DB123 Finance For Decreased And Increasing Rate Of Paid Employment

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Answer:

Part A

Table 1: Distribution of working age people in household

Owner occupied
Year	All adults	Some adults	No adults	All adults
1997	15412	9215	2083	26711
2002	16548	9348	2009	27905
2007	16607	9699	1861	28168
2012	14457	10319	1751	26527
2017	15365	9277	1489	26131
Rented
Year	All adults	Some adults	No adults	All adults
1997	3646	3167	3177	9989
2002	3831	3033	2984	9848
2007	4474	3753	3054	11280.27
2012	5531	5058	3344	13933
2017	6934	5392	2651	14977
All tenure types
Year	All adults	Some adults	No adults	All adults
1997	19047	12368	5248	36,700
2002	20386	12383	4983	37,752
2007	21114	13458	4933	39,465
2012	19987	15375	5098	40,460
2017	22281	14676	4111	41,109

The tables above shows distribution of the working age people in household. The households in the nation are categorized in three groups – owner occupied, rented and in all tenure types. The adult population is classified as share of all adults in paid employment, some adult in paid employment and no adult in paid employment. Between 1997 to 2002 the share of adults in paid employment had increased from 57.7% to 59.3%. The percentage share declined in 2007 to 58.9% and to 54.5% in 2012 (ons.gov.uk, 2018). This share is recovered in 2017 and the share became 58.8%. So far as the some adults group is considered under owner occupied group the percentage share remain more or less around 33% to 34%. An exceptional increases in observed between 2007 and 2012 when the share of some adult in paid employment increases from 34.4% to 38.9%. In the no adult group, the percentage share decreases continuously. For the rented group, the share of all adults in paid employment has increased continuously. In 1997, the percentage share was 36.5%, which rose to 46.3% in 2017. For no adults the percentage share recorded a continuous fall from 31.8% in 1997 to 17.7% in 2017. Considering all tenure types together,  participation of all adult in paid employment increases between 1997 and 2002, declined thereafter and finally recovered in 2017. In the all tenure types, the share of no adults in paid employment declined continuously like two other groups.

Table 2: Overtime comparison within groups

Owner occupied
Year	Changes in all adults	changes in some adults	Changes in no adults	Changes in all adults
1997
2002	7.37	1.44	-3.57	4.47
2007	0.36	3.76	-7.38	0.94
2012	-12.95	6.39	-5.92	-5.83
2017	6.28	-10.10	-14.93	-1.49
Rented
Year	Changes in all adults	changes in some adults	Changes in no adults	Changes in all adults
1997
2002	5.07	-4.21	-6.06	-1.41
2007	16.78	23.72	2.34	14.54
2012	23.64	34.78	9.50	23.52
2017	25.36	6.60	-20.72	7.49
All tenure types
Year	Changes in all adults	changes in some adults	Changes in no adults	Changes in all adults
1997
2002	7.03	0.12	-5.05	2.87
2007	3.57	8.68	-1.01	4.54
2012	-5.34	14.25	3.34	2.52
2017	11.48	-4.55	-19.36	1.60

The above table summarizes the percentage change in adult population and its respective share in paid employment. In the owner occupied group the growth rate of total adult has declined gradually. The growth rate of adults in 2002 was 4.47%, which declined to -1.49% in 2017. The share of no adult in paid employment has decreased at an increasing rate. In the some adults group, the percentage share has increased from 1997 to 2012 but the growth rate become negative between 2012 and 2017. In the group of rented household total adult has increased until 2012 but declined between 2012 and 2017. The growth of no adult has declined, while that of all adult and some adult has increased until 2012 and shows a reverse trend thereafter.

Table 3: Overtime comparison between groups

All Adults
Year	Change in owner occupied	Changes in Rented	Changes in all tenure types
1997
2002	7.37%	5.07%	7.03%
2007	0.36%	16.78%	3.57%
2012	-12.95%	23.64%	-5.34%
2017	6.28%	25.36%	11.48%
Some Adults
Year	Change in owner occupied	Changes in Rented	Changes in all tenure types
1997
2002	1.44%	-4.21%	0.12%
2007	3.76%	23.72%	8.68%
2012	6.39%	34.78%	14.25%
2017	-10.10%	6.60%	-4.55%
No adults
Year	Change in owner occupied	Changes in Rented	Changes in all tenure types
1997
2002	-3.57%	-6.06%	-5.05%
2007	-7.38%	2.34%	-1.01%
2012	-5.92%	9.50%	3.34%
2017	-14.93%	-20.72%	-19.36%
Total Adults
Year	Change in owner occupied	Changes in Rented	Changes in all tenure types
1997
2002	4.47%	-1.41%	2.87%
2007	0.94%	14.54%	4.54%
2012	-5.83%	23.52%	2.52%
2017	-1.49%	7.49%	1.60%

The table above shows comparison between different groups of household. The growth of owner occupied household in all adults group has declined continuously, for rented household growth has increased continuously. For some adults group however the growth of owner occupied household increases until 2012 and suddenly declined between 2017. The growth of rented household has increased except in 2017. In the no adults group, the growth of owner occupied has declined continuously. For rented and all tenure groups, growth rate of household increases up to 2012.

The economy, in general consists of different sectors, different in their economic behavior, nature and objectives. These sectors are broadly grouped as the government sector, the household sector and the corporate sector, each of them being linked indirectly or directly with the other two. The household sector, in its turn, can be divided into two broad types- the single-family households and the multi family households. This in turn suggests that the changes in the economic policy framework of the government of any country are expected to have implications on the household sector as well as the corporate sector of the economy.

The economic policies taken by the government are generally of two types- monetary and fiscal. The fiscal policies deal with the aspects like consumption, government expenditures and production indicators. On the other hand, the monetary policies of the government deals with the monetary and financial indicators like the rate of interest, money supply and others in the economy (Keown 2013). In this context, the flow of income or money through the different sectors of the economy, the dynamics of the flow and the implications of the monetary policies taken by the government of a country on the income flow through the above-mentioned sectors can be shown with the help of the concept of Circular Flow of Income. This can be shown as follows:

Keeping the above figure of circular flow of income in consideration, the implementation of government policies has implications on the money flows in the different sectors. For instance, if the government implements expansionary monetary policies, then the income in hand of the households tend to increase, which tend to increase the aggregate demand of the households, thereby facilitating the corporate sector as their supply also increases. The multi family, multi earner households experiences greater economic prosperity than the single earner households do. On the other due to the increase in the income of the households and increased earnings of the corporations due to the increased aggregate demand, both private savings and private investment increases, thereby indicating towards higher economic welfare of the country as a whole, provided the aggregate demand does not push up the price levels in the economy. Similar effects of greater purchasing power and more economic activities can be observed in case of implementations of expansionary fiscal policies like tax reduction and others.

However, in case of the contractionary monetary or fiscal policies, the purchasing power of the households decrease, the problem being more acute for single earning member families or families with more dependent members. Often these contractionary monetary policies are done to decrease the money supply in the economy and the contractionary fiscal policies are also undertaken in the form of increased taxes. Both of these policies decrease the aggregate demand by the households, thereby decreasing the aggregate supply of the corporations too. Thus, it can be asserted that the economic policies of the government have considerable impacts on the flow of money across the different sectors of the economy. 

References 

Keown, A.J., 2013. Personal finance. Pearson.

Ons.gov.uk. (2018). Labour Force Survey (LFS) - Office for National Statistics. [online] Available at:https://www.ons.gov.uk/surveys/informationforhouseholdsandindividuals/householdandindividualsurveys/labourforcesurveylfs [Accessed 28 Feb. 2018].