Economics

Presentation
Topic :Unemployment

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include structural factors such as
changes in technology, globalization,
and shifts in industry demand, as well
as cyclical factors such as recessions
and fluctuations in the business cycle.
Other factors, such as discrimination,
skills mismatches, and barriers to entry
may also contribute to unemployment.
Therefore, a comprehensive
understanding of unemployment
requires consideration of a range of
economic, social, and political factors,
as well as policy interventions that
address these underlying causes.
 The effects of unemployment can be felt at both an individual and societal level. Some common effects of
unemployment include:

1. Financial stress: Unemployment can lead to financial stress for individuals and their families. Loss of
income can make it difficult to pay bills, meet basic needs, and accumulate savings.
2. Mental health issues: Unemployment can also have negative effects on mental health, leading to depression,
anxiety, and other mental health issues.

3. Social isolation: Unemployed individuals may feel socially isolated and disconnected from their peers,
leading to feelings of loneliness and low self-esteem.

4. Reduced productivity: High levels of unemployment can result in reduced productivity and economic
output, leading to a decline in overall economic growth.

5. Increased crime rates: When individuals lack a stable source of income, they may be more likely to engage
in criminal activity as a means of survival.

6. Strained public services: High levels of unemployment can also strain public services, such as healthcare
and social services.

Overall, the effects of unemployment are wide-ranging and can have significant impacts on individuals,
families, and society as a whole.
•Unemployment is a situation in
which individuals who are willing
and able to work are unable to
find employment. There are
several different theories of
unemployment, each of which
provides a different explanation
for why unemployment occurs and
how it can be addressed.
 Unemployment
Unemployment, according to the OECD, is people above a
specified age not being in paid employment or self-employment
but currently available for work during the reference period.
Unemployment is measured by the unemployment rate, which is
the number of people who are unemployed as a percentage of the
labour force
Structural
unemployment
•The structural theory of unemployment suggests that
unemployment is caused by structural changes in the
economy that make certain skills or industries obsolete or
less in demand. According to this theory, workers who are
unable or unwilling to adapt to these changes may become
unemployed.
•The structural theory of unemployment suggests that there
is a mismatch between the skills and qualifications of
workers and the skills and qualifications required by
employers. For example, technological advancements may
make certain jobs obsolete, and workers who are not able to
adapt to these changes may find it difficult to find
employment in their field. In addition, changes in consumer
preferences may lead to a decline in demand for certain
products, which can lead to job losses in those industries.
•In conclusion, the structural theory of unemployment
suggests that unemployment is caused by structural changes
in the economy that make certain skills or industries obsolete
or less in demand. Addressing structural unemployment
requires long-term investments in education and training
programs, as well as efforts to create new job opportunities in
emerging industries.
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The frictional theory of unemployment
suggests that unemployment is caused by
the time it takes for workers to search for
and find new jobs. According to this
theory, there is always a certain level of
unemployment in the economy as workers
leave jobs or enter the labor force, and it
takes time for them to find new
employment.
The frictionalFrictional
theory of unemployment is
typically short-term
suggests that andof
some level is unemployment
not seen as a
major
is concern
natural for policymakers.
and unavoidable, as it takes time
for workers to find suitable job
opportunities that match their skills and
preferences. According to this theory, some
workers are always unemployed, either
because they have left one job in search of
a better opportunity or because they are
just entering the labour force.
Critics of the frictional theory of unemployment
argue that it underestimates the role of
macroeconomic factors, such as recessions or
changes in government policy, in causing
unemployment. They also argue that frictional
unemployment may not be evenly distributed
across the labor market, with some groups
experiencing higher levels of frictional
unemployment than others.
In conclusion, the frictional theory of
unemployment suggests that some level of
unemployment is natural and unavoidable due to
the time lag between workers searching for jobs
and employers filling job vacancies. Policies that
reduce barriers to job search and improve
workers’ skills and mobility can help to reduce
frictional unemployment and promote a more
efficient and flexible labor market.
•Cyclical Theory of
Unemployment:
 The cyclical theory of unemployment suggests that unemployment is caused by fluctuations in the
business cycle. According to this theory, when the economy is in a recession, firms will cut back on
production and lay off workers, leading to an increase in unemployment. When the economy is in an
expansionary phase, firms will hire additional workers, reducing unemployment.
The cyclical theory of unemployment suggests that fluctuations in the business cycle can cause changes
in the level of unemployment. According to this theory, during periods of economic expansion or boom,
the demand for labor increases, leading to lower levels of unemployment. Conversely, during periods of
economic recession or contraction, the demand for labor decreases, leading to higher levels of
unemployment.
During a recession or contraction, businesses may reduce production or shut down altogether, leading
to job losses. This can also lead to reduced consumer spending, which further exacerbates the problem
by reducing demand for goods and services and creating a downward spiral of job losses and reduced
spendin
In conclusion, the cyclical theory of unemployment
suggests that fluctuations in the business cycle can
cause changes in the level of unemployment.
Government policies can play a role in reducing the
negative effects of economic downturns on
employment, but these policies must be carefully
targeted to address the underlying causes of
unemployment and promote long-term economic
growth.
In conclusion, unemployment is a complex issue with
multiple causes. The different theories of
unemployment provide a range of explanations for why
unemployment occurs and how it can be addressed.
Policymakers must consider these different theories
when designing policies aimed at reducing
unemployment.
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