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Unemployment

Unemployment. MEASURING UNEMPLOYMENT. Category of population: employed unemployed – includes people who are not employed and fulfil specific conditions not in the labour force . THREE KINDS OF UNEMPLOYMENT. Frictional unemployment Structural unemployment Cyclical unemployment

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Unemployment

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  1. Unemployment

  2. MEASURING UNEMPLOYMENT Category of population: • employed • unemployed – includes people who are not employed and fulfil specific conditions • not in the labour force

  3. THREE KINDS OF UNEMPLOYMENT • Frictional unemployment • Structural unemployment • Cyclical unemployment Other types: • seasonal unemployment • hidden unemployment

  4. DIFFERENT VIEWS AT THE UNEMPLOYMENT PROBLEMS • LIBERALISTS –Liberal economics consider unemployment as expression of short-run imbalance between the demand for and the supply of labour • INTERVENTIONISTS – Keynesians representatives consider unemployment to be involuntary

  5. CAUSES OF UNEMPLOYMENT • period of economic recession • launching a new technology • saturation of the market with long durable goods • too high wage rate set by government as a minimum level

  6. The supply of labour – the individual supply of labour has a special shape – is bended regressively, which is causes due to two effects: substitution effect income effect The demand for labour – express a normal relationship between the rate of wages and amount of demanded labour DEMAND x SUPPLY

  7. BALANCE IN LABOUR MARKET • E – market-clearing level of wage člabour market is in balance • w1 – state set the minimum wage rate too high BASIC POSSIBILITIES OF DEFEATINGUNEMPLOYMENT • stimulation of demand for labour from the government • regulation of supply of labour

  8. NEGATIVE IMPACTS OF UNEMPLOYMENT • being unemployment high, the economy is not producing up to par • push down an efficiency of economy (state expenditures require increase of tax rates ) • social impacts (criminality, physical and psychological health problems, losing qualification..)

  9. NATURAL RATE OF UNEMPLOYMENT • the unemployment rate at which labour and product markets are in balance • it’s the lowest level that can be sustained, it thus represents the highest sustainable level of employment and corresponds to a nation’s potential output • NRE rises during the time

  10. Examples • Calculate the rate of unemployment in economy, where total number of population is 12 650 420, 48% is included in labor force and 264 550 are registered job applicants at labor office. • Calculate the number of employed people in the country, where the rate of unemployment is 6,4 %, as long as 198 800 people is registered at labour office and 260 700 are unemployed in total.

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