on house construction. The Federal Reserve, which is the central bank of the US, has two principal aims: to keep prices stable and to reach full employment. A few central banks also aim for economic growth, but no central bank sets HDI value as a target.

Oct/Nov 2025