GROUP MEMBERS:

 ALI HASSAN (SP20-BBA-033)

UNEMPLOYME  MAHMOOD-UL-HUSNAIN (SP20-BBA-
038)
NT  AIMEN IKRAM (SP20-BBA-037)
 HASSAN KHAN LODHI (SP20-BBA-016)
 ASIF ASHRAF (SP20-BBA-006)
 Introduction
Factors of unemployment
Unemployment and inflation
PRESENTATION Causes of unemployment
AGENDA Unemployment and interest rate
Effect of unemployment on economy
Solutions of unemployment
Conclusion
INTRODUCTION

Unemployment refers to a
situation in which the worker
who are capable of working
and willing to work do not get
employment.
FACTORS OF
UNEMPLOYMENT
 Factors of unemployment
are numerous some are as
follows
 Poor Governance
 Political instability
 Corruption
FACTORS OF UNEMPLOYMENT

 Poor Governance
 Good governance is an essential precondition for
employment as it establishes the enabling
regulatory and legal framework essential for the
sound function of land , labour and capital and
other factors of market
 Whereas good governance is non-existent in
Pakistan and poor Governance is taken one of the
key underlying causes of unemployment in
Pakistan.
FACTORS OF
UNEMPLOYMENT

 Political instability
 Political stability is fundamental
to the creation of enabling
environment for growth and
development

 Unfortunately, the political

dilemma has furthermore
cornered this issue.
FACTORS OF UNEMPLOYMENT

 Political instability
 Economic agent, particularly investor must be reassured with regard to
the continuation of policies, should have confidence in the government
credibility in order to operate effectively, and n case of investor be
induce to take risk.
FACTORS OF UNEMPLOYMENT

Corruption

Corruption is one of the most dangerous factors that eroded Pakistan economic and
governance system

In 2008, Pakistan was ranked 46th most corrupted country out of 180 country

The persistently rampant corruption in Pakistan not only jeopardize it’s resolve to fight
against unemployment rather adding to the menace of unemployment from all directions.
  Low levels of unemployment correspond with higher inflation, while
UNEMPLOYMENT high unemployment corresponds with lower inflation and even deflation.
AND INFLATION During periods of high unemployment, customers purchase fewer goods,
which puts downward pressure on prices and reduces inflation.
HOW DOES INFLATION
AFFECT UNEMPLOYMENT

 Inflation can cause unemployment when:

 The uncertainty of inflation leads to lower
investment and lower economic growth in the
long term. Inflation leads to a decline in
competitiveness and lower export demand,
causing unemployment in the export sector
(especially in a fixed exchange rate).
  In the short-run, inflation and unemployment are inversely
DOES
UNEMPLOYMENT related; as one quantity increases, the other decreases.
RISE WITH INFLATION  In the long-run, there is no trade-off.
CAUSES OF UNEMPLOYMENT

 Slow economic growth

Pakistan economy is underdeveloped, and role of economic
growth is very slow. This slow growth fails to provide
enough unemployment opportunities to the increasing
population.
 Increase in Population
Constant increase in population has been a big problem in
India. It is one of the main causes of unemployment. The
rate of unemployment is 11.1% in 10th Plan.
 Agriculture is a seasonal occupation
Agriculture is underdeveloped in Pakistan. It provides
seasonal employment. Large part of population is dependent
on agriculture. But agriculture being seasonal provides work
for a few months. So, this gives rise to unemployment.
CAUSES OF UNEMPLOYMENT

 Joint family system

In big families having big business, many such persons will
be available who do not do any work and depend on the joint
income of the family. Many of them seem to be working but
they do not add anything to production. So, they encourage
disguised unemployment.
 Fall of cottage and small industry
The industrial development had adverse effect on cottage and
small industries. The production of cottage industries began to
fall, and many artisans became unemployed
 Slow growth of industrialization
The rate of industrial growth is slow. Though emphasis is laid
on industrialization, yet the avenues of employment created
by industrialization are very few.
CAUSES OF UNEMPLOYMENT

 Less savings and investment

There is inadequate capital in Pakistan. Above all, this capital has
been judiciously invested. Investment depends on savings. Savings
are inadequate. Due to shortage of savings and investment,
opportunities of employment have not been created.

 Causes of under employment

Inadequate availability of means of production is the main cause of
under employment. People do not get employment for the whole
year due to shortage of electricity, coal and raw materials.

 Defective planning
Defective planning is the one of the cause of unemployment. There
is wide gap between supply and demand for labor. No Plan had
formulated any long-term scheme for removal of unemployment.
CAUSES OF UNEMPLOYMENT

 Inadequate irrigaion system

 Even after the completion of 9th five plans, 39% of
total cultivable area could get irrigation facilities.Due
to lack of irrigation, large area of land can grow only
one crop in a year. Farmers remain unemployed for
most time of the year.

 Immobility of labour
 Mobility of labour in India is low. Due to attachment
to the family, people do not go to far off areas for jobs.
Factors like language, religion, and climate are also
responsible for low mobility. Immobility of labour
adds to unemployment.
 All these factors add to unemployment.
UNEMPLOYMENT
AND INTEREST
RATE

Hence high interest rates cause

lowering the price
levels (inflation). Interest rate
may be a cause to induce or
reduce the rate of
unemployment. It also affects
the investment in the economy
and capability to provide loans
so that unemployed persons in
economy are able to run their
own businesses.
HOW DOES CUTTING
INTEREST RATES REDUCE
UNEMPLOYMENT

Lower rates decrease the cost of

borrowing and encourage people
to spend and invest. This
increases AD and should also
help to increase GDP and reduce
demand deficient
unemployment. Also, lower
interest rates will reduce
exchange rate and make exports
more competitive.
EFFECT OF UNEMPLOYMENT ON ECONOMY

Unemployment has costs to a society that are more than just financial.
Unemployed individuals not only lose income but also face challenges to their
physical and mental health. ... Governmental costs go beyond the payment of
benefits to the loss of the production of workers, which reduces the gross
domestic product (GDP).
HOW DOES
UNEMPLOYMENT AFFECT
THE INDIVIDUAL

Unemployment has both

individual and social
consequences that require public
policy interventions. For the
individual, unemployment can
cause psychological distress,
which can lead to a decline in
life satisfaction. It can also lead
to mood disorders and substance
abuse.
SOLUTION OF UNEMPLOYMENT

 Better education
 Motivation programs
 Programs against drug addiction and
homeless
 Fight discrimination
 Subsidies for companies how are
reintegrating unemployed person
 Fiscal and monetary measure in financial
crisis situation
 Fight structural unemployment
CONCLUSION

Unemployment is a serious issue for any economy as ,

It creates negative affects to unemployed as they are
jobless and suffer from worse prospects to find new
job and those who are employed feel less secure to
keep their jobs in future.
THANK YOU!