 DEFINITION

 TYPES OF UNEMPLOYMENT
 EFFECT OF UNEMPLOYMENT
 CALCULATION OF
UNEMPLOYMENT RATE
 MEASURES TO CONTROL
UNEMPLOYMENT
 Unemployment is defined as labour
force participants being available
and willing to work but are unable
to finds jobs.

 Unemployment rate is a percentage

of the labour force who are
unemployed and are actively seeking
employment.
 All person above 16 years of age and older who
are working or actively seeking work.
 Is everyone above 16 years of age included in
labour force?
 People from total population above 16 years of
age who are not in any institution and who are
either employed or unemployed BUT actively
seeking employment.

 LABOUR FORCE = EMPLOYED + UNEMPLOYED

PERSONS
 ~Frictional unemployment is
the unemployment caused by
new entrants into the job
market and people quitting a
job just long enough to look for
and find another one.
 ~This may even happen in full
employment when people quit
their jobs for a better position
or higher wages or when fresh
graduates are actively seeking
a job.
~Cyclical unemployment occurs
when there is a lack of jobs
because of downswing in
business cycle or a recession.
~When economy falls into a
downswing or recession, the
real GDP falls, the demand for
goods and services decreases,
companies close down and
workers are laid off.
~Structural unemployment
arises due to structural
changes in the economy of a
country.
~A worker loses a job because that
job is no longer a part of the
structure of the economy.
~The composition of the labour
force does not respond quickly to
meet changing demands,
technological changes or
competition from imported goods.
~Seasonal unemployment
arises due to seasonal
variation in the activities of
particular industries.
~This may be caused by
climatic changes or changes
in fashion or by the
inherent nature of the
industries themselves.
 Effects on individuals and society
- Loss of income and self respect

- Loss of job skills

- Social and political problems

 Effects on the economy

Unemployment rate (%)
= Number of Unemployed X 100
Labour Force
 EXAMPLE:
Under 16
And/or
Institutionalized
(71.8 Million)

Unemployment rate:
Not in (7.1 mil./153.1 mil.) x
Labor Force
(78.7 Million) 100% =
Total
Population 4.6%
(303.6 Million)

Employed Labor
(146.0 Million) Force
(153.1 Million)

Unemployed
(7.1 Million)
 2019 2020 2021

TOTAL 18000 18500 18700

POPULATION
LABOUR FORCE 6834.1 7046.5 7527.9

TOTAL 6350.8 6621.0 6848.9

EMPLOYMENT

Calculate the unemployment rate for the years

2019, 2020 and 2021.
 Year Total Labour Force Total employed Unemployment
(thousands of persons) (thousands of rate (%)
persons)
2017 8372.0 8162.7

2018 9038.2 8805.1

2019 8880.9 3.2

2020 9010.0 3.0

2021 9892.1 3.6

Calculate the total employed and the unemployment

rate.
1) MONETARY POLICY (EXPANSIONARY)

Open market operation

Lowering the reserves requirements

Lowering the discount rate

Lowering the interest rate

2) FISCAL POLICY (EXPANSIONARY)

Decrease in taxes

Increase in government
expenditure
3) DIRECT CONTROL MEASURES

Providing training and technical

education

Development of new land

Job creation in various sectors in an

economy
THE END