Effects of Unemployment on Economy

Unemployment Classification of Unemployment Causes Effects of Unemployment Measures of Unemployment Unemployment and Economic Growth Solutions

Contents

Unemployment refers to thesituation in which the workers do not get employment.

Unemployment

Classification of Unemployment

Unemployment

Involuntary

Voluntary

Disguised

Demand Deficiency

Seasonal

Structural

Frictional

Unemployment that results when resources decide to leave one job often in search of another.

Voluntary Unemployment

The contrast to voluntary unemployment is involuntary unemployment in which resources are forced out of work , also known as Forced Unemployment.

Involuntary Unemployment

It results because it takes time for workers to search for the jobs that best suit their tastes and skills.

Frictional Unemployment

Structural Unemployment arises because the number of jobs available are insufficient.

Structural Unemployment

Seasonal unemployment occur when an occupation is not in demand at certain season.

Seasonal Unemployment

It arises when people are out of work because of lack of aggregate demand.

Unemployment due to Demand Deficiency

 When people do not have productive full-time employment, but are not counted in the official unemployment statistics.

Disguised Unemployment

High Population Growth Absences of employment opportunities Increasing turnout of students from universities Slow developing industries Inflation Recession Changes in technology Willingness to work Disability Discriminating factors

Causes of unemployment

ECONOMIC EFFECT1. Wastage of human resources2. Low income3. Low saving4. Low capital formation5. Low living standard6. Low lobour productivity

Effects of Unemployment

Social Effect1. Wide gap between rich and poor\class conflicts2. Social unrest3. More illegal activities

Effects of Unemployment

At Individual Level1. Mental stress2. Loss of self esteem3. Directly linked to poverty

Effects of Unemployment

Employed Any person 16 years old or older 1. who works for pay, either for someone else or in his

or her own business for 1 or more hours per week,2. who works without pay for 15 or more hours per

week in a family enterprise, or 3. who has a job but has been temporarily absent

with or without pay. Unemployed A person 16 years old or older who is

not working, is available for work, and has made specific efforts to find work during the previous 4 weeks.

Measuring Unemployment

Encouragement to small enterprises Subsidies on the basis of employment Encouragement of new growth centers in small towns

and rural areas

Solutions

Increased government expenditure Lower taxation Lower interest rates Employment subsidies

Unemployment can be Reduced by

CONCLUSION

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