Question

ELABORATE ON THE COSTS OF UNEMPLOYMENT.

Answer 1

Unemployment can be defined as a situation in which a person who is willing to work is not able to find one at the prevailing wage rate. One of serious issue that the global economy is confronting is with the threat of widespread unemployment.

The cost of unemployment means the effect of unemployment and can be divided into economic as well as non economic costs of unemployment.

First let us see the economic cost of unemployment:

1. Loss of income or revenue of the unemployed is the foremost economic cost of unemployment.

2. Further this can lead to the deficiency in the demand of goods and services by the unemployed which curbs the production and hence may affect the economic condition of a nation

3. Loss of revenue to the government in the form of taxation is another economic cost of unemployment

4.Market instabilities

The non - economic cost of unemployment includes

1. Poverty, lack of food/nutrition,lack proper health care, lacks personal hygiene etc.

2. Social alienation and the resulting mental distress or depression can also be some non economic cost of joblessness.

3. Social and political instabilities.