Demand side factors affecting employment


Demand side factors include:
1/ Strength / weakness of aggregate demand in the economic cycle i.e. changes in C+I+G+X-M - e.g. effect on jobs of a fall in UK exports overseas
2/ Cost of employing workers including real wages, employers’ national insurance contributions - many economists now calling for a cut in NIC as a way of stimulating jobs
3/ Impact of changes in the exchange rate and growth in trading partner countries on demand for and output in our export industries
4/ How changes in government spending and taxation can change the incentive for businesses to employ more/less people - impact of fiscal austerity / sharp decline in public sector jobs
5/ Impact of foreign direct investment on the demand for labour in the UK economy
6/ Employment effects from policies designed to stimulate enterprise (long run employment creation effects)