Presentation 1 Ali

8/9/2019 Presentation 1 Ali

1/25


2/25


3/25


4/25

ROLL # 352ROLL # 352


5/25

UNEMPLOYMENT

A situation where some people are willingand able to work but are not able tofind paid employment. Those who are of

working age but not in the labor forcemight be retired , spouses working inthe home, student, are people who wouldlike work but have given up looking. Wewill concentrate on that part of thatlabor force that is unemployed.


6/25


7/25

The unemployed are

those who are aged 15 and over

were not employed during the survey

week had actively looked for full- or part-

time work advertisements, checkingCentre link notice boards) at any time in

the 4 weeks up to the end of the survey week.


8/25

available for work in the survey week, orwould have been available except fortemporary lines.

waiting to start a new job within 4 weeksfrom the end of the surveyweekend wouldhave started in the survey week if the job

had been available then waiting to be called back to a job fromwhich they had been stood down with out

pay for less then four weeks up to theend of the survey week for reasons otherthan bad weather and plant break down.


9/25


10/25

Types of unemployment Cyclical non-cyclical

long-term unemployment


11/25

Cyclical

Cyclical unemployment is caused by adeficiency in the level of aggregatedemand. It happens because of thenormal fluctuations that occur in thebusiness cycle over time. Therefore,it can be identified in the

'contraction' and 'trough' phases ofthe business cycle.


12/25


13/25

Structural unemployment ) is caused by .adjustment in the industrialstructure of the economy. Changes indemand for some types of goods causesome factories to reduce their productionand put off labour. Developments intechnology increase the demand for

certain types of skilled labour, while someof the unskilled lose their job.


14/25

Frictional unemployment Frictional unemployment is so namedbecause it results from lags or frictions inthe price mechanism which slows down

adjustment in the labour market. Mostfrictional unemployment temporary andincludes people who are in the process ofchanging jobs, those in seasonaloccupations and school leavers looking for

their first job. Even when there is fullemployment.


15/25

Seasonal unemployment Seasonal unemployment results fromthe seasonal nature of production in

some commodities, particularly in anumber of areas of primaryproduction such as sheep shearingand fruit picking.


16/25

long-term unemployment

Some members of society are essentiallyunemployable. Such people may have become

unemployed for cyclical or non-cyclical reasons, or

may never have worked since leaving school. Theyremain in theunemployment pool because they arethe people least suited to unemployement lack ofeducation, poor physical or mental abilities, ornegative

attitude to work.


17/25

Underemployment Underemployment occurs when peoplewho have part-time jobs would prefer

to work more.


18/25

Hidden unemployment of Official unemployment statistics tend to exclude a largenumber people who are willing to work but are not activelyseeking employment. As mentioned above, these peoplecould be classified as the 'hidden unemployed'. Becausethey are not actively seeking employment, mainly because of

the depressed state of the labour market, or the lack ofadequate facilities or services (e.g. affordable child care),they are not included as part of the labour force.ABSinformationshowed that in the early 1990s more than

700 000 people were in this category which wasalmost as many as those officially recognised as beingunemployed.


19/25

Measuring unemployment Direct Measures Indirect measures


20/25

Direct Measures

U = L F - J

UR = U / LF x 100

U is the number of unemployed people

UR is the unemployment rate LF is the size of the labour force

] is the number of people in jobs (employed persons).


21/25

Indirect measures LFPRis the labour force participation rate . J is the number of people in jobs

(employed persons) . PLWis the number of persons looking forfull-time and part-time work

. CVI5+is number of the civilian population

aged 15 and over.


22/25

. Causes of

unemployment According to Keynes, unemployment isfundamentally caused by lower than optimum

aggregate demand. With a lower demand for

goods and services, businesses require less staffto satisty that demand. This can have the effectof reducing demand even more, as unemployedpeople do not spend as much as employed people.Private investment will decline as well.Obviously,

this cause is generally referred to as so-calledcyclical unemployment.s


23/25

Explanations for

structural unemployment There are two standard economic explanations forstructural unemployment. As explained

above, structural unemployment is mainly due to

fundamental changes in the structure of labour demand-specifically, the kind of jobs thatthe economy offers. Technological change thedevelopment of new industries and the demise ofold ones, globalisation and geographic shift in

manufacturing, all create new kinds of jobs andcause many old ones to disappear


24/25

The Phillips curve: foliowing pioneering empirical work in the late 1950s, aBritish economist, A.W. Phillips,Identified an inversestatistical relationship between the unemployment rate andthe rate of inflation; that is,high rates of inflation areaccompanied by low rates of unemployment, and vice versa.

The graphical representation of this relationship is knownas the Phillips curve.figure 18.4(a)shows what the expectedrelationship should look like. Figure 18.4(b) shows therelationship between the two economic indicators for the1961 to 1969 period. The line generalising on the dataportrays the expected inverse relationship.


25/25

Presentation 1 Ali

Documents

Transcript of Presentation 1 Ali