-project-on-unemployment by clayd and mercedes.doc

8/11/2019 -project-on-unemployment by clayd and mercedes.doc

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The first published use of the term "macroeconomics" was bytheNorwegian Economist Ragnar Frisch in 1933and before this,there already was an effort to understand many of the broad elementsof the field

Ragnar FrischRagnar Frisch

DEFINATION OF MACROECONOMICS:DEFINATION OF MACROECONOMICS: !acroeconomics is a branch of economics that deals with theperformance, structure and behaior of a national or a regionaleconomy as a whole #ince the 193$s economists hae split theireconomics into two parts

Economics is diided into two main diisions !icroeconomics

!acroeconomics

MICROECONOMICS :MICROECONOMICS :


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!icroeconomics is primarily focused on the actions ofindiidual agents, such as firms and consumers, and how theirbehaior determines prices and %uantities in specific mar&ets

!icroeconomics focuses on the '(hat)" and "For (hom)"%uestions *t e+amines how a society decides to produce the bundleof goods and serices it does the "what" %uestion-, and who getsthese goods and serices the "for whom" %uestion- *t e+plores howarious systems of incenties and ways of ma&ing decisions such as"dollar oting" or arious forms of political oting- wor& to solethe "what" and "for whom" %uestions .entral in much of thise+amination is the concept of economic efficiency

MACROECONOMICS:-MACROECONOMICS:- !acroeconomics deals with topics of inflation and

unemployment !acroeconomists study aggregated indicators suchas /0, unemployment rates and price indices to understand howthe whole economy functions !acroeconomists deelop modelsthat e+plain the relationship between such factors as national

income, output, consumption, unemployment, inflation, saings,inestments, international trade and international finance

!acroeconomics is a broad field of study,howeer, there aretwo ma2or areas of research in !acroeconomicsThe attempt to understand the causes and conse%uences of short4

run fluctuations in national income the business cycle-The attempt to understand the determinants of long4run economic

growth increases in national income-!acroeconomic models and their forecasts are used by both

goernments and large corporations to assist in thedeelopment and ealuation of economic policy and business strategy


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DEFINATION:DEFINATION:

5nemployment is the state in which a person is without wor&,aailable to wor&, and is currently see&ing wor& *t is a situationwhere there is non4aailability of 2ob for the persons *ts is ansituation in which a person who is physically capable, mentally

willing to wor& at e+isting wage rate does not find any 2ob and isforced to remain unemployed

INTRODUCTION:INTRODUCTION:


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*t inoles a waste of human resource and results in many social

eils li&e theft, pic&4 poc&eting, robbery, murder etc *t6s a seriouseconomic, social and political problem of the country *t6s a cause as

well as effect of poerty The unemployment rate is used in economicstudies Rate is determined as the percentage of those in the laborforce without 2obs

There are a ariety of different causes of unemployment, anddisagreement on which causes are most important 0ifferent schoolsof economic thought suggest different policies to addressunemployment !onetarists for e+ample, beliee that controlling

inflation to facilitate growth and inestment is more important, andwill lead to increased employment in the long run 7eynesians on theother hand emphasi8e the smoothing out of business cycles bymanipulating aggregate demand

There is also disagreement on how e+actly to measureunemployment For e+ample, the conseratie goernment, when inpower in the 5nited 7ingdom, changed the way in which employment

was measured seeral times Each time, the figure reduced #ocialTrends- 0ifferent countries e+perience different leels ofunemployment the 5#: currently e+periences lower unemploymentleels than the European 5nion, and it also changes oer time egthe /reat depression- throughout economic cycles


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;*


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Calendar GMT Country Event Reference Actual Previous Consensus Forecast

2013-09-10 03:30 AM PhilippinesUnemployment Rate Q2 2013 7.3% 7.5% 7.7%

2013-12-10 04:30 AM PhilippinesUnemployment Rate Q3 2013 6.5% 7.3% 7.4%

2014-03-11 01:00 AM PhilippinesUnemployment Rate Q4 2013 7.5% 6.5% 7%

2014-06-10 02:00 AM PhilippinesUnemployment Rate Q1 2014 7% 7.5% 7.5%

2014-12-10 01:00 AM PhilippinesUnemployment Rate Q3 2014 6.7% 6.1%

Labour Last Previous Highest Lowest Unit

Unemployment Rate 6.70 7.00 13.90 6.30 Percent [+]

Employed Persons 38665.00 36420.00 38665.00 18567.00 Thousand [+]

Unemployed Persons 2924.00 2969.00 4989.00 1720.00 Thousand [+]

Job Vacancies 319720.00 199942.00 319720.00 3036.00 [+]

Labor Force Participation Rate 65.20 63.80 94.70 63.20 Percent [+]

Wages 8280.00 7995.00 8280.00 5798.00 PHP [+]

Wages in Manufacturing 1026.35 1316.09 1412.89 638.86 Index Points [+]

Population 97.35 95.77 97.35 26.27 Million [+]
http://www.tradingeconomics.com/philippines/unemployment-ratehttp://www.tradingeconomics.com/philippines/unemployment-ratehttp://www.tradingeconomics.com/philippines/employed-personshttp://www.tradingeconomics.com/philippines/employed-personshttp://www.tradingeconomics.com/philippines/unemployed-personshttp://www.tradingeconomics.com/philippines/unemployed-personshttp://www.tradingeconomics.com/philippines/job-vacancieshttp://www.tradingeconomics.com/philippines/job-vacancieshttp://www.tradingeconomics.com/philippines/labor-force-participation-ratehttp://www.tradingeconomics.com/philippines/labor-force-participation-ratehttp://www.tradingeconomics.com/philippines/wageshttp://www.tradingeconomics.com/philippines/wageshttp://www.tradingeconomics.com/philippines/wages-in-manufacturinghttp://www.tradingeconomics.com/philippines/wages-in-manufacturinghttp://www.tradingeconomics.com/philippines/populationhttp://www.tradingeconomics.com/philippines/populationhttp://www.tradingeconomics.com/philippines/unemployment-ratehttp://www.tradingeconomics.com/philippines/unemployment-ratehttp://www.tradingeconomics.com/philippines/employed-personshttp://www.tradingeconomics.com/philippines/employed-personshttp://www.tradingeconomics.com/philippines/unemployed-personshttp://www.tradingeconomics.com/philippines/unemployed-personshttp://www.tradingeconomics.com/philippines/job-vacancieshttp://www.tradingeconomics.com/philippines/job-vacancieshttp://www.tradingeconomics.com/philippines/labor-force-participation-ratehttp://www.tradingeconomics.com/philippines/labor-force-participation-ratehttp://www.tradingeconomics.com/philippines/wageshttp://www.tradingeconomics.com/philippines/wageshttp://www.tradingeconomics.com/philippines/wages-in-manufacturinghttp://www.tradingeconomics.com/philippines/wages-in-manufacturinghttp://www.tradingeconomics.com/philippines/populationhttp://www.tradingeconomics.com/philippines/population


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Labour Last Previous Highest Lowest Unit

Une%&loy%ent 'ate 'e(erence Previous Highest Lowest Unit

Australia 6.10 Aug)1! 6.!0 10.0 !.00 Percent *+,

-rail /.00 Aug)1! !.0 13.10 !.30 Percent *+,

anaa 7.00 Aug)1! 7.00 13.10 #.0 Percent *+,

hina !.10 2un)1! !.10 !.30 3.0 Percent *+,

uro Area 11./0 Aug)1! 11./0 1#.00 7.#0 Percent *+,

France 10.#0 4ay)1! 10.10 10.50 7.#0 Percent *+,

er%any !.0 Aug)1! !.0 1!.#0 0.!0 Percent *+,

nia /.#0 Dec)1# 6.30 .!0 /.#0 Percent *+,

nonesia /.70 Fe8)1! 6.17 11.#! #.00 Percent *+,

taly 1#.30 Aug)1! 1#.60 1#.50 /.0 Percent *+,

2a&an 3./0 Aug)1! 3.50 /.60 1.00 Percent *+,

4e9ico /.15 Aug)1! /.!7 /.3 #.## Percent *+,

:etherlans 5.00 Aug)1! 5.#0 5.50 3.!0 Percent *+,

'ussia !.50 Aug)1! !.0 1!.10 !.50 Percent *+,
http://www.tradingeconomics.com/australia/unemployment-ratehttp://www.tradingeconomics.com/australia/unemployment-ratehttp://www.tradingeconomics.com/brazil/unemployment-ratehttp://www.tradingeconomics.com/brazil/unemployment-ratehttp://www.tradingeconomics.com/canada/unemployment-ratehttp://www.tradingeconomics.com/canada/unemployment-ratehttp://www.tradingeconomics.com/china/unemployment-ratehttp://www.tradingeconomics.com/china/unemployment-ratehttp://www.tradingeconomics.com/euro-area/unemployment-ratehttp://www.tradingeconomics.com/euro-area/unemployment-ratehttp://www.tradingeconomics.com/france/unemployment-ratehttp://www.tradingeconomics.com/france/unemployment-ratehttp://www.tradingeconomics.com/germany/unemployment-ratehttp://www.tradingeconomics.com/germany/unemployment-ratehttp://www.tradingeconomics.com/india/unemployment-ratehttp://www.tradingeconomics.com/india/unemployment-ratehttp://www.tradingeconomics.com/indonesia/unemployment-ratehttp://www.tradingeconomics.com/indonesia/unemployment-ratehttp://www.tradingeconomics.com/italy/unemployment-ratehttp://www.tradingeconomics.com/italy/unemployment-ratehttp://www.tradingeconomics.com/japan/unemployment-ratehttp://www.tradingeconomics.com/japan/unemployment-ratehttp://www.tradingeconomics.com/mexico/unemployment-ratehttp://www.tradingeconomics.com/mexico/unemployment-ratehttp://www.tradingeconomics.com/netherlands/unemployment-ratehttp://www.tradingeconomics.com/netherlands/unemployment-ratehttp://www.tradingeconomics.com/russia/unemployment-ratehttp://www.tradingeconomics.com/russia/unemployment-ratehttp://www.tradingeconomics.com/australia/unemployment-ratehttp://www.tradingeconomics.com/australia/unemployment-ratehttp://www.tradingeconomics.com/brazil/unemployment-ratehttp://www.tradingeconomics.com/brazil/unemployment-ratehttp://www.tradingeconomics.com/canada/unemployment-ratehttp://www.tradingeconomics.com/canada/unemployment-ratehttp://www.tradingeconomics.com/china/unemployment-ratehttp://www.tradingeconomics.com/china/unemployment-ratehttp://www.tradingeconomics.com/euro-area/unemployment-ratehttp://www.tradingeconomics.com/euro-area/unemployment-ratehttp://www.tradingeconomics.com/france/unemployment-ratehttp://www.tradingeconomics.com/france/unemployment-ratehttp://www.tradingeconomics.com/germany/unemployment-ratehttp://www.tradingeconomics.com/germany/unemployment-ratehttp://www.tradingeconomics.com/india/unemployment-ratehttp://www.tradingeconomics.com/india/unemployment-ratehttp://www.tradingeconomics.com/indonesia/unemployment-ratehttp://www.tradingeconomics.com/indonesia/unemployment-ratehttp://www.tradingeconomics.com/italy/unemployment-ratehttp://www.tradingeconomics.com/italy/unemployment-ratehttp://www.tradingeconomics.com/japan/unemployment-ratehttp://www.tradingeconomics.com/japan/unemployment-ratehttp://www.tradingeconomics.com/mexico/unemployment-ratehttp://www.tradingeconomics.com/mexico/unemployment-ratehttp://www.tradingeconomics.com/netherlands/unemployment-ratehttp://www.tradingeconomics.com/netherlands/unemployment-ratehttp://www.tradingeconomics.com/russia/unemployment-ratehttp://www.tradingeconomics.com/russia/unemployment-rate


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Une%&loy%ent 'ate 'e(erence Previous Highest Lowest Unit

;outh ey .10 2un)1! 5.50 16.10 5.00 Percent *+,

Unite


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VOLUNTARY UNEMPLOYMENT:VOLUNTARY UNEMPLOYMENT:

There are some persons in a society who for arious reasons

prefer to remain 2obless een though there are possibilities of getting2ob some hae the desire to hae 2obs only of their li&ing or giingbetter remuneration than that in the earlier 2obs and therefore theyprefer to remain unemployed #uch a &ind of unemployment isreferred to as @= 5NE!!ENT

InInVOLUNTARY UNEMPLOYMENT:VOLUNTARY UNEMPLOYMENT:

*noluntary unemployment is a situation where a person isphysically and mentally fit to wor& and also willing to wor& ate+isting wage rate, but does not get a 2ob ;e is forced to remain idleeen if he is willing to wor&

Volunar! An" In#olunar! Un$%&lo!%$nVolunar! An" In#olunar! Un$%&lo!%$n


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RURAL UNEMPLOYMENT:RURAL UNEMPLOYMENT:

This &ind of employment preails ion rural areas The nature ofproblem is also complicated There are only two types ofunemployment commonly found in agricultural economy eg *ndia

A'A'SEASONAL UNEMPLOYMENT:SEASONAL UNEMPLOYMENT: *n an agrarian economy li&e *ndia, seasonal unemployment is themost significant type of unemployment in rural sector :griculturelabour in *ndia is mostly dependent on monsoon

('('DIS)UISED UNEMPLOYMENT:DIS)UISED UNEMPLOYMENT:


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*n the rural subsistence agrarian sector of the *ndian economy,the problem of disguised unemployment is also typical 0isguisedunemployment refers to that type of unemployment in which laborers

appear to be wor&ing and employed but in reality, they are notemployed as they do not add to the total output *n other words theyare remoed from their 2obs, output would not decrease

UR(AN UNEMPLOYMENT:UR(AN UNEMPLOYMENT:

This type of unemployment is found in urban areas ie towns andcities

*' In"usrial Un$%&lo!%$n: This refers to unemployment amongst wor&ers in industriesand factories in urban areas *ndustrial wor&ers may be s&illed oruns&illed *ndustrial is open unemployment

+' E"uca$" Un$%&lo!%$n: *t is the problem of educated middle class people of urban

society *t means 2oblessness amongst the graduates, post graduates,doctors, engineers etc ;oweer this type of unemployment does note+ist in countries world wide This are specific type of unemploymentthat e+ist only in few countries especially those in inoled inagricultural actiities li&e *ndia Economists distinguish between fiema2or types of unemployment, ie, cyclical, frictional, structural andclassical Real4world unemployment may combine different types,

while all four might e+ist at one time


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CYCLICAL UNEMPLOYMENT:CYCLICAL UNEMPLOYMENT:

This type of unemployment e+ists due to inade%uate effectieaggregate demand *t gets its name because it aries with thebusiness cycle, though it can also be persistent, as during the /reat0epression of the 193$s /ross domestic product is not as high aspotential output because of demand failure, due to say- pessimisticbusiness e+pectations which discourages priate fi+ed inestmentspending


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;oweer, it accepts the theory to some e+tent as full employmentcan neer be reached

FRICTIONAL UNEMPLOYMENT:FRICTIONAL UNEMPLOYMENT:

This unemployment inoles people in the midst of transitingbetween 2obs, searching for new ones it is compatible with fullemployment *t is sometimes called search unemployment and canbe oluntary New entrants such as graduating students- and re4entrants such as former homema&ers- can also suffer a spell offrictional unemployment

Frictional unemployment e+ists because both 2obs and wor&ersare heterogeneous, and a mismatch can result between thecharacteristics of supply and demand #uch a mismatch can berelated to s&ills, payment, wor& time, location, attitude, taste, and amultitude of other factors (or&ers as well as employers accept acertain leel of imperfection, ris& or compromise, but usually notright away they will inest some time and effort to find a better

match This is in fact beneficial to the economy since it results in abetter allocation of resources ;oweer, if the search ta&es too longand mismatches are too fre%uent, the economy suffers, since somewor& will not get done Therefore, goernments will see& ways toreduce unnecessary frictional unemployment

Frictional unemployment coincides with an e%ual number ofacancies Numerically, it is therefore ma+imal when the labour

mar&et is in e%uilibrium (hen for instance demand far e+ceedssupply, the frictionally unemployed will be few as they will get many2ob offers


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STRUCTURAL UNEMPLOYMENT:STRUCTURAL UNEMPLOYMENT:

5nemployment which occurs due to fundamental changes inthe structure of economy, is called structural unemployment!ainly these are the changes in population, goernment policies,technology etc /enerally, it is found in deeloping economies *ts ischronic unemployment *t is long term phenomena

CLASSICAL UNEMPLOYMENT:CLASSICAL UNEMPLOYMENT:

*n this case, li&e that of cyclical unemployment, the number of2ob4see&ers e+ceeds the number of acancies ;oweer, theproblem here is not aggregate demand failure *n this situation,real wages are higher than the mar&et4e%uilibrium wage *n simpleterms, institutions such as "the minimum wage" deter employersfrom hiring all of the aailable wor&ers, because the cost woulde+ceed the technologically4determined benefit of hiring them themarginal product of labour- #ome economists theori8e that thistype of unemployment can be reduced by increasing the fle+ibility

of wages eg, abolishing minimum wages or employeeprotection-, to ma&e the labor mar&et more li&e a financial mar&et


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,IDDEN UNEMPLOYMENT:,IDDEN UNEMPLOYMENT:

;idden, or coered, unemployment is the unemployment of

potential wor&ers that is not reflected in official unemploymentstatistics, due to the way the statistics are collected *n manycountries only those who hae no wor& but are actiely loo&ing forwor& andAor %ualifying for social security benefits- are counted asunemployed Those who hae gien up loo&ing for wor& andsometimes those who are on /oernment "retraining"programmes- are not officially counted among the unemployed,

een though they are not employed The same applies to those whohae ta&en early retirement to aoid being laid off, but would preferto be wor&ing The statistic also does not count the"underemployed" 4 those with part time or seasonal 2obs who wouldrather hae full time 2obs Because of hidden unemployment,official statistics often underestimate unemployment rates


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5nemployment leels are increasing dramatically in many partsof the world There is considerable debate among economists as tothe causes of unemployment 7eynesian economics emphasi8esunemployment resulting from insufficient effectie demand for

goods and serice in the economy =thers point to structuralproblems, inefficiencies, inherent in labour mar&ets .lassicaleconomics tends to re2ect these e+planations, and focuses more onrigidities imposed on the labor mar&et from the outside, such asminimum wage laws, ta+es, and other regulations that maydiscourage the hiring of wor&ers *n the set up of a modern mar&et economy, there are manyfactors, which contribute to unemployment .auses of unemploymentare aried and it may be due to the following factors

Ra&i" chang$s in $chnolog!Ra&i" chang$s in $chnolog!


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R$c$ssionsR$c$ssions

InaionInaion


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Disa.ili!Disa.ili!

Un"ulaing .usin$ss c!cl$sUn"ulaing .usin$ss c!cl$s


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Chang$s in as$s as /$ll as al$raions in h$ cli%aicChang$s in as$s as /$ll as al$raions in h$ cli%aic

con"iions0 This %a! in urn l$a" o "$clin$ in "$%an" 1orcon"iions0 This %a! in urn l$a" o "$clin$ in "$%an" 1orc$rain s$r#ic$s as /$ll as &ro"ucs0c$rain s$r#ic$s as /$ll as &ro"ucs0

Aiu"$ o/ar"s $%&lo!$rsAiu"$ o/ar"s $%&lo!$rs


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2illingn$ss o /or32illingn$ss o /or3

P$rc$&ion o1 $%&lo!$$sP$rc$&ion o1 $%&lo!$$s


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Discri%inaing 1acors in h$ &lac$ o1 /or3 4%a! inclu"$Discri%inaing 1acors in h$ &lac$ o1 /or3 4%a! inclu"$

"iscri%inaion on h$ .asis o1 ag$5 class5 $hnici!5 color an""iscri%inaion on h$ .asis o1 ag$5 class5 $hnici!5 color an"rac$'0rac$'0


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A.ili! o loo3 1or $%&lo!%$nA.ili! o loo3 1or $%&lo!%$n

Po&ulaionPo&ulaion


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5nemployment has obious and well4documented lin&s toeconomic disadantage and has also been connected in somediscussion to higher crime rates especially among the young suicide,and homicide /arry =ttosen and 0ouglas Thompson 199C- broadenthe conse%uences of unemployment, relating it to increases in theincidences of alcoholism, child abuse, family brea&down, psychiatrichospitali8ation, and a ariety of physical complaints and illnesses#ome researchers hae emphasi8ed the importance of preentingyouth from falling into unemployment traps Robert /itter and!ar&us #cheuer 199D- suggest that unemployment among youth not


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only causes current hardship, but may also hinder future economicsuccess This is because unemployed youths are not able to gaine+perience and on4the42ob training and because a history of

2oblessness signals that the indiidual may not hae the %ualities thatare alued in the labour mar&et

:ttempts hae, howeer, been made to estimate the economic costassociated with unemployment =ttosen and Thompson 199C, p-noted that "the 5nited #tates loses a little less than one percentagepoint of potential gross domestic product /0- or output for eachone percentage point of unemployment This implies that an

unemployment rate of D percent costs the 5nited #tates at least G$$billion annually in foregone output This is more than ?,$$$ foreery man, woman, and child oer 1C years of age" #imilarly, in:ustralia, eter 7enyon 199H- calculated that the loss of /0associated with an unemployment rate aboe the full4employmentrate is the e%uialent of one yearIs worth of /0 oer the past twodecades

*n addition to the loss of /0, high unemployment increases theburden on social welfare programs These include unemploymentinsurance programs and other types of welfare, such as food stamps,!edicaid, !edicare, and #upplemental #ecurity *ncome =ttosenand Thompson 199C- There are also intergenerational effects, asunemployment of parents will limit their capacity to finance theschooling of their children :s education is the primary means of

social mobility, this intergenerational effect will gie rise to aninheritance of ine%uality

5nemployment rates


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region 5nemployment rate

region 5nemployment rate

North :merica !iddle East

.anada CH *srael HH

5nited #ates G$ Tur&ey D3

#outhA.entral :merica5nited :rabEmirates

?3

:rgentina 1$ :frica

.hile H3 Egypt H1

.olombia ?$ #uriname 1G$

.osta Rica ? :lgeria ?9H

eru DG Tunisia 1C

Europe :sia


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France 9C 7orea, Republicof

G1

/ermany D9 Japan GD

*taly 1$ hilippines 1$1

Netherlands 33 #ingapore GG

#weden GD #ri


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oland 1C1

Romania D1

To many economists, persistent unemployment is a sign ofmar&et failure because unemployment is a waste of scarce resourcesand leads to a loss of potential output and a reduction in allocatieefficiency The economy is operating below the ma+imum output it

could achiee This might be illustrated by ma&ing use of a F orusing the concept of the output gap


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Un$%&lo!%$n Ra$ .! Sa$: +6675 +6685 an"Un$%&lo!%$n Ra$ .! Sa$: +6675 +6685 an"+669+669

.ountry ?$$3 ?$$G ?$$

5nited #tates C$L L 1L

:labama H C G$

:las&a DD D CH

:ri8ona D $ GD

:r&ansas 9 D G9
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!ontana GG GG G$

Nebras&a G$ 3H 3H

Neada 1 G3 G1New

;ampshireG 3H 3C

New Jersey 9 GH GG

New !e+ico 9 D 3

New >or& CG H $

North .arolina C ?

North 0a&ota 3CL 3GL 3GL

=hio C? C1 9

=&lahoma C GH GG

=regon H1 DG C1

ennsylania D $

hilippines 1?$ 1$C 113

Rhode *sland G ? $

#outh .arolina CD CH CH

#outh 0a&ota 3 3 39

Tennessee G C Te+as CD C1 3

5tah D ? G3

@ermont G 3D 3

@irginia G1 3D 3
http://www.infoplease.com/ipa/A0108237.htmlhttp://www.infoplease.com/ipa/A0108240.htmlhttp://www.infoplease.com/ipa/A0108242.htmlhttp://www.infoplease.com/ipa/A0108244.htmlhttp://www.infoplease.com/ipa/A0108244.htmlhttp://www.infoplease.com/ipa/A0108246.htmlhttp://www.infoplease.com/ipa/A0108250.htmlhttp://www.infoplease.com/ipa/A0108252.htmlhttp://www.infoplease.com/ipa/A0108254.htmlhttp://www.infoplease.com/ipa/A0108256.htmlhttp://www.infoplease.com/ipa/A0108258.htmlhttp://www.infoplease.com/ipa/A0108260.htmlhttp://www.infoplease.com/ipa/A0108262.htmlhttp://www.infoplease.com/ipa/A0108264.htmlhttp://www.infoplease.com/ipa/A0108266.htmlhttp://www.infoplease.com/ipa/A0108268.htmlhttp://www.infoplease.com/ipa/A0108270.htmlhttp://www.infoplease.com/ipa/A0108274.htmlhttp://www.infoplease.com/ipa/A0108277.htmlhttp://www.infoplease.com/ipa/A0108279.htmlhttp://www.infoplease.com/ipa/A0108281.htmlhttp://www.infoplease.com/ipa/A0108283.htmlhttp://www.infoplease.com/ipa/A0108237.htmlhttp://www.infoplease.com/ipa/A0108240.htmlhttp://www.infoplease.com/ipa/A0108242.htmlhttp://www.infoplease.com/ipa/A0108244.htmlhttp://www.infoplease.com/ipa/A0108244.htmlhttp://www.infoplease.com/ipa/A0108246.htmlhttp://www.infoplease.com/ipa/A0108250.htmlhttp://www.infoplease.com/ipa/A0108252.htmlhttp://www.infoplease.com/ipa/A0108254.htmlhttp://www.infoplease.com/ipa/A0108256.htmlhttp://www.infoplease.com/ipa/A0108258.htmlhttp://www.infoplease.com/ipa/A0108260.htmlhttp://www.infoplease.com/ipa/A0108262.htmlhttp://www.infoplease.com/ipa/A0108264.htmlhttp://www.infoplease.com/ipa/A0108266.htmlhttp://www.infoplease.com/ipa/A0108268.htmlhttp://www.infoplease.com/ipa/A0108270.htmlhttp://www.infoplease.com/ipa/A0108274.htmlhttp://www.infoplease.com/ipa/A0108277.htmlhttp://www.infoplease.com/ipa/A0108279.htmlhttp://www.infoplease.com/ipa/A0108281.htmlhttp://www.infoplease.com/ipa/A0108283.html


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(ashington DG C?

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The natural rate of unemployment is the rate of unemploymentwhere the labour mar&et is in a position of e%uilibrium This meansthat the labour supply M labour demand at a gien real wage rate:ll

those people willing and able to ta&e paid employment at the goingwage rate do so

The diagram below shows the labour supply those willing andable to ta&e wor& at a going wage rate- and the labour force 4 thenumber of actie participants in the labour mar&et The labour forcee+pands as the real wage rises because there is a greater incentie tosearch for paid wor& and sacrifice leisure

Employment on the +4a+is measures the total labour hourssupplied by wor&ers in the economy in a gien time period :s thereal wage increases, the total number of hours supplied by the labourforce will e+pand


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The natural rate of unemployment is not 8ero 4 at thee%uilibrium wage (1in the diagram aboe, there is unemploymentmeasured by :B This is made up of frictional plus structural

unemployment :t a wage rate (?aboe the e%uilibrium "mar&et4clearing wage"- employment contracts along the labour demandcure and total unemployment rises see the diagram below-


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0is4e%uilibrium unemployment rises to the leel shown by thedistance .0 This is because labour demand has fallen and thelabour force has e+panded There is an e+cess supply of labour 4

some people who are willing and able to find employment cannot getpaid wor&


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The Non :ccelerating *nflation Rate of 5nemployment is theleel of unemployment at which inflationary pressures in theeconomy are stable :ccording to supply4side economists,unemployment cannot be held permanently below its natural leel#ome argue if actual unemployment falls below the natural rate ie

e%uilibrium unemployment- 4 there is upward pressure on wageinflation that then feeds into general price inflation

.learly changes in unemployment do hae an effect on the ris& ofinflation .onsider this comment from the Ban& of England"0eelopments in the labour mar&et are a &ey determinant ofdomestically generated inflation" 57 !onetary olicy .ommittee

minutes- :s unemployment falls towards the N:*R5, s&ill shortagese+ert upward pressure on wages and producer prices, until anyfurther falls in unemployment lead to future higher inflation


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Reducing unemployment is a &ey target for all /oernments ;ighunemployment has enormous costs for indiiduals, businesses, the/oernment and the economy

The way of soling unemployment will depend upon its cause


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MET,ODS:-MET,ODS:-

/oernment support to struggling industries in order to try to sae

2obs eg airline industry

roide more training and education to the unemployed This

could help improe computer s&ills and communication Thesepeople will become more confident and employable

!a&e more information aailable in 2ob centres

Reduce unemployment benefits or cut benefits all together

Try to bring the country out of a recession The /oernment needs

to try to create demand in the economy *t could

/ie grants to businesses to produce goods

;ae pro2ects such as road building

.ut interest rates to encourage spending

.ut income ta+ to encourage spending

NE2 DEAL:-NE2 DEAL:-


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(or& within the accredited oluntary

sector and

(or& e+perience with an

enironmental tas& force

The programme is designed to proide pathways bac& into wor& forthe long term unemployed O many of whom hae become outsiders inthe labour mar&et despite the continuing strength of the Britisheconomy ;igher leels of employment and economic actiity add tototal national output and should help to improe the oerallperformance of the labour mar&et in sustaining long run economic

growth


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resentation of 0ata

-project-on-unemployment by clayd and mercedes.doc

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