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 1. Frictional unemployment 2. Structural unemployment 3. Cyclical unemployment Other types: seasonal unemployment hidden unemployment

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

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

DEMAND x SUPPLY 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

BALANCE IN LABOUR MARKET E – market-clearing level of wage  labour market is in balance w 1 – state set the minimum wage rate too high BASIC POSSIBILITIES OF DEFEATING UNEMPLOYMENT 1. stimulation of demand for labour from the government 2. regulation of supply of labour

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..)

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

Examples 1. Calculate the rate of unemployment in economy, where total number of population is , 48% is included in labor force and are registered job applicants at labor office. 2. Calculate the number of employed people in the country, where the rate of unemployment is 6,4 %, as long as people is registered at labour office and are unemployed in total.