Unemployment is a state or phenomenon that occurs when a person is searching for work/job/employment and is unable to find one. It is most frequently used to measure the health of an economy.It is also the most frequently used measure of employment is the unemployment rate.
Unemployment Rate :
Number of people unemployment/Number of people in the labor force
Types of Unemployment :-
Basically, when an employed person willingly leaves his/her job in search of other employment, its called Voluntary Unemployment.
2) Involuntary Unemployment:
Whenever an employed person is fired or laid off from his/her current work, and now must look for another job, its Involuntary Unemployment.
Affect on the Economy :-
1)Unemployment financial costs —>
The greater the number of unemployed people, the more funds government has to shell out.
2) Spending Power —>
The spending power of an unemployed person decreases drastically, which ultimately affects the total economic income.
3) Recession —>
With the increase in the rate of unemployment, other economy factors such as: Income per person, health costs, quality of health care, standard of living and poverty, eat. are significantly affected.
Causes for Unemployment :-
- Some of the unemployed save enough money so that they can quit unfulfilling
- When workers move out for unrelated reasons. They become unemployed.
- One of the primary reason for youth unemployment is that they try to look for a job that fits their new skills and qualifications.
- Advancement in technologies also one of the reasons for unemployment. Because most of the workers need more training before they could actually step into the real situations.
- Job Outsourcing: Labor costs of some countries are cheaper than other countries. Plus they (the country) also have a lower cost of living.
- Excess Supply is one of the major reasons for unemployment. The technical term is Demand – Deficient unemployment, where there are fewer jobs than applicants.