Assess the Likely Impact of Uk Government Labour Market Policies on Any Three Macro-Economic Objectives. Refer to the Information and to Your Own Knowledge
Assess the likely impact of UK Government labour market policies on any three macro-economic objectives. Refer to the information and to your own knowledge (30)
Labour market policies are government programmes that intervene in the labour market to help the unemployed find work. The three macro-economic policies I am going to look at are: full employment, steady sustainable economic growth and low inflation.
Full employment is the point in an economy, where everyone who is willing and able to work is in a job. A labour market policy the government could implement to help reach full employment could be the rise in the compulsory age for people in training or education. The effect of this will be that people will have better skills when they leave education/ training. This will lead to a reduction in occupational immobility as people’s skills will enable them to enter the workforce for a wider range of jobs, therefore there will be less structural unemployment. It is important because it means that in the long run the output of the economy will be greater. This is not always the case however, because there is no guarantee that the standard of training/education will be good enough to have a positive effect. It may be the case that people make no improvement and are in fact deskilled as a result of this. Also the time lag between the implementation of this policy and the effects would mean that in the short term there is only a reduction in the supply of workers. Another point is that some policies only work depending on the state of the economy at the time; in recession some labour market policies will not work, resulting in only a higher rate of inflation.
The second macroeconomic objective is steady sustainable growth. Economic Growth is an increase in the real level of national output as measured by the annual percentage change in real GDP. The target the UK government are looking to achieve is 2.5% a year. A policy the UK government could introduce to meet this
Labour market policies are government programmes that intervene in the labour market to help the unemployed find work. The three macro-economic policies I am going to look at are: full employment, steady sustainable economic growth and low inflation.
Full employment is the point in an economy, where everyone who is willing and able to work is in a job. A labour market policy the government could implement to help reach full employment could be the rise in the compulsory age for people in training or education. The effect of this will be that people will have better skills when they leave education/ training. This will lead to a reduction in occupational immobility as people’s skills will enable them to enter the workforce for a wider range of jobs, therefore there will be less structural unemployment. It is important because it means that in the long run the output of the economy will be greater. This is not always the case however, because there is no guarantee that the standard of training/education will be good enough to have a positive effect. It may be the case that people make no improvement and are in fact deskilled as a result of this. Also the time lag between the implementation of this policy and the effects would mean that in the short term there is only a reduction in the supply of workers. Another point is that some policies only work depending on the state of the economy at the time; in recession some labour market policies will not work, resulting in only a higher rate of inflation.
The second macroeconomic objective is steady sustainable growth. Economic Growth is an increase in the real level of national output as measured by the annual percentage change in real GDP. The target the UK government are looking to achieve is 2.5% a year. A policy the UK government could introduce to meet this