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CH 9: Unemployment - Coggle Diagram
CH 9: Unemployment
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- refers to the number of people of legal working age who are willing and able to work but are unable to find suitable employment
- unemployment rate = (number of unemployed / number employed + number unemployed)
- labour force participation rate = (labour force / working age population )
voluntary unemployment: those who do not want to work at the going wage rate (not a part of the calculation of the unemployment rate of a country)
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natural employment: (frictional unemployment + structual unemployment) always exist and prevent the unemployment rate to reach 0 (in singapore is 2% to 3%)
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developed countries
- structural unemployment due to competition from newly industrialised countries or emerging economies
- cyclical unemployment due to greater integration with the global economy and thus reliance on external demand
- technological unemployment due to their relatively more rapid advancement in technology, more susceptible to technological unemployment as labour-intensive jobs are easily replaced by advanced and more efficient machinery or relatively capital intensive process
less developed countries
- frictional unemployment due to poor transport and communication systems (regional unemployment), poor government planning and co-ordination
- seasonal unemployment due to these economies predominantly being agricultural-based are affected by seasonal demand or climatic conditions
- imported cyclical unemployment as the developed countries are their principal exports markets, and hence when the developed countries are facing cyclical unemployment, these less developed countries are affected too
- demand deficient unemployment due to general low level of demand and output, vicious circle of poverty where low incomes lead to low savings and low consumption, leads to low demand and low investment, which in turn causes low productivity and low economic growth, resulting in incomes remaining low.