Question

Instruction:

What is Unemployment Rate and what are the factors that cause the UR to increase or decrease?

Do your own research. Write one page to define the Unemployment Rate and explain the factors affecting the UR. (Mention your reference at the end)

Answer 1

The iunemployment irate irefers ito ias ithe ipercentage iof iunemployed iworkers iin ithe itotal ilabor iforce iin iany icountry's ieconomy. iWhen ithe iworkers iare iavailable, iable, iwilling ito ifind ia iwork iand iactively iseeking iwork ibut ithere iare ino iworking iopportunities iin ithe imarktet.The itotal ilabor iforce iincludes iall iemployed iand iunemployed ipeople iwithin ian ieconomy iof iany icountry. iThe iunemployment irate ishows irealistic iimage iof ithe ieconomy’s ispare icapacity iand iunused iresources. iUnemployment irate iis ia icyclical itrend iwhich idecreases iduring ithe iperiod iof ithe iexpansion iin ithe ieconomy isuch ias ithe igrowing idemand ifor ithe iproduction ilead ito ihire imore iworkers iby ithe icompanies iwhereas i iunemployment irate iincreases iduring ithe islow idown iperiod iof ieconomic iactivities iint ihe icountry. iFurther, ithere iare idifferent imethodologies ifor imeasuring ithe iunemployment irate iwhich idepends ion ithe idifferent icountries iand ialso, icountries iuse idifferent isources ito icalculate ifor iunemployment irate.

The ifactors ithat icause ithe iunemployment irate ito iincrease ior idecrease iare:-

• Advancement iin iTechnology i- iThe iuse iof ihuman ieffort iare ireplacing iwith ithe iuse iof itechnology idue ito iwhich iit ilead ito idecrease iin ithe ilabor iforce. iThis ireduction iin ithe ilabor iforce iincreases ithe iunemployment irate iof ia icountry.
• Poverty i- iThere iare idirect irelationship ibetween ipoverty iand iunemployment irate. iIf ipoverty iincreases ithen iunemployment irate iincreases iwhereas iif ipoverty idecreases ithen iunemployment irate idecreases. iPoverty ican ibe idefined ithat iwhen ia iperson iis ipoor ibecause ihe iis iunemployed iand iif ihe iis iunemployment, ithen ihe ifaces ipoverty inaturally.
• Defective iSystem iof iEducation i- iThe idefective isystem iof ieducation iof ia icountry iis ia iclear iimage iof ifailing ito ishape ithe imental iand iphysical idevelopment iin ithe ipopulation. iFurther, ithe iliterate iperson ican ihave imore ijob iopportunities ias icompared ito iilliterate iperson. iDue ito ireduction iin ithe iopportunities ifor ithe iilliterate ipeople ilead ito iincrease iin ithe iemployment irate. i
• Rapid iGrowth iin ithe iPopulation i- iDue ito ithe ilimitation iin ithe iemployment iopportunities iin ithe imarket, ithe irapid igrowing ipopulation ihas ibeen ifacing ithe ilack iof ijob iopportunities iin ithe ieconomy. iPopulation igrowth idirectly irelates iwith ithe iunemployment irate. iTherefore, iif ipopulation iincreases ithen ithe iunemployment irate iincreases iand ivice-versa. i
• Immigration iPolicy i- iThe iimmigration ipolicy iof ia icountry iaffects ithe inumber iof iworkers ientering ithe icountry idue ito iwhich irapid iincrease iin ithe ilabor iworkforce. iBut ithe ilimited iopportunities iin ithe imarket ilead ito iunemployment iamong ithe ilarge inumber iof ilabor iworkforce. iThis igrowth iin ithe iunemployment ilabor iworkforce iincreases iin ithe iunemployment irate iof ia icountry. i