THE EFFECTS OF UNEMPLOYMENT

OBJECTIVES

List and explain the effects of unemployment including the

possible benefits and possible costs
List and explain the measures to reduce each type of
unemployment
REVISION
EFFECTS OF UNEMPLOYMENT VIDEO

list possible effects of unemployment after

watching the video
POSSIBLE COSTS
POSSIBLE COSTS

No means to enjoy a good quality of life leading to a fall in

standard of living.
Depressed and discontented- adding to social problems such as
crime, drug abuse and idleness.
Erodes quality of human capital-lose skills due to lack of practice
Society is not using all its resources to produce goods and
services- fall in government revenue from taxation
VIDEO

Identify possible benefits of unemployment

POSSIBLE BENEFITS
POSSIBLE BENEFITS
Opportunity to do extra training

Embark on retraining programs

Reduces cost push inflation-

less labor is hired labor costs are reduced prices of goods fall inflation falls

The labor market is a buyer’s market- the buyers of labor have the upper hand, as they are demanding fewer workers
than there are available for work. This makes workers less willing to take industrial action. Workers will be more
productive and might voluntarily take on training.
 In pairs, suggest the measures that can be used to reduce each type of
unemployment. pg 144 and 145
Type of Ways to reduce
• Retraining programmes unemployment unemployment
• Government projects (construction of infrastructure) Frictional
• Job centres and more advertising of available jobs
• Government grants to businesses located in areas where  Search Government can spend
directly on the creation
there are unemployed persons of job centres.
• Government can spend directly on the creation of job  Seasonal
centres.
• Reflationary fiscal policy (increase in government  Structural
spending on development projects)  Cyclical
• Reflationary fiscal policy (decrease in taxes, increases
consumption and investment and demand increases) Real-wage
• Reflationary monetary policy increases aggregate demand, unemployment
output increase and more workers are hired.
• Regulations and agreements with trade unions to avoid
making demands to increase the wage rate
SUGGEST THE MEASURES TO REDUCE EACH TYPE
OF UNEMPLOYMENT

Type of Ways to reduce unemployment

unemployment
Frictional Retraining programmes, Government projects (construction of infrastructure), Job centres
and more advertising of available jobs, Government grants to businesses located in areas
where there are unemployed persons
 Search Job centres and more advertising of available jobs and Government can spend directly on
the creation of job centres.
 Seasonal Retraining programmes, Government projects (construction of infrastructure) and
Reflationary fiscal policy (increase in government spending on development projects)

 Structural  Retraining programmes and Reflationary fiscal policy (increase in government spending on
development projects)

 Cyclical  Reflationary fiscal policy (decrease in taxes, increases consumption and investment and
demand increases) and Reflationary monetary policy increases aggregate demand, output
increase and more workers are hired.

Real-wage Regulations and agreements with trade unions to avoid making demands to increase the wage
unemployment rate
MEASURES TO REDUCE EACH TYPE OF UNEMPLOYMENT
 
1. Retraining programs
2. Government projects
3. Job centers and more advertising of available jobs
4. Reflationary fiscal policy
5. Reflationary monetary policy
6. Regulations and agreements with the trade unions
IN PAIRS DRAW A CONCEPT MAP ABOUT UNEMPLOYMENT

 Types
 Advantages
 Disadvantages
 Measures to reduce unemployment
 Quiz next class