Unemployment
Types of unemployment
Cyclical Unemployment
Seasonal Unemployment
Labour Market Equilibrium
Caused by lack of demand of goods & service during economic slowdown
Structural Unemployment
Frictional Unemployment
Caused by mismatch of skills of worker required for jobs
Caused by search time required by workers to enter or change jobs
Caused by routine changes in the demand for certain kinds of labour
Economic Indicators
Unemployment Rate
Labour Force Participation Rate
(Labour Force/Working
Age Population) x 100
(No. of people unemployed/
Labour Force) x 100
Labour demand and labour supply are equal.
Cost of unemployment
Personal
Social
Economic
Loss of income
Political/social unrest
Underutilizing resources
Full Employment
No cyclical unemployment
Economy is using all its
existing resources to produce at its potential GDP
Not the same as zero unemployment (There is still frictional & structural unemployment)
Changes in Labour Market
Labour Demand
Labour Supply
Non-wage factors affecting labour demand will cause a shift of the labour demand curve.
Non-wage factors affecting labour supply will cause a shift of the labour supply curve.
Reducing Unemployment
Enhance availability of information
Job Creation
Improve Employability
Enhance skillset through education and training
Provide platforms which job seekers can find information of vacancy
Tax incentives or government grants to attract companies to set up their business in the country.
Definition
The number of workers who are able and willing to work exceeds the number of jobs available.
The supply of labour exceeds the
demand for labour in the labour market.