Title: Unemployment in economics
Specific purpose: To introduce the rate of unemployment through economics perspective, and the difference between structural unemployment and frictional unemployment. Central idea: The factor which influence whether we can find a job is not just depend on what kind of person we are, but also the unemployment in economics itself. Main point:
1. Main three kinds of unemployment influence the rate of unemployment. 2. The concept of classical unemployment and its relationship with economics. 3. The concept of frictional unemployment and its relationship with economics. 4. The concept of structural unemployment and its relationship with economics.
Why would you like to go into the campus for a bachelor degree or a master degree? Because you want to get a way to find a good job and win a bright future. But do you know what factors influence the rate of employment, and how can we explain the phenomenon through economics. The amount of unemployment in an economy is measured by the unemployment rate, the percentage of workers without jobs in the labour force. Unemployment can be generally broken down into several types that are related to different causes. Classical unemployment occurs when wages are too high for employers to be willing to hire more workers. Wages may be too high because of minimum wage laws or union activity. Consistent with classical unemployment, frictional unemployment occurs when appropriate job vacancies exist for a worker, but the length of time needed to search for and find the job leads to a period of unemployment. Structural unemployment covers a variety of possible causes of unemployment including a mismatch between workers' skills and the skills required for open jobs. Large amounts of structural unemployment can occur when an economy is transitioning industries and workers find their previous set of skills are no longer in demand. Structural unemployment is similar to frictional unemployment...
...1.0 INTRODUCTION TO UNEMPLOYMENTUnemployment is a situation where people have no job whether they are quitted or being fired and they are actively searching for it. There are two theories that were explained about unemployment that is Classical theory and Keynesian theory.
2.0 THEORIES THAT EXPLAIN UNEMPLOYMENT
2.1 CLASSICAL THEORY
The first theory is Classical theory. It was first developed by Karl Max. From this theory it state that the level of unemployment will increase if there is government intervention into the economy. The main reason that there is government intervention in the economy is because of want to improve the level of unemployment. Besides that, the factor of unemployment from the Classical view is the price and wages. If the price and wages are flexible, then there will be full of employment. However, in contrast, if the price and wages is not flexible like it were increase or decrease then it will cause unemployment. Therefore, prices and wages should move freely and also no government intervention in the economy in order to prevent the unemployment. Not only that, under Say’s Law which it is the basis of Classical theory is also state that there is should not have government intervention into the economy to prevent the unemployment and said that supply will create its own demand. It means that all the goods...
...Why is youth unemployment so high?
May 8th 2013, 23:50 by J.F. | NEW YORK
YOUTH unemployment is blighting a whole generation of youngsters. The International Labour Organisation estimates there are 75m 15-to-24-year-olds looking for work across the globe. But this figure excludes a large number of youngsters who do not participate in the labour market at all. Among the 34 members of the OECD, a club of rich nations, it is estimated there are 26m youths not in education, employment or training (so-called NEETs). Similarly, across the developing countries, the World Bank estimates that there are 262m such youths. All told, there are perhaps as many as 290m 15-to-24-year-olds not participating in the labour market— almost a quarter of the world’s youth, and a group almost as large as the population of America. More young people are idle than ever before. Why?
Some of these youths choose not to work. About a quarter of the 290m are south Asian women who do not work for cultural reasons. And under-24s who are working are disproportionately engaged in informal or temporary employment. In the rich world, it is estimated that a third of under-24s are on temporary contracts; in developing countries a fifth are unpaid labourers or work in the informal sector. That is better than not working at all, but is hardly cause for celebration. In total, nearly half of the world’s young are contributing to the labour market less effectively than they could...
...Australian policymakers. Despite the downward trend in the unemployment rate throughout the past decade, the government still faces many structural impediments in the labour market that prevent it from achieving its full employment objective. These difficulties can only be overcome by using a combination of macro and micro policy.
Unemployment refers to the situation where there is an underutilization of labour within the economy leading to total production levels below their maximum potential. The government will seek to decrease unemployment in an economy because of the economic opportunity of f the unused labour, as well as the negative social impact on the community of unemployment, such as increased poverty and reduced living standards.
Over the past decade Australia’s labour market has been characterized by two broad trends. The first of these is the downward trend in the unemployment rate, from highs of 10.7% in 91-92 to 4.9% in August 2006. this substantial reduction in the unemployment rate is a reflection of the decrease in cyclical unemployment. cyclical unemployment refers to those persons who have become unemployed due to a downturn in the business cycle. This decrease has been owning to Australia’s strong economic growth throughout the 1990s and into the 2000s. it is believed that any further reductions in unemployment will have to...
Provide detailed and clear explanation on the relevant macroeconomic/microeconomic variable from the article.
The article said: “The institute's report comes a day after a research body warned graduate unemployment could hit record levels as a result of planned public spending cuts. The Higher Education Careers Service said that because so many college leavers join the public sector, they were especially vulnerable to cuts.”
Graduate unemployment is unemployment among people with an academic degree. Research undertaken proved that the unemployment, and much more so, the underemployment of graduates, are devastating phenomena in the lives of graduates and a high incidence of either, are definite indicators of institutional ineffectiveness and inefficiency.
Since the start of the economic recession in the US economy in 2007, increasing numbers of graduates have been unable to find permanent positions in their chosen field. Underemployment among graduates is high. Educated unemployment or underemployment is due to a mismatch between the aspirations of graduates and employment opportunities available to them.
It was found that two factors are important regarding graduate unemployment or underemployment, namely incidence and duration. The duration of graduate unemployment in particular, appears to be a sharply declining...
Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force.
http://investopedia.com/terms/u/unemployment.asp#ixzz2NJ3XTGJRUnemployment causes many problems for the whole society
YEAR | PERCENTAGE | PEOPLE |
1966-1972 | Less than 2% | 4000 |
1973-1981 | From 2%-6% | 80,000 |
1982-1983 | 28% | From 88,000-189,000 |
The economic recovery in the last 6 months of 1983 became much stronger over a long period of time. Employment grew by almost 1.6 million between August 1983 and August 1990, which then left a average annual growth rate of 3% .Because of the strong economic recovery over time it continued until 1988 leaving high levels. Between August 1983 and August 1988, employment grew by 1.1 million, yet the number of long-term unemployed fell by only 36,000 to 153,000.
YEAR | PERCENTAGE | PEOPLE |
1983-1988 | 28% | 189,000 fell to 153,000 |
Women aged between 35-44 years old had an advantage over the strong employment growth, The labour force participation rate of women in this age group rose from 57% to 71% between August 1983 and August 1990 and the number employed increased...
Nowadays, some of the macroeconomics and policy makers assume that unemployment and inflation are too bad, because both of this factor able to reduce social welfare (Ruprah & Luengas, 2011). The growth and shocks in unemployment may be able to reduce of this deregulation of monetary policy that has been followed with high volume of growth (Eatwell, 2000). Among industrial and developed countries, long-term trends inunemployment since the world war show a distinct break in 1970s and up to that time unemployment rates were at historically low level. According to Marglin and Schor (1990), the low rate of unemployment is not reasonable to discuss about the full employment or ‘golden age’ because the capitalist economic system has grew even faster than expected in the early stage. The most attracting development issue in developing country in the recent modern economic is the lasting unemployment rate.
The unemployment rate can be defined as the number of people actively looking for a job divided by the labour force. Changes in unemployment depend mostly on inflows made up of non-employed people starting to look for jobs, of employed people who lose their jobs and look for new ones and of people who stop looking for employment. In almost any economy at almost any time, many individuals appear to be unemployed. That...
...toward Lowering Unemployment
In the last years, there has been a lot of discussions regarding the future economy. We have experienced a period of strong turbulences in the world’s economy, especially in the United States of America. The outcomes of such catastrophes are high interest rates, higher rate of unemployment and many different setbacks in particular in a number of European country. If we lived in free markets these difficulties would have been, probably, overcome in time. However, our economy is partially regulated by the government, who normally tries to find an equilibrium as soon as possible. One of the recurring problems that governments have been trying to solve, is lowering the percentage of people that are unemployed in the country; in other words, improve the overall economy of the nation the government is governing. Usually, when the percentage of unemployed people increases the government analyzes the situation and enacts polices to tackle the problem that arose. There are two main strategies for reducing overall unemployment, the first and the most important one in these days, is to use policies that affect the demand side to reduce demand-deficient unemployment; the second is to look at supply side polices to reduce structural unemployment. Demand-deficient unemployment is a situation in which there is insufficient demand in the economy to maintain full employment....
...and Effects of Unemployment
Causes and Effects of Unemployment
There are many reasons for unemployment in the United States and around the world. Some of these causes are created by the individual and others are out of their control. No matter what the cause for unemployment, it has a devastating effect on the individual, family, and economy.Unemployment defined by the Encyclopedia Britannica is the condition of one who is capable of working, actively seeking work, but is unable to find any work. In addition, to define a person as unemployed, the person must be an active member of the labor force in search of work. (Encyclopedia Britannica, 2012) Unemployment can be caused by several different factors. Depending on the reasons for unemployment, they are classified as such: frictional, structural, and cyclical. There will always be a certain number of people that are frictionally or structurally unemployed due to varying reasons in the economy. Frictional and structural unemployment are usually specific to a person or small region, however, cyclical unemployment only happens when an economy is in a downturn. It signifies a decrease in the gross domestic product or GDP. Unemployment affects not only the unemployed but also society as a whole and the effects...