ECN 004(Online Discussion/Quiz 2—-Demand and Supply of Labour)—31-5-2022
Questions for discussion
- What do you understand by Supply and Demand for Labour?
- Why is the labour supply curve backward bending?
- Clearly explain the meaning of Labor Productivity and its importance
- What do understand by the concept of unemployment?
- Discuss the differences between Underemployment and Underemployment
- Clearly explain the various types, causes and consequences of unemployment
- The Phillips’ curve means different things to different scholars and economies. Discuss.
Eco 004
1. The demand and supply of labor are determined in the labor market. The participants in the labor are workers and firm. Workers supply labor to firm in exchange for wages. Firms demand labor from workers in exchange for wages. The firms demand for labor.
2. It slopes from left to right. However, in labor market,it can often witness a backward bending curve. This means after a certain point, higher wages can lead to decline in labor supply. This occurs when higher wages encouraged workers to work less qnd and enjoy free time.
3. Labor productivity measures the hourly output of the country’s economy. Specifically, it charts the amount of real GDP produce by an hour of labor. Growth in labor productivity depends on three main factors: saving and investment in physical capital, new technology and human capital.
4. Unemployment is a situation where an individual who is willing and able to work is not privilege to do so
5. An unemployed individual does not have a job despite being qualified and actively searching for a job while on the other hand an unemployed individual is employed but it does not fit his qualification and goals.
6. -Illiteracy and ignorance can lead to unemployment.
-Bad government in power can equally to it.
-Slow economic growth
7. Phillips curve, graphic representation of the economic relationship between the rate of unemployment (or the rate of change of unemployment) and the rate of change of money wages. Named for economist A. William Phillips, it indicates that wages tend to rise faster when unemployment is low.The unemployment rate is one of the primary economic indicators used to measure the health of an economy. It tends to fluctuate with the business cycle, increasing during recessions and decreasing during expansions. It is among the indicators most commonly watched by policy makers, investors, and the general public.
Policy makers and central banks consider how much the unemployment rate has increased during a particular recession to gauge the recession’s impact on the economy and to decide how to tailor fiscal and monetary policies to mitigate its adverse effects. In addition, central banks carefully try to predict the future trend of the unemployment rate to devise long-term strategies to lower it.
Investors and the general public use the unemployment rate to understand the state of a county’s economy and as a measure of how well the government is running the country. A high unemployment rate means that the economy is not able to generate enough jobs for people seeking work. High unemployment not only brings about deeper social problems and prolonged suffering for families but also makes the country less attractive to foreign investors, thereby decreasing the investment funds flowing into the country.
8.
UGWU UKAMAKA MARYTHERES
EMAIL: ugwuukamakamarytheres1@gmail.com
UNN/J21/SOCS/010
1. The demand and supply of labor are determined in the labor market. The participants in the labor market are workers and firms. Workers supply labor to firms in exchange for wages. Firms demand labor from workers in exchange for wages.
The firm’s demand for labour. The firm’s demand for labor is a derived demand; it is derived from the demand for the firm’s output. If demand for the firm’s output increases, the firm will demand more labor and will hire more workers. If demand for the firm’s output falls, the firm will demand less labor and will reduce its work force.
An individual’s supply of labor. An individual’s supply of labor depends on his or her preferences for two types of “goods”: consumption goods and leisure. Consumption goods include all the goods that can be purchased with the income that an individual earns from working. Leisure is the good that individuals consume when they are not working. By working more (supplying more labor), an individual reduces his or her consumption of leisure but is able to increase his or her purchases of consumption goods.
2. The backward-bending labour supply curve occurs when an even higher wage actually entices people to work less and consume more leisure or unpaid time.
3. Labour productivity is defined as real output per labor hour, and growth in labor productivity is measured as the change in this ratio over time. Labor productivity growth is what enables workers to produce more goods and services than they otherwise could for a given number of work hours.
IMPORTANCE OF LABOUR PRODUCTIVITY
The Importance of Measuring Labor Productivity
As an economy’s labor productivity grows, it produces more goods and services for the same amount of relative work. This increase in output makes it possible to consume more of the goods and services for an increasingly reasonable price.
it drives economic growth – a highly productive economy means that we are able to
• produce more goods or services with the same amount of resource,
• produce the same level of goods and services with less resources.
labour productivity affects everyone.
• For businesses, increased productivity brings higher profit and opportunity for more investment.
• For workers, increased productivity can translate to higher wages and better working conditions. And in the longer term, increased productivity is key to job creation.
• For the government, increased productivity results in higher tax revenues.
4. What is the concept unemployment?
‘The definition of an unemployed person is someone of working age (16 and up), jobless, able and available to work, and actively looking for a job’. This means anyone. without a job who is reaching out to contacts about jobs or applying to positions. The term unemployment also refers to a situation when a person who is actively searching for employment is unable to find work. Unemployment is considered to be a key measure of the health of the economy.
5. DIFFERENCE BETWEEN UNEMPLOYMENT AND UNDEREMPLOYMENT
Unemployment refers to the economic situation in which an individual who is actively searching for employment is unable to find work.
Underemployment is a situation where there is a mismatch between the employment opportunities and the skills and education level of the employees.
Increase in cost of production and decrease in aggregate demand are the main causes of unemployment.
Mismatch between the availability of job opportunities and the availability of skills and education levels is the main cause for underemployment.
Unemployment is measured through unemployment rate.
There is no distinct measure for underemployment since invisible underemployment is difficult to measure, however brain drain can be used to measure underemployment indirectly.
6. TYPES OF UNEMPLOYMENT, CONSEQUENCES AND THEIR CAUSES
There are four main types of unemployment in an economy—frictional, structural, cyclical, and seasonal—and each has a different cause.
1. FRICTIONAL UNEMPLOYMENT. Frictional unemployment is caused by temporary transitions in workers’ lives, such as when a worker moves to a new city and has to find a new job. Frictional unemployment also includes people just entering the labor force, such as freshly graduated college students. It is the most common cause of unemployment, and it is always in effect in an economy.
2. STRUCTURAL UNEMPLOYMENT. Structural unemployment is caused by a mismatch in the demographics of workers and the types of jobs available, either when there are jobs available that workers don’t have the skills for, or when there are workers available but no jobs to fill. Structural unemployment is most obvious in industries undergoing technological advancements. For example, in the farming industry, much of the work is becoming mechanized, which means that fewer farmers are needed and many are let go. When these farmers go to cities to find work, they may find no other similar jobs in which to apply their skills.
3. CYCLICAL UNEMPLOYMENT. Cyclical unemployment is caused by declining demand: when there is not enough demand in an economy for goods and services, businesses cannot offer jobs. According to Keynesian economics, cyclical unemployment is a natural result of the business cycle in times of recession: if all consumers become fearful at once, consumers will attempt to increase their savings at the same time, which means there will be a decrease in spending, and businesses will not be able to employ all employable workers.
4. SEASONAL UNEMPLOYMENT. Seasonal unemployment is caused by different industries or parts of the labor market being available during different seasons. For instance, unemployment goes up in the winter months, because many agricultural jobs end once crops are harvested in the fall, and those workers are left to find new jobs.
Consequences of Unemployment in an Economy?
Low unemployment is key to economic stability. High and long-term unemployment can cause significant stress on a nation in three key areas:
• Individuals. Unemployed people have no ability to fulfill their financial obligations and can become mentally stressed, ill, and even homeless.
• Economic efficiency. During times of high unemployment, many job seekers will accept new jobs below their skill level, a situation called “underemployment,” which translates to a loss of human capital for an economy’s labor market. Unemployed workers will also significantly decrease their consumer spending, which is one of the driving forces of economic growth. Without consumer spending, the economy will slow dramatically.
• Socio-political stability. If unemployment remains high, citizen dissatisfaction can rise to the point of widespread civil unrest.
CAUSES OF UNEMPLOYMENT
A) Causes of Rural Unemployment
In developing nations, more than 50 percent of the population lives in rural areas. For the rural community, agriculture is the primary job for the people. Rural people do not get the right agricultural jobs, plus they do not get the proper access to education and skills required for getting top-level positions.
• Population explosion
• Limited land and more significant pressure on an area
• Seasonal nature of agriculture
• Lacking village industries and subsidiary
• Absolute dependence on nature
• Traditional and un-advanced methods of agriculture
• Lacking adequate means of irrigation
• The habit of staying at home
B) CAUSES OF FRICTIONAL UNEMPLOYMENT
It is a special kind of unemployment. It is also known as search unemployment. It refers to the time gap that occurs when a person shifts from one job to the next.
A person who leaves a company or an employed position isn’t immediately employed. It takes some time for them to find another job that suits their interests and set of skills. It might take a week, a month or a year.
During this time, people are capable of working and find jobs but do not accept them because they are willing to work for something better.
• It is not always possible for people to hold the jobs that they currently have while looking for jobs that they desire. There are various reasons behind a person who wants to quit a job.
• The person might have some personal reasons- such as marriage, house relocation, and so on. Some people like to take time off for their families. Some people save up from their previous jobs and quit their current unfulfilling ones.
• They have the financial backing to look for a new job while staying unemployed for a time.
C) Causes of Urban Unemployment
The number of people living in urban areas that do not have the right jobs is also increasing regularly. Unemployed people in rural areas are also heading towards urban areas. It has been the prime reason behind the urban unemployment.
• Age Factor
• Physical disabilities or illness
• Vocational Unfitness
• Technological Advancements
• Disorganisation in the economic structure
• Dislocation in industries
• Mass migration of rural people to urban areas
D) CAUSES OF CYCLICAL UNEMPLOYMENT
This type of unemployment is the most common form of unemployment in underdeveloped countries in particular. It happens when goods and services are deficient in the economy.
When this happens, it is impossible to create jobs, and most people remain unemployed.
The reason behind cyclical unemployment is a significant economic contraction in the market.
E) CAUSES OF STRUCTURAL UNEMPLOYMENT
There are various forms of structural unemployment for example-
• Industry shift
• Seasonal Unemployment
• Technology Obsolescence
Structural unemployment occurs when there is a mismatch in the skills required for a particular kind of work and the powers that people have to offer.
F) GLOBAL ECONOMIC CRISIS
There is an economic crisis that is prevalent in the world today. This crisis has resulted from a general pattern of inefficiency in the current economy. It has negatively impacted all the positive points which lead to growth within an economy.
People are looking for jobs and unable to find them. The rich countries have failed to handle this economic crisis. People within the vibrant economies are affected by a lack of produced goods and a lack of money. Companies have begun to decrease production, resulting in a shortage of jobs.
G) TECHNICAL ADVANCEMENTS
Several machines and other such technologies have replaced people who were previously employed for a specific job. A lot of labourers were needed in the production and manufacture of a particular good in the past. This number has been brought down in the past few decades.
Machines are coming to substitute human effort and manual labour. Many jobs do not require intellectual ability and demand quantity work instead of quality. Machines are thus found to be more efficient than men.
H) COMPANIES HAVE FEWER PEOPLE ON BOARD
Earlier companies used to have a significant workforce. This pattern has changed drastically in the past few years. Companies no longer look to hire a lot of people for different kinds of work.
Recruiters look for people who are all-rounders and can do excellent work at all times. It is preferred to have less competent workers than a larger number of irrelevant people. The same also reduces the amount of expense in terms of salaries.
I) INCREASED SPECIALIZATION IN JOBS
Companies today have begun to ask for particular skills. People cannot fulfil all the job requirements mentioned in the profile.
Recruiters offer several facilities and benefits to the working people. Thus they like to make sure that their workforce is as efficient as possible. A large number of skills are asked for, and grand demands are made of the working people. It results in fewer people getting employed.
J) VOLUNTARY UNEMPLOYMENT
Many people today are unwilling to work.
It is because people have particular demands when it comes to getting a job to which they will devote themselves. People are becoming more self-aware.
They have specific requirements from the salary and the kind of work that they have to do. When people do not find a job fitting their needs, they do not work.
7. What is the Phillips curve in economic concept?
Phillips curve, graphic representation of the economic relationship between the rate of unemployment (or the rate of change of unemployment) and the rate of change of money wages. Named for economist A. William Phillips, it indicates that wages tend to rise faster when unemployment is low.
The Phillips curve is a single-equation economic model, named after William Phillips, hypothesizing an inverse relationship between rates of unemployment and corresponding rates of rises in wages that result within an economy. Stated simply, decreased unemployment, (i.e., increased levels of employment) in an economy will correlate with higher rates of wage rises.
The original concept of the Phillips curve implied that policymakers could maintain a lower unemployment rate forever, as long as they were willing to pay the price of a higher inflation rate. This concept was soon challenged by a group of economists called monetarists, led by Milton Friedman, Karl Brunner, and Allan Meltzer. Milton Friedman (1967) and Edmund Phelps (1968) argued that the concept of the Phillips curve does not apply to the long run (that is, a period long enough for the participants in the economy to become fully aware of aggregate prices and inflation). In the long run, monetarists argued, price changes will have no impact on the unemployment rate, because the unemployment rate will equal its “natural” rate such that price and wage decisions are consistent; another way to think about this is that it is the level of unemployment towards which the economy tends to gravitate as it adjusts to any rate of inflation. In other words, the monetarists argued that the long-run Phillips curve is vertical at the natural rate of unemployment.
1 The supply of labour refers to the number of hours a worker is willing and able to work in a given period.
The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff. And if demand for the firm’s output of goods and services decreases, in turn, it will require less labor and its demand for labor will fall, and less staff will be retained.
2 A typical supply curve shows an increase in supply as wages rise. It slopes from left to right.
However, in labour markets, we can often witness a backward bending supply curve. This means after a certain point, higher wages can lead to a decline in labour supply. This occurs when higher wages encourage workers to work less and enjoy more leisure time.
3 Labor productivity measures the hourly output of a country’s economy. Specifically, it charts the amount of real gross domestic product (GDP) produced by an hour of labor.
4 Unemployment is a term referring to individuals who are employable and actively seeking a job but are unable to find a job. Included in this group are those people in the workforce who are working but do not have an appropriate job.
5 Unemployment is perhaps the most commonly discussed labor market indicator, showing how many individuals in the workforce want a job but can’t find one. Those individuals have recently been on the hunt for new work, but they haven’t yet found an opportunity for the taking. While Underemployment, however, happens when someone isn’t employed in a position that utilizes their full potential.
6 (i) Seasonal unemployment: This refers to a fall in demand for labour at certain times of the year due to seasonal changes e.g. when schools are on vacation, sellers in the school canteen become seasonally unemployed; farmers become unemployed during the dry season.
(ii) Structural unemployment: This occurs when there is a fall in the demand for the product of an industry leading to workers being permanently laid off. OR Structural unemployment occurs where the process of production changes, such that some workers become redundant e.g, the use of earthmoving equipment has renderedlabourers who use pick axes and shovels redundant in the construction industry; counting machines and ATMs have resulted in less people being employed as cashiers.
(iii) Frictional unemployment: This is caused by workers changing jobs or school leavers searching for jobs e.g. a fresh graduate looking for a job.
(iv) Cyclical unemployment: This is unemployment caused by a deficiency in aggregate demand leading to a deflationary phase of the business cycle e.g. when aggregate demand falls, firms need to cut down on labour.
Onyima John Chinedu
UNN/J21/SOCS/020
1. What do you understand by Supply and Demand for Labour?.
Answers.The demand for labour is a derived demand. It is derived from demand for the commodities it helps to produce. The greater the consumers’ demand for the product, the greater the producers’ demand for the labour required in making it. Hence an expected increase in the demand for a commodity will increase the demand for the type of labour that produces this commodity.while Supply of Labour:
By the supply of labour, we mean the various numbers of workers of a given type of labour which would offer themselves for employment at various wage rates.
2. Why is the labour supply curve backward
bending?
Answer: The backward bending labour supply curve occurs when an even higher wages actually entices people to work less and consume more leisures or unpaid time.
3. Clearly explain the meaning of Labor Productivity and its importance.
Answer:.Labour productivity measures the hours output of a countrys economy.specifically, it chart, the amountbof GDP produces by an hour of labour.it importance becourse labour represent the human factors in producing the goods and services of an economy.
4. What do understand by the concept of unemployment? Unemployment is a term referring to individuals who are jobless, activelly seeking for work and available to take a job but unable to find a job.
5. Discuss the differences between Underemployment and Unemployment.Unemployement is a situation where people who are able and willing to work at the existing wage rate are unable to find work while underemployment exist when labour is engaged in any form of work below its full potential.
6. Clearly explain the various types, causes and consequences of unemployment.
Answers: There are four main types of unemployment in an economy—frictional, structural, cyclical, and seasonal—and each has a different cause.
1: Frictional unemployment. Frictional unemployment is caused by temporary transitions in workers’ lives, such as when a worker moves to a new city and has to find a new job.
Structural unemployment.
2: Structural unemployment is caused by a mismatch in the demographics of workers and the types of jobs available, either when there are jobs available that workers don’t have the skills for, or when there are workers available but no jobs to fill.
3: Cyclical unemployment is caused by declining demand: when there is not enough demand in an economy for goods and services, businesses cannot offer jobs.
4: Seasonal unemployment. Seasonal unemployment is caused by different industries or parts of the labor market being available during different seasons.
Consequences of unemployment.
Low unemployment is key to economic stability. High and long-term unemployment can cause significant stress on a nation in three key areas:
Individuals. Unemployed people have no ability to fulfill their financial obligations and can become mentally stressed, ill, and even homeless.
Economic efficiency. During times of high unemployment, many job seekers will accept new jobs below their skill level, a situation called “underemployment,” which translates to a loss of human capital for an economy’s labor market. Socio-political stability. If unemployment remains high, citizen dissatisfaction can rise to the point of widespread civil unrest.
7. The Phillips’ curve means different things to different scholars and economies. Discuss.
By Milton friedman and edmud phelps regognises that when inflation ecpectation are built into the philips curves and individual fully settle at its natural level as detemined by market force.
I) Supply for labour is the amount of labour, measured in person – hours, offered for hire during a given time – period. While Demand for labour is a concept that describes the amount of demand for labour that an economy or firm is willing to employ at a given point in time.
2) The labour supply curve backward bending occurs when an even higher wage actually entices people to work less and consume more leisure or unpaid time.
3i) Labour productivity represent the total volume of output (measured in terms of Gross Domestic Product, GDP) produced per unit of labour ( measured in terms of the number of employed persons or hours worked) during a given time reference periods also known as workforce productivity.
3ii) it drives economy growth – a highly productive economy means that we are able to.
Ii) it produce more goods and services with the same amount of resources or relative work.
III) it produce the same level of goods and services with less resources.
Iv) it measures output per labour hour.
4) the concepts of unemployment occurs when workers who want to work are unable to find jobs, which lowers economic output; however, they still require subsistence.
5) In Underemployment,
This is when workers have jobs, but they aren’t working to their full capacity or skill level. This includes those who are working part-time. On the other hand, are those who are employed in jobs which are not up to their goals or expectations. Individuals experience underemployment because they lack the opportunity to work for as many hours as they would like to. While Unemployment is when an individual does not have a job but is actively searching for one. The unemployed are usually willing to be employed for the current wage rates in the market but have not been employed yet. Just those people who are not working but actively looking for a job are counted as unemployed. Sometimes people become tired of looking for a job or believe they won’t be able to find one and they are called discouraged workers.
6i) types of unemployment
I) Structural unemployment: This is associated with the mismatch of jobs and workers due to the lack of skills or simply the wrong area desired for work. Structural unemployment depends on the social needs of the economy and dynamic changes in the economy.
Ii) Frictional unemployment: This is when workers leave their old job but haven’t get found new ones. It also occurs when students are looking for that first jobs, or when mother’s are returning to the workforce.
III) Cyclical unemployment: This is when unemployment has the capacity to create jobs which increases economic growth therefore, an expanding economy typically has lower levels of unemployment.
Iv) Classical unemployment: This occurs when real wages for a job are set above the market – clearing level, causing the number of job – seekers to exceed the number of vacancies.
V) Seasonal unemployment: This is part of natural unemployment. Like its name says, seasonal unemployment results from regular changes in the season. Workers who may be affected by Seasonal unemployment includes resort workers, and ice cream vendors.
Vi) Voluntary unemployment: This is a situation when workers choose not to work at the current equilibrium wage rate.voluntary unemployment is attributed to the individuals decisions.
6ii) Causes of unemployment
I) Unemployment is caused when the economy slows down, and businesses are forced to cut costs by reducing payroll expenses.
Ii) It can also be caused by competition in particular industries or companies.
III) Advanced technology, such as computers or robots causes unemployment by replacing worker tasks with machines.
Iv) Wrong employment policies of the government contribute immensely to the unemployment crises in Nigeria.
V) The misuse of the country’s resources has led to crippling economic conditions across the country.
6iii) Consequences of unemployment
I) loss of income and living standard: employment is the major source of income for most individuals, so being unemployed results in a fall in income, and a loss of living standard.
Ii) The unemployment trap: Some unemployed individuals may become dependent on welfare and increasingly trapped in unemployment.
III) Reduced health: The unemployed are more likely to suffer from poor physical and mental health.
Iv) Increase in crime rate
V) Loss of respect and identity
Vi) Reduction in purchasing power
7) The Phillips curve is an economic concept developed by A. W. Phillips stating that inflation and unemployment have a stable and invesrse relationship. The curve suggested that changes in the level of unemployment have a direct and predictable effect on the level of price inflation.
1.Demand for labour describe the amount of labour that an economy or firms are to to hire at a particular time and at given wage rate.
In an economy, there’s always demand for labour. And employers are the ones that demand for labour.
1b.Supply of labour: Labour supply is the total hours a worker wish to work at a given real wage rate.And it is also the amount of labour, measure in person hours at a particular time period.
2.It slopes from left to right. However, in labour markets, we can often witness a backward bending supply curve. This means after a certain point, higher wages can lead to a decline in labour supply. This occurs when higher wages encourage workers to work less and enjoy more leisure time.
3.labour productivity is measure the work done by an individual per hour of labour.
Importance of labour productivity
3a.an increase in labor productivity increase the level of labour supply
3b.increase in Labour productivity leads to high profit and opportunity for Investment
4.Unemployment is a situation a person qualified, willing to work and actively looking for a job but could not find a job.
5.There is a difference between being unemployed and underemployed. Unemployed means you don’t have a job,but you are willing to work work and also actively looking for job but could not find a job while underemployment means the job you have is inadequate and below a person capacity.
6.Poor Management of the Economy:The misuse of the country’s resources has led to crippling economic conditions across the country. …
6b.Poor Investment Climate:the weather can also be one of the causes of unemployment
6c.A wrong Approach to Employment Creation:In creating employment, when you decide low wage to a person he/she will decline it.
6d.Poor Infrastructure
NAME: ONYENEKE SANDRA CHIZARAM
REG NO:UNN/J21/ARTS/003
COURSE CODE:004
COURSE TITLE: APPLIED ECONOMICS 11
ASSIGNMENT ON ECO 004
1:What do you understand by Supply and Demand for Labour?
SUPPLY OF LABOUR:Supply of labour is the total hours (adjusted for intensity of effort) that workers wish to work at a given real wage rate.it is also the number of workers willing and able to work in a particular job or industry for a given rate.
DEMAND OF LABOUR: Demand for labour is a concept that describes the amount of demand for labour that an economy or firm is willing to employ at a given point in time.demand for labour will also depend on labour productivity,the price of the goods and their overall profitablity to a firm.
2:Why is the labour supply curve backward bending?
Labour supply curve bending backwards occurs when the income effect exceeds the substitution effect.when an even higher wage actually entice people to work less and consume more leisure or unpaid time, income effects states that a higher wage means workers can achieve a target income by working fewer hours
3:Clearly explain the meaning of Labor Productivity and its importance.
LABOUR PRODUCTIVITY: Labour productivity or workforce is defined as the real economic output per labour hour and it is measured by the change in economic output per labour over a defined period.
IMPORTANCE OF LABOR
PRODUCTIVITY
*:Labour productivity helps in improvement of standard of living in the form of higher consumption.
*: Labor Productivity can also indicates short term and cyclical changes in the economy.
*:As an economy’s labor productivity grows,it produces more goods and services for the same amount of relative work.
4:What do understand by the concept of unemployment?
The term unemployment refers to a situation where a person actively searches for employment but is unable to find work.unemployment is considered to be a key measure of the health of the economy.unemployment is a key economic indicator because it signals the ability or inability of worker to readily obtain gainful work to contribute to the productive output of the economy.
5:Discuss the differences between Underemployment and Unemployment?
Underemployment is different from unemployment in that the person is in fact,working just not as much as they like or to full extent of their abilities, skills or education.
While
Unemployment is the economic situation where an individual who is jobless, qualified for a job an had been actively looking for employment but unable to find a job.
6:Clearly explain the various types, causes and consequences of unemployment.
TYPES OF UNEMPLOYMENT
1: FRICTIONAL UNEMPLOYMENT: This is caused by temporary transitions in worker lives.frictional unemployment also include people just entering the labor force such as the fresh graduate and it is always in effect in an economy.
2: STRUCTURAL UNEMPLOYMENT:This is caused by a mismatch on the demographics of workers and the types of jobs available either when there are jobs available that workers don’t have the skills for,or when there are workers available but no jobs to fill.
3: CYCLICAL UNEMPLOYMENT:This is caused by declining demand.when there is not enough demand in an economy for goods and services, business cannot offer jobs.According to Keynesian economics, cyclical unemployment is a natural results of the business cycle in times of recession.
4: SEASONAL UNEMPLOYMENT: This is caused by different industries or part of the labor market being available during different season.
CAUSES OF UNEMPLOYMENT
1:POOR MANAGEMENT OF THE ECONOMY: The misuse of the countries resources has led to crippling economic conditions across the country.the countries wealth translate to the people’s wealth because a wealthy nation where resources abound will have citizens that can fend for themselves and create jobs for others.
2:POOR INVESTMENT CLIMATE: Failure of government to create an enabling environment for sustainable growth hinders the creation for job opportunities by the private sector.
3:POOR INFRASTRUCTURE:Poor infrastructural development in an economy or nation impedes business growth.
4:A WRONG APPROACH TO EMPLOYMENT CREATION:Wrong employment policies of the government contribute immensely to the unemployment crises in the economy.
CONSEQUENCES OF UNEMPLOYMENT
Low employment is the key to economic stability,high and long term unemployment can cause significant stress on a nation.
1: INDIVIDUALS: Unemployed people have no ability to fulfill their financial obligations and can become mentally stressed,I’ll and even homeless.
2: ECONOMIC EFFICIENCY: During time of high Unemployment, many job seekers will accept new jobs below their skill level,a situation called Underemployment.which translate to a loss of human capital for an economy’s labor market.unemployed workers will also significantly decrease their consumers spending which is one of the driving force of economic growth.
4:SOCIO-POLITICAL STABILITY:If Unemployment remains high citizens dissatisfaction can rise to the point of widespread civil unrest.
7:The Phillips’ curve means different things to different scholars and economies. Discuss.
Phillips curve was named after A W.Phillip.phillp hypothesizing a correlation between reduction in unemployment and increased rate of rate wage rises within an economy.phillp did not stake a linked relationship between employment and inflation,this was a trivial deduction from his statistical findings.PAUL SAMUELSON and ROBERT SOLOW made the connection explicit and subsequently, MILTON FRIEDMAN and EDMUND PHELPS pit the theoretical structure in place.in so doing Friedman successfully predicted the imminent collapse of Phillips theoretical correlation.phillps curve was asserted in 1967-1968 by Friedman and Phelps that the curve was only applicable in the short run and that in the long run inflationary policies would not decrease unemployment.the long run Phillips curve is now seen as vertical line at the natural rate of unemployment,were the rate of inflation has no effect on unemployment.phillps curve remains the primary framework for forecasting and understanding inflation used in the central banks.this concept was somewhat disproven empirically due to the occurrence of stagflation I the 1970’s when there was high level of both inflation and unemployment.the belief I 1960 was that any fiscal stimulus could increase aggregate demand and initiate the following effects: labor demand increase,pool of Unemployed workers and subsequently decrease and companies increase wages to compete and attract a smaller talent pool.the belief system caused many government to adopt a “stop-go”strategy where a target rate of inflation was established and fiscal and monetary policies were used to expand nd contract the economy to achieve the target rate.
1 The supply of labour refers to the number of hours a worker is willing and able to work in a given period.
The demand for labor is an economics principle derived from the demand for a firm’s output. That is, if demand for a firm’s output increases, the firm will demand more labor, thus hiring more staff.
2 A typical supply curve shows an increase in supply as wages rise. It slopes from left to right.
However, in labour markets, we can often witness a backward bending supply curve. This means after a certain point, higher wages can lead to a decline in labour supply.
3 Labor productivity measures the hourly output of a country’s economy. Specifically, it charts the amount of real gross domestic product (GDP) produced by an hour of labor.
4 Unemployment is a term referring to individuals who are employable and actively seeking a job but are unable to find a job. Included in this group are those people in the workforce who are working but do not have an appropriate job.
5 Unemployment is perhaps the most commonly discussed labor market indicator, showing how many individuals in the workforce want a job but can’t find one. Those individuals have recently been on the hunt for new work, but they haven’t yet found an opportunity for the taking. While Underemployment, however, happens when someone isn’t employed in a position that utilizes their full potential.
6 (i) Seasonal unemployment: This refers to a fall in demand for labour at certain times of the year due to seasonal changes e.g. when schools are on vacation, sellers in the school canteen become seasonally unemployed; farmers become unemployed during the dry season.
(ii) Structural unemployment: This occurs when there is a fall in the demand for the product of an industry leading to workers being permanently laid off. OR Structural unemployment occurs where the process of production changes, such that some workers become redundant e.g, the use of earthmoving equipment has renderedlabourers who use pick axes and shovels redundant in the construction industry; counting machines and ATMs have resulted in less people being employed as cashiers.
(iii) Frictional unemployment: This is caused by workers changing jobs or school leavers searching for jobs e.g. a fresh graduate looking for a job.
(iv) Cyclical unemployment: This is unemployment caused by a deficiency in aggregate demand leading to a deflationary phase of the business cycle e.g. when aggregate demand falls, firms need to cut down on labour.
UNN/J21/SOCS/019
Mokelu Matthew obiajulu
1: the demand for labour describes the amount and market wage rate workers and employers settle upon at any given moment.
2: it slopes from Left to right. However, in labour market,we can often witness a backward bending supply curve. This means after a certain point, higher wages can lead to a decline in labour supply. This occurs when higher wages encourage workers to work less and enjoy more leisure time.
3: labour productivity is defined as real output per labour hour and growth in labour. Productivity is measured as the change in this ratio over time.
4: unemployment is a term referring to individuals who are employable and actively geeking a job but are unable to find a job.
5: The differences between them is that unemployed means you don’t have a job, while “underemployment” is used when talking about people who are working in a lower capacity than one in which they are qualified.
6: unemployed can be defined as the state where people are out of jobs due to a variety of reasons.
The type are: technology unemployment, underemployment, Natural rate of unemployment and Involuntary unemployment.
The causes are: unemployment is caused by various reasons that comes from both the demand side, or employer, and the supply side, or the worker. Demand side reductions may be caused by high interest rates,gbolal recession, and financial crisis. From the supply side, frictional unemployment and structural employment play a great role.
7: The Phillips curve is an economic concept developed by A.W. Phillips stating that inflation and unemployment have a stable and inverse relationship.
1. The demand and supply of labor are determined in the labor market. The participants in the labor market are workers and firms. Workers supply labor to firms in exchange for wages. Firms demand labor from workers in exchange for wages. The firm’s demand for labor.
2. A typical supply curve shows an increase in supply as wages rise. It slopes from left to right.
However, in labour markets, we can often witness a backward bending supply curve. This means after a certain point, higher wages can lead to a decline in labour supply. This occurs when higher wages encourage workers to work less and enjoy more leisure time.
3. Labor productivity is defined as real output per labor hour, and growth in labor productivity is measured as the change in this ratio over time. Labor productivity growth is what enables workers to produce more goods and services than they, otherwise could for a given number of work hours.
4. The term unemployment refers to a situation when a person actively searches for employment but is unable to find work. Unemployment is considered to be a key measure of the health of the economy.
5. Unemployment is a situation where people who are able and willing to work at the existing wage rate are unable to find work OR a situation where factors of production such as capital lie idle or cannot be put to productive use, while underemployment exists when labour is engaged in any form of occupation/work below it’s full potential OR a situation where resources like capital is not optimally used.
6i. Frictional unemployment. Frictional unemployment is caused by temporary transitions in workers’ lives, such as when a worker moves to a new city and has to find a new job.
ii. Structural unemployment. Structural unemployment is caused by a mismatch in the demographics of workers and the types of jobs available, either when there are jobs available that workers don’t have the skills for, or when there are workers available but no jobs to fill.
iii. Cyclical unemployment. Cyclical unemployment is caused by declining demand: when there is not enough demand in an economy for goods and services, businesses cannot offer jobs.
iv. Seasonal unemployment. Seasonal unemployment is caused by different industries or parts of the labor market being available during different seasons.
Consequences of unemployment
i. Individuals. Unemployed people have no ability to fulfill their financial obligations and can become mentally stressed, ill, and even homeless.
ii. Economic efficiency. During times of high unemployment, many job seekers will accept new jobs below their skill level, a situation called “underemployment,” which translates to a loss of human capital for an economy’s labor market.
iii. Socio-political stability. If unemployment remains high, citizen dissatisfaction can rise to the point of widespread civil unrest.
Causes of unemployment
Unemployment is caused by various reasons that come from both the demand side, or employer, and the supply side, or the worker.
*Demand-side reductions may be caused by high interest rates, global recession, and financial crisis.
*From the supply side, frictional unemployment and structural employment play a great role.
7. Many economists believe that the Phillips curve is a very useful relationship because both inflation and unemployment are key measures of economic performance. Monetary policymakers tend to use the Phillips curve framework quite a bit, as can be demonstrated by the following quotes.
GIGINNA GODSWILL CHUKWUEMERIE
UNN/J21/MGTSC/011
1.) Workers supply labor to firms in exchange for wages. Firms demand labor from workers in exchange for wages.
2.) It slopes from left to right. However, in labour markets, we can often witness a backward bending supply curve. This means after a certain point, higher wages can lead to a decline in labour supply.
3.) Labor productivity is defined as real output per labor hour, and growth in labor productivity is measured as the change in this ratio over time.
Importances:
Labor productivity is directly linked to improved standards of living in the form of higher consumption. As an economy’s labor productivity grows, it produces more goods and services for the same amount of relative work. This increase in output makes it possible to consume more of the goods and services for an increasingly reasonable price.
Growth in labor productivity is directly attributable to fluctuations in physical capital, new technology, and human capital. If labor productivity is growing, it can usually be traced back to growth in one of these three areas. Physical capital is the tools, equipment, and facilities that workers have available to use to produce goods. New technologies are new methods to combine inputs to produce more output, such as assembly lines or automation. Human capital represents the increase in education and specialization of the workforce. Measuring labor productivity gives an estimate of the combined effects of these underlying trends.
Labor productivity can also indicate short-term and cyclical changes in an economy, possibly even turnaround. If the output is increasing while labor hours remains static, it signals that the labor force has become more productive. In addition to the three traditional factors outlined above, this is also seen during economic recessions, as workers increase their labor effort when unemployment rises and the threat of lay-offs looms to avoid losing their jobs.
4.) The term unemployment refers to a situation when a person actively searches for employment but is unable to find work.
5.) Unemployment can be defined as a situation when a person who is employable and actively searching for employment or a job is unable to find work. While Underemployment refers to the underuse of a worker because a job does not use the worker’s skills, is part-time, or leaves the worker idle.
6.) cutting back on their production, making it necessary to reduce their workforce within the organization. In effect, workers are laid off.
2. Frictional unemployment
Frictional unemployment refers to those workers who are in between jobs. An example is a worker who recently quit or was fired and is looking for a job in an economy that is not experiencing a recession. It is not an unhealthy thing because it is usually caused by workers trying to find a job that is most suitable to their skills.
3. Structural unemployment
Structural unemployment happens when the skills set of a worker does not match the skills demanded by the jobs available, or alternatively when workers are available but are unable to reach the geographical location of the jobs.
An example is a teaching job that requires relocation to China, but the worker cannot secure a work visa due to certain visa restrictions. It can also happen when there is a technological change in the organization, such as workflow automation that displaces the need for human labor.
4. Voluntary unemployment
Voluntary unemployment happens when a worker decides to leave a job because it is no longer financially compelling. An example is a worker whose take-home pay is less than his or her cost of living.
Causes of Unemployment
Unemployment is caused by various reasons that come from both the demand side, or employer, and the supply side, or the worker.
Demand-side reductions may be caused by high interest rates, global recession, and financial crisis. From the supply side, frictional unemployment and structural employment play a great role.
Effects
The impact of unemployment can be felt by both the workers and the national economy and can cause a ripple effect.
Unemployment causes workers to suffer financial hardship that impacts families, relationships, and communities. When it happens, consumer spending, which is one of an economy’s key drivers of growth, goes down, leading to a recession or even a depression when left unaddressed.
Unemployment results in reduced demand, consumption, and buying power, which in turn causes lower profits for businesses and leads to budget cuts and workforce reductions. It creates a cycle that goes on and on that is difficult to reverse without some type of intervention.
7.) The Philips curve is an economic concept developed by A. W. Phillips stating that inflation and unemployment have a stable and inverse relationship. The theory claims that with economic growthcomes inflation, which in turn should lead to more jobs and less unemployment. However, the original concept has been somewhat disproven empirically due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment.
The concept behind the Phillips curve states the change in unemployment within an economy has a predictable effect on price inflation. The inverse relationship between unemployment and inflation is depicted as a downward sloping, concave curve, with inflation on the Y-axis and unemployment on the X-axis. Increasing inflation decreases unemployment, and vice versa. Alternatively, a focus on decreasing unemployment also increases inflation, and vice versa.3
The belief in the 1960s was that any fiscal stimulus would increase aggregate demand and initiate the following effects. Labor demand increases, the pool of unemployed workers subsequently decreases and companies increase wages to compete and attract a smaller talent pool. The corporate cost of wages increases and companies pass along those costs to consumers in the form of price increases.
This belief system caused many governments to adopt a “stop-go” strategy where a target rate of inflation was established, and fiscal and monetary policies were used to expand or contract the economy to achieve the target rate. However, the stable trade-off between inflation and unemployment broke down in the 1970s with the rise of stagflation, calling into question the validity of the Phillips curve.
Name: Soni – Onovo precious Chinwem
Reg no: Unn/J21/Socs/031
Email address: sonionovoprecious@gmail.com
1)a)Supply Of Labour: may be defined as the total number of people of a working age offered for employment at a particular time and at a given wage rate.
b)Demand For Labour : .may be defined as the total number of workers employers are willing and ready to employ or hire at a particular time and at a given wage rate.
2) Backward Bending Supply Curve shows an increase in supply as wages rises.
3) Labour Productivity : is defined as a real economic output per labour hour. Growth in labour productivity is measured by change in economic per labour hour over a defined period of time.
4) Unemployment : is defined as a situation in which a persons of working age, able and willing to work are unable to find paid employment
5)Under Employment :This is the type of
unemployment which occurs when an individual works at less than his full capacity so that his productivity is below the maximum.
6) a) Residual Unemployment :This is the type of unemployment that arises as a result of physical or mental disabilities .
b) Voluntary Unemployment : Voluntary unemployment occurs when a worker deliberately refuses to take up paid employment even though employment opportunities are Available, they may be receiving unemployment benefits from government.
c) Casual Unemployment : This is the type of unemployment which involves jobs that are not permanent.
6) b) causes of Unemployment
i) Deficiency in Demand : An overfall in demand for goods can lead companies to retrench workers.
i i) Poor Development Plans : Government does not normally put in place development plans that can create employment opportunities or take care of the unemployed.
i i i) Lack of Social Amenities : Labour tends to be unavailable when. there are no social amenities.
6) c) consequences of Unemployment
i) High Rate of Dependency : The Level of dependency will increase as a result of unemployment.
i i) Reduction In Investment : The zeal to invest is always very lows when there is a high level of unemployment.
i i i) Waste of Human Resources : The time , money and energy spent in acquiring degrees and certificates will be wasted and labour is made idle.
7) The phillips curve states that the inflation and unemployment have an inverse relationship higher inflation is associated with lower employment and vise versa.
Reg No unn/21/socs/018
Question 1 answer
demand for labour is a concept that describes the amount of demand for labour that an economy or film is willing to employ at a given point in time. this demand may not necessarily be in long run equilibrium.
QUESTION2ANSWER
because its slopes from left to right however in labour market we can often witnessed a backward bending supply curve this means after a certain point the higher wages can lead to a decline in labour supply .this occurs when a higher wage encourage workers to work less and enjoy more leisure time.
QUESTION 3 ANSWER
LABOUR PRODUCTIVITY IS A MEASURE OF LABOUR OUTPUT. THE PRODUCTIVITY IS MEASURED IN HOURLY TERMS. IN MACROECONOMICS TERMS LABOUR PRODUCTIVITY MEASURES THE REAL GROSS DOMESTIC PRODUCT (GDP) PRODUCED IN A HOUR THROUGH LABOUR. LABOUR PRODUCTIVITY IS AN ESSENTIAL FACTOR IN THE OVERALL GROWTH OF A BUSINESS.
IMPORTANCE OF LABOUR PRODUCTIVITY
WITH GROWTH IN LABOUR PRODUCTIVITY ,AND ECONOMY IS ABLE TO PRODUCE INCREASINGLY MORE GOODS AND SERVICES FOR THE SAME AMOUNT OF WORK. AND IT’S ALSO POSSIBLE FOR A GREATER QUANTITY OF GOODS AND SERVICES TO ULTIMATELY BE CONSUMED FOR A GIVEN AMOUNT OF WORK.
QUESTION 4 ANSWER
unemployment is a term referring to individuals who are employable and actively seeking a job but are unable to find a job.
QUESTION 5 ANSWER
unemployment is a situation where people who are able to find work at the existing wage rates are unable to find work or a situation where factors of production such as capital lie idle or cannot be put to productive use while underemployment exist when labour is engaged in any form of occupation or work below its full potential or a situation where resources like a capital is not optimally use.
QUESTION 6 ANSWER
6 basically types of unemployment
1. FRICTIONAL UNEMPLOYMENT…this refers to those workers who are in between jobs and examples is a worker who recently quit or was fired and is looking for a job in an economy that is not experiencing a reception.
2. CYCLICAL UNEMPLOYMENT… Is caused by declining demand when there is not enough demand in an economy for goods and services ,businesses cannot offer jobs. according to Keynesian is economics cyclical unemployment is a natural result of the business cycle in terms of reception example if all consumers will attempt to increase their savings at the same time which means there will be a decrease in spending and businesses will not be able to employee all employable workers.
3. DEMAND DEFICIENT UNEMPLOYMENT…is the biggest cause of unemployment that typically happens during a recession when companies experience a reduction in the demand for their products or services they respond by cutting back on their production, making it necessary to produce their workforce within the organisation. in affects workers are laid off.
4. STRUCTURAL UNEMPLOYMENT… This happens when the skills set of a worker does not match the skills demanded by the jobs available, or alternatively when workers are available but but are unable to reach the geographical location of the jobs .example is a teaching job that requires relocation to China but the worker cannot secure a work visa due to certain visa restrictions.
5. VOLUNTRY UNEMPLOYMENT…it happens when a worker decides to leave a job because it is no longer financially compelling .example is a worker whose take-home pay is less than his or her cost of living.
6. SEASONAL UNEMPLOYMENT… Is caused by different industries or parts of the labour market being available during different season for instance unemployment goes up in the winter months, because many agricultural jobs end once crops are harvested in the fall and those workers are left to find new jobs.
CAUSES OF UNEMPLOYMENT
1.TECHNOLOGICAL CHANGE… there is a global rapid technological change which played a big role in the increased unemployment problem. Many jobs which we are handled by hands are being done by different machines and technology nowadays. the new advanced technology replaced the low skills or unskilled workers in different factories.
2. INCREASE IN POPULATION… The increase in population which leads to higher unemployment rates as the number of people who are looking for jobs is increasing ,it is more difficult to change jobs for all this huge numbers of workers. in this situation the demand for work will be more than available occupation.
3. LACK OF SKILLS AND EDUCATION…this happens when the qualifications of a person are not sufficient with his job responsibilities ,individuals face difficulties in learning new skills applicable for the required job example, computer skills management and communication.
4. RISING COST…unemployment can be due to the rising cost .The rising cost makes it hard for the companies to pay the usual optimum salary for the employees or even the minimum wages in some cases. hence the employees reject low-wage job and leaves the companies.
EFFECTS/ CONSEQUENCES OF UNEMPLOYMENT
1. Financial problems… The financial problems which are rising from prolonged unemployment ,it is known that we can not buy anything without money ,the constant income was food ,clothing and shelter .due to the loss of income, unemployed individuals will be unable to earn money to meet financial obligations.
2. PHYSIOLOGICAL PROBLEMS…Unemployment affects a person’s physical logical to numerous studies have revealed the relationship between unemployment and lack of self-esteem and confidence leading to depression besides there is an increased anxiety and stress levels which leads to phychosomatic diseases ,personal worthlessness and powerlessness.
3. SOCIAL PROBLEMS… They are many obvious and well-documented social problems which are caused by unemployment. More over high unemployment often results in increased marriage breakdown ,divisions and discrimination in society ,suicide rates and crimes rate especially amoung the young.
Question 7 answer.
The Phillips curve is an economic concepts developed by A W Phillips stating that inflation and unemployment have a stable and inverse relationship.the theory claims that with economic growth comes inflation which is in turn should lead to more jobs and less mone
unemployment.
Name:Ozoemena Favour
1.Demand for labour may be defined as the total number of workers employers are willing and ready to employ or hire at a particular time and at a given wage rate.The demand for labour is a derived demand because labour is not required for its own sake but for what it can help to produce.
Supply for labour can be defined as the total number of people of working age offered for employment at a particular time and at a given wage rate.In other words,supply for labour is referred to as the services of labour available in the labour market.
2.Labour supply curve is backward bending because when an even higher wage actually entices people to work less and consume more leisure or unpaid time making higher wages lead to a decrease in labour supply.
3.Labour productivity measures the amount of goods and services produced by each member of the labour force per hour ie amount of goods that can be produced per hour by workers.
Importance of labour productivity
a.it brings about economic growth.
b.It brings higher profit and opportunity for investment.
c.it brings about higher wages and better working condition.
d.it brings about economic integration.
e.it brings increase in output.
4.Unemployment is an important issue addressed in the study of macroeconomics.Unemployment is a state where by a person is willing and able to work,actively job searching yet still unable to find job.Therefore people who are voluntary idle are not classified as unemployed because they are not actively job searching,just those who are not working but actively looking for a job are counted as unemployed.
5.Difference between unemployment and underemployment.
Unemployment is a state where by a person is willing and able to work,actively job searching yet still unable to find job while underemployment is when workers have jobs but they aren’t working to their full capacity ar skill level.This include those who work part-time but would prefer full-time jobs.Underemployment can be caused by cyclical unemployment.
6.Types of unemployment
i.Structural unemployment:Structural unemployment is associated with the mismatch of jobs and workers due to lack of skills or simply the wrong area desired to work.Structural unemployment depends on the social needs of the economy and dynamic changes in the economy.For instance advances in technology and changes in market conditions often turn many skills obsolete,this typically increase the unemployment rate.
ii.Frictional unemployment:Frictional unemployment is when workers leave their old jobs but haven’t found new ones.Most of the times workers leave work voluntary either because they need to move or they have saved up enough money to allow them to look for a better job.For example it occurs when students are looking for their first job or when mothers are returning to the workforce.Frictional unemployment is short term and a natural part of job search process.
iii.Cyclical unemployment or Keynesian unemployment:It is an unemployment attributed to economic contraction.The economy has the capacity to create jobs which increases economic growth. Cyclical unemployment is not part of natural unemployment rate.It’s strictly caused by the contraction phase of business cycle.That is when demand for goods and services falls drastically, forcing businesses to lay off large numbers of workers to cut cost.
iv.Classical unemployment:Classical unemployment occurs when real wages for a job are set above the market clearing level causing the number of job seekers to exceed the number of vacancies.Classical unemployment is when wages are higher than the law of supply and demand.
v.Seasonal unemployment:Seasonal unemployment is a part of natural unemployment.Seasonal unemployment results from regular changes in the season.Workers who may be affected by seasonal unemployment include resort workers,ice cream vendors etc.It could also include people who harvest crops.
vi.Voluntary unemeployment:Voluntary unemployment is defined as a situation when workers choose not to work at the current equilibrium wage rate.Voluntary unemployment is attributed to the individual’s decision. For one reason or another workers may choose not to participate in the labour market.There are several reasons for this which include excessively genorous welfare benefits and high rate of income tax.
vii.Involuntary unemployment:This exists because of the socio economic environment including the market structure,government intervention and the level of aggregate demand which individuals operate.
Causes of unemployment
1.Unemployment is caused when the economy slows down and businesses are forced to cut costs by reducing payroll expenses.
2.It is caused by competition in particular industries or companies;Advanced technology such as computers or robots causes unemployment by replacing workers task with machines.
3.Over population: When a country’s population is too high, it tends to produce many workers and such workers may not have jobs to do thereby leading to unemployment.
4.Geographical mobility of labour:Due to certain circumstances,labour finds it difficult to move from one geographical area to another and this results in unemployment.
5.Inadequate educational system:The educational systems practised by most developing countries sre inadequate as special attention is paid to paper qualification to the detriment of job creation.
Consequences of unemployment
1.Increase in crime rate:When there are a large number of unemployed persons, it usually leads to increase in crime rate such as armed robbery, car snatching, hired assasination etc
2.Threat to peace and stability:With an over increasing number of unemployed persons,the peace and stability of the state will be threatened.
3.Migration: Where there is unemployment,it usually results in able youths and adults alike moving out of the country to look for jobs in other places.
4.High rate of dependency:The level of dependency will increase as a result of unemployment.
5.Waste of human resources: The time,money and energy spent in acquiring degrees and certificates will be wasted and labour is made idle.
7.More explanation of the philip’s curve
By the mid 1970’s, it appeared that the philip’s curve trade off no longer existed.There no longer seemed a stable pattern.The stable relationship between unemployment and inflation appeared to have broken down.It was possible to have a number of inflation rates for any given unemployment rate.
American economist Fredman and Phelps offered one explanation-namely that there is not one philips curve but a series of short run philips curves and long run philips curve, which exists at the natural rate of unemployment(NRU).Indeed in the long run there is no trade off between unemployment and inflation.