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5. (a) Outline two possible effects on the Irish economy of high levels of youth unemployment - Leaving Cert Economics - Question 5 - 2016
Question 5
5. (a) Outline two possible effects on the Irish economy of high levels of youth unemployment. (i) (ii) (b) State one economic policy the government could intro... show full transcript
Worked Solution & Example Answer:5. (a) Outline two possible effects on the Irish economy of high levels of youth unemployment - Leaving Cert Economics - Question 5 - 2016
Step 1
Outline two possible effects on the Irish economy of high levels of youth unemployment: (i)
Answer
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Increase Government Expenditure: High levels of youth unemployment can lead to increased government expenditure due to higher social welfare payments. As more young people become reliant on state support, the government must allocate more resources to welfare schemes, thereby diverting funds from other potentially productive investments.
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Reduction in Government Revenue: As youth unemployment rises, fewer individuals contribute to taxes due to lack of employment, leading to a reduction in government revenue. This can create a fiscal imbalance, making it challenging for the government to fund essential public services.
Step 2
Outline two possible effects on the Irish economy of high levels of youth unemployment: (ii)
Answer
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Emigration: Young individuals may seek better opportunities abroad, causing a ‘brain drain’ effect, which can lead to a loss of skilled labor in the Irish economy. This migration can detrimentally impact local communities and lead to a decline in economic growth.
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Increased Pressure on Public Services: The rise in unemployment among youth can place additional pressure on public services, as those unemployed may require more health and social services. This could overstretch existing systems and require increased government intervention.
Step 3
State one economic policy the government could introduce to reduce youth unemployment.
Answer
The government could reduce the minimum wage for younger workers. This policy would help reduce costs for businesses, potentially encouraging them to hire younger workers who are often less experienced. This initiative may stimulate job creation and provide young unemployed individuals with an opportunity to gain valuable work experience.