Moreover, most employed individuals may opt do drop out of employment in the event they perceive employment benefits to be more viable than their income (Lalive, Vanours & Zweimüller, 2011). As a result, it is essential to verify the validity of these perceptions based on evidence from empirical data.
The United Kingdom has over the years between 2004 and 2014 been experiencing a consistent rate of unemployment (Statista, 2014). As a result, it is evident that there are significant factors that have contributed to the level of the unemployment during the period.
On the other hand, one of the consistent trends that have been witnessed in the United Kingdom labour market during the period is the allocation of unemployment benefits by the United Kingdom government (Office for National statistics, 2014). As a result, there are major possibilities that there is a correlation between the allocations of unemployment benefits in the United Kingdom and the rate of unemployment.
The study is based on empirical data gathered from the United Kingdom’s labour market.
In order to verify the effect of unemployment benefits on unemployment information regarding unemployment and unemployment data was gathered for a ten year period ranging between 2004 and 2014. Thus, in order to evaluate the reliability unemployment and unemployment another set of data that correlates with unemployment will be used. Hence, the relevant alternative set of data for the study will be based on inflation data for the relevant period of the study. This is due to the fact that most of the major unemployment levels in any labour market are caused by requirement of market forces to sustain optimum levels of inflation (Arnold, 2010 pp. 382). Whereas the rate of inflation will be necessary for this study it will be essential in outlining any other potential indicators of increase in the levels of employment in United Kingdom.