Š Cyclical Unemployment ƒ . Associated with short-term ups and downs of the business cycle and refers to the year-to-year fluctuations in unemployment around its natural rate.Š Long-run versus Short-run Unemployment: Long-run: The natural rate of unemployment ƒ Short-run: The cyclical rate of unemployment ƒ Š Natural Rate of Unemployment ƒ The amount of unemployment that the economy normally experiences and does not go away on its own even in the long run.

Š Š Š Š Š Š Š Š Rapid Growth of Population Poor Quality of Education Slow Rate of Industrial Development Capital Intensive Industries Mechanization of Agriculture Privatization Industrial Sick Units Golden Hand Shake .

Š Š Š Š Š Š Shortage of Capital Overseas Employment Opportunities Political Instability Human capital Law & Order Situation Commercial Activities .

Š Š Š Š Š Š Š Check on Growth Rate of Population Promotion of Education Professional Training Human Resource Development Committee Employment in Agriculture Sector Overseas Employment Establishing Industries in Backward Areas .

Š Š Š Š Š Š Š Focus on Small Scale Industries Introduction of Self Employment Scheme Purchase of Locally Manufactured Goods Encouraging Agro based Industries Focus on construction Industry Skill Formation Appropriate Fiscal and Monetary Policies .

the BLS places each adult (over 16) years old into one of three categories: ƒ Employed ƒ Unemployed ƒ Not in the labor force .000 randomly selected households every month. ƒ It surveys 60. Based on the answers to the survey questions. ƒ The survey is called the Current Population Survey.Š Š Unemployment is measured by the Bureau of Labor Statistics (BLS).

Not in the Labor Force: A person who fits neither of these categories.Š Š Š Employed: A person is considered employed if he or she has spent most of the previous week working at a paid job. Unemployed: A person is unemployed if he or she is on temporary layoff. or is waiting for the start date of a new job. is looking for a job. or retiree. such as a full-time student. . Š Labor Force ƒ The labor force is the total number of workers and the BLS defines the it as the sum of the employed and the unemployed. is not in the labor force. homemaker.

8 million) Adult Population (211.9 million) Unemployed (6.Employed (135.7 million) Not in labor force (70.1 million) Labor Force (141.1 million) Copyright©2003 Southwestern/Thomson Learning .

ƒ Unemployment Rate= (Unemployed/Labor Force)*100 Š The labor-force participation rate is the percentage of the adult population that is in the labor force. ƒ Labor-force Participation Rate= (Labor Force/Adult Population)*100 .Š The unemployment rate is calculated as the percentage of the labor force that is unemployed.

Percent of Labor Force 10 Unemployment rate 8 6 Natural rate of unemployment 4 2 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Copyright©2003 Southwestern/Thomson Learning .

Labor-Force Participation Rate (in percent) 100 Men 80 60 0 Women 20 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 Copyright©2003 Southwestern/Thomson Learning .

Š It is difficult to distinguish between a person who is unemployed and a person who is not in the labor force. even though they aren·t looking for work. ƒ . people who would like to work but have given up looking for jobs after an unsuccessful search. ƒ Other people may claim to be unemployed in order to receive financial assistance. don·t show up in unemployment statistics. Discouraged workers.

ƒ Most of the economy·s unemployment problem is attributable to relatively few workers who are jobless for long periods of time.Š Length of Unemployment Most spells of unemployment are short. ƒ . ƒ Most unemployment observed at any given time is long-term.

Š Š Š Š Š Š Frictional Unemployment Seasonal unemployment Structural Unemployment Cyclic or Demand Deficient Unemployment Disguised Unemployment Under Employed .

It takes time to search for a new job . Frictional unemployment is temporary. .Š Š Occurs Where there is a shortage of one type of labor in one region and surplus in other region.

people get unemployed due to seasonal changes . in this unemployment. is called seasonal unemployment.Š The unemployment occur due to the change in a seasons or season factors.

economy or environment is called structural unemployment .Š The unemployment due to structural changes in the organization.

During recoveries and boom unemployment is low but during recession and depression unemployment is high .Š It Occurs During Cyclic Changes i.e.

Š Š Structural unemployment occurs when the quantity of labor supplied exceeds the quantity demanded. . Structural unemployment is often thought to explain longer spells of unemployment.

In other words its marginal revenue product is either nil if that worker is withdrawn total output may increase. .Š Š It occurs when contribution of workers is less than what he should produce by working in normal hours per day.

experience education. training and specialization it is said to be underemployed which is another type of employment. skill. .Š If the labor force receiving reward less than there abilities.

6% (2008 est.) 12.Š Unemployment rate: 14% (2009 est.) note: substantial underemployment exists .

.

2010 14.48 % 2005 est.50 % 72 -1. Definition: This entry contains the percent of the labor force that is without jobs . 2006 6.28 % 2003 est. 2008 5.52 % 2006 est.14 % 2008 est.00 % 143 89.60 % 65 -20.70 % 122 -1.60 % 71 -13.30 % 75 7.Š Š Year Unemployment rate Rank Percent Change Date of Information 2003 7.79 % 2004 est. 2007 6.19 % 2009 est. 2005 8.80 % 119 2002 est. 2009 7.85 % 2007 est. 2004 7.40 % 92 32.

Sign up to vote on this title
UsefulNot useful