Transcript Unemployment

Unemployment
MEASURING UNEMPLOYMENT
Category of population:
 employed
 unemployed – includes people who are not
employed and fulfil specific conditions
 not in the labour force
uU
u
 100
uLF
THREE KINDS OF UNEMPLOYMENT
1.
Frictional unemployment
2.
Structural unemployment
3.
Cyclical unemployment
Other types:


seasonal unemployment
hidden unemployment
DIFFERENT VIEWS AT THE UNEMPLOYMENT
PROBLEMS


LIBERALISTS – Liberal economics
consider unemployment as expression of
short-run imbalance between the demand
for and the supply of labour
INTERVENTIONISTS – Keynesians
representatives consider unemployment to
be involuntary
CAUSES OF UNEMPLOYMENT
 period of economic recession
 launching a new technology
 saturation of the market with long durable
goods
 too high wage rate set by government as a
minimum level
DEMAND x SUPPLY
The supply of labour –
the individual supply of
labour has a special
shape – is bended
regressively, which is
causes due to two
effects:
 substitution effect
 income effect
The demand for labour –
express a normal
relationship between
the rate of wages and
amount of demanded
labour
BALANCE IN LABOUR MARKET


E – market-clearing level of wage 
labour market is
in balance
w1 – state set the minimum wage rate too high
BASIC POSSIBILITIES OF DEFEATING
UNEMPLOYMENT
1. stimulation of demand for labour from the
government
2. regulation of supply of labour
NEGATIVE IMPACTS OF UNEMPLOYMENT
 being unemployment high, the economy is
not producing up to par
 push down an efficiency of economy (state
expenditures require increase of tax rates )
 social impacts (criminality, physical and
psychological health problems, losing
qualification..)
NATURAL RATE OF UNEMPLOYMENT
 the unemployment rate at which labour and
product markets are in balance
 it’s the lowest level that can be sustained, it
thus represents the highest sustainable level
of employment and corresponds to a nation’s
potential output
 NRE rises during the time
Examples
1.
Calculate the rate of unemployment in economy,
where total number of population is 12 650 420, 48%
is included in labor force and 264 550 are registered
job applicants at labor office.
2.
Calculate the number of employed people in the
country, where the rate of unemployment is 6,4 %, as
long as 198 800 people is registered at labour office
and 260 700 are unemployed in total.