...Macroeconomics and Rate of Unemployment Oria Cummings Embry-Riddle Aeronautical University Macroeconomics and Rate of Unemployment In essence, macroeconomics is the study of economy as a whole. Unlike microeconomics, which relates to the study of a single decision and ways it affects other economic variables, macroeconomics strives to understand aggregate economy and ways it is affected by changes in employment, local production, and inflation. Further, the government through the central bank and other bodies uses analytical models to understand changes in aggregate economic determinants such as economic growth or rate of employment thereby formulating policies that strive to accelerate economic growth. Understandably, one of the economic variables that help establish aggregate changes in the economy is changes in rate of unemployment. Unemployment refers to a number of persons ready and willing to work in particular type of a job at current market for pay but cannot secure one. In essence, unemployment as an economic indicator measures the health of the economy (Mercatus.org, 2016). For instance, high rates of unemployment indicate poor performing economy, while a decline in the rate of unemployment indicates a healthy economy or economic growth. Therefore, a measure of the rate of unemployment is an aggregate used to determine economic performance and changes that affect the overall performance of the economy. Therefore, this essay strives to elucidate aggregate economy...
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...TERM PAPER UNEMPLOYMENT AND ITS SITUATION IN ASIA Submitted to: Sir Abdul Farooq Submitted by: Muzammil Shahid (10) Ifzal Ahmed (09) Hajra Fazal(29) Adeel Abid(08) (F005-BBA) Date: 11, December 2006 Contents 1. Introduction 3 1.1 Statement of problem 3 1.2 Objectives of Study 6 1.3 Methodology and source 7 1.4 Organization 7 2. Review of literature 8 3. Analysis of Data 23 3.1 Global Causes of Unemployment 23 ...
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...Topic V Employment, Unemployment and Poverty • Economic Activities: Activities that contribute to the National Income of the country • Employment: All those who are engaged in an economic activity in whatever capacity are called employed or Workers • Full Employment: Situation under which all those who are willing &able to work at the prevailing wage rates are employed according to their skills • Under-Employment: Situation under which persons are working less than they are willing to work or they do not get wages according to their skills. • Unemployment: Situation when a part of population is seeking job but is unable to get employed due to lack of work. • Types of Unemployment 1. Functional/Frictional Unemployment: Refers to temporary unemployment during the interval period when people change from one job to another. 2. Structural Unemployment: Refers to unemployment due to mismatch between available &required skill set in the economy. Result of structural changes in the economy. • Frictional & Structural unemployment are unavoidable in most economies & together are referred as Natural Rate of Unemployment or minimum unemployment rate acceptable even under full employment situation. 3. Cyclical Unemployment: Caused due to business cycles. When economic boom is followed by a slowdown, production falls &industries retrench employees to cut costs, causing cyclical unemployment. 4. Seasonal Unemployment: Caused due to seasonal nature of agricultural production leading...
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...GDN Working Paper Series Education, Training and Youth Unemployment in Kenya Joy Kiiru, Eldah Onsomu and Fredrick Wamalwa Working Paper No. 26 October 2009 About GDN The Global Development Network (GDN) is a leading International Organization of developing and transition country researchers and policy and research institutes promoting the generation, sharing, and application to policy of multidisciplinary knowledge for the purpose of development. Founded in 1999, GDN is now headquartered in New Delhi, with offices in Cairo and Washington DC. This Working Paper has been prepared within the GDN’s Global Research Project Institutional Capacity Strengthening of African Public Policy Institutes to Support Inclusive Growth and the MDGs. The project has been fully funded by the United Nations Development Programme’s (UNDP) Bureau for Development Policy (BDP) and Regional Bureau for Africa (RBA). The views expressed in this publication are those of the author(s) alone. © GDN, 2009 2 Education, Training and Youth Unemployment in Kenya Joy Kiiru, Eldah Onsomu and Fredrick Wamalwa 1 Abstract Young people in Kenya constitute 30% of total population while youth unemployment constitutes 78% of total unemployment. In nearly all developing countries the rate of urban unemployment in the 15-24 age group is at least double the rate of all other age groups. These high rates of urban unemployment in this age bracket are also seen in developed countries, although the rates are far lower than...
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...Human Development Research Paper 2010/30 Dealing with employment risk: Policy options for emerging markets Simon Commander United Nations Development Programme Human Development Reports Research Paper November 2010 Human Development Research Paper 2010/30 Dealing with employment risk: Policy options for emerging markets Simon Commander United Nations Development Programme Human Development Reports Research Paper 2010/30 November 2010 Dealing with employment risk: Policy options for emerging markets1 Simon Commander Simon Commander is Managing Partner at the EBRD, IE Business School and Altura Advisers. Email: scommander@alturaadvisers.com Comments should be addressed by email to the author(s). 1 Thanks to Jeni Klugman for discussion and comments and to Ginette Azcona for help with data. Abstract The paper looks at the experience of advanced economies in dealing with employment volatility. It examines in detail the impact of labour market institutions on equilibrium unemployment and the p ossible le ssons f or e merging ma rket e conomies tr ying to d esign p olicy f or d ealing w ith unemployment and a wider, growing demand for social protection from their citizens. Part of the paper concentrates on t he t ransition e conomies whose i nstitutional c ontext m ay b e r elevant t o other emerging ma rkets. S ome leading principles in policy d esign a re elaborated th at take into account s ome o f t he co mmon f eatures o f em erging m arkets, n...
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...Historical Background Unemployment as a concept has attracted large coverage both domestically and internationally. It has been the most persistent and unmanageable problem facing both developed and developing nations of the world. The fact remains that a hundred percent employment exist in no nation of the world. All nations experience at least a minute proportion if not large rate of unemployment and a major macroeconomic goal of most if not all nations is to combat unemployment problems in their economies. Unemployment has been categorized as one of the serious impediments to social welfare. Apart from representing a colossal waste of a country’s manpower resources, it generates welfare loss in terms of lower output, thereby leading to lower income and wellbeing. The need to avert the negative effects of unemployment has made the tackling of unemployment problem to feature very prominently in the development objectives of many developing countries. One of the steps taken by the Nigerian government to reduce the problem of unemployment in Nigeria was the establishment of National Directorate of Employment (NDE). Unemployment has been defined as the absence of a job by an able bodied person. It is a term often denoting the percentage of people in the labour force who are not working. The concept of unemployment is not an entirely new one in Nigeria. Patrick Koshoni, (2005), a former Labour Minister has this to say “The problem of mass unemployment is not new, it has been...
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...Employment generation and expansion: Abstract Creating employment is vital on many levels. Politically, employment opportunities give the population a stake in the peace process by providing young men and women with alternatives to violence. Economically, employment provides income to poor families, revives domestic demand for goods and services, and stimulates overall growth. Socially, employment promotes social healing and improves social welfare. This essay focuses on how we can create and expand employment opportunities in Nigeria in order to solve Nigeria’s security challenges. This essay starts by giving an overview of the Nigerian employment landscape since Independence, it then adapts Joachim Von Braun’s Employment generation chain to schematically explain the economic impact of employment creation, and finally it proffers solution on how Nigeria can create jobs for its population in order to live in a safer Nigeria. The Nigerian Employment Landscape Employment generation is a primary economic development goal of every industrializing nation. More jobs generally mean more economic activities, more tax revenues for the government, and less idle time. Job growth permits the expansion and improvement of public goods and services, leading to an improved quality of life and enhanced prospects for future employment growth. In addition, a vibrant job market provides an incentive for citizens to continue their education since the rewards for such are evident in better employment...
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...1 Background of the study The mass unemployment of qualified and able-bodied men/women has generated much concern all over the world. ILO (2011) noted that despite the rapid recovery in the global economy that took place in 2010, following two years of severely adverse labour market condition, global unemployment remained elevated in 2010. According to ILO (2011) the number of unemployed stood at 205 millions (6.2%) in 2010. The above scenario propelled Nigerian like other nations’ government around the world to take some practical steps towards alleviating unemployment. Despite the frantic efforts towards the eradication of this phenomenon, it is sad to know that Nigerian economy continues to experience increase in unemployment rate. Lack of employment opportunities in Nigeria has resulted in poverty, in turn poverty needs to alienation of poor people from political-economic function of the society. The population of Anambra State according 2006 census is 4,055,048. Out of this figure, 2,500,000 are unemployed amounting to 45% unemployment rate in Anambra State. Lack of employable skills is no doubt, a major contributing factor to the problem of unemployment world over and especially in Nigeria. This is so because, the educational system operated at post-independence era in the country placed emphasis on liberal education rather than acquisition of vocational skills, which prepare the individual for better employment opportunities. In other words, the...
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...The Impact of Privatization of Public Services on the Public Sector Employment in the U.S. Literature review Privatization is one of the most discussed topics in the modern era of public management. Traditional norms of public management are getting unclear day by day because of the increased consideration for the efficiency and effectiveness of affairs of public sector organizations. One of the way governments adopted to increase the efficiency and effectiveness is the privatization of public services. Varner (2006) in his report titled ‘Government Privatization History, Example, and Issues’ given the definition of privatization as “Privatization is the process of transferring property from public ownership to private ownership and/or transferring the management of a service or activity from the government to the private sector”( Varner, 2006, p. 1). This paper assumes and proposes the privatization as independent variable and analyzes its impact on unemployment. So being an independent variable in a study it is very much appropriate to identify different aspects related to privatization. The significant contribution of Varner (2006) is that he has specified the forms of privatization as; “Complete Privatization, Privatization of Operations, Use of Contracts, Franchising, and Open Competition” (p. 1). In addition, he said that moves address the idea of reason what may be the causes ultimately ends up in privatizing the public entities. The provided list of seven reasons...
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...1. ------------------------------------------------- Unemployment problems of bangladesh ------------------------------------------------- Rising unemployment and declining share of the poorer populace in national income are two major challenges for the country in achieving the Millennium Development Goals (MDGs), says a government report. “Appropriate interventions are required so that benefits of economic growth reach the poorest quintile,” observes the report prepared by Planning Commission on progress towards MDGs. In 1992, the poor’s share in national income was 6.5 percent. But it dropped to 5.3 percent in 2005, marking a decline of 18.46 percent in 13 years. A steady annual growth around 5 percent on average in the 1990s and 6 percent in the 2000s helped the country to draw nearer to implementation of many of the MDGs, eight goals that the United Nations member states have pledged to accomplish by the year 2015. Halving the number of people living in extreme poverty, ensuring universal access to primary education, eliminating gender disparities, reducing child mortality rate and maternal mortality ratio, and combating HIV/AIDS and other diseases are among the targets officially adopted in 2000. One of the shortcomings in Bangladesh’s efforts to attain MDGs is failure to make growth process sufficiently pro-poor, says the report, adding that depleting share of the poorer segments of the society in national income and consumption shows that the poor are not benefiting...
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...2008–2009 automotive industry crisis and regional unemployment in Central Europe Introduction- Employment in central Europe increased sharply due to the progress of the car industry, but such thing has its drawbacks since we cannot mainly focus on one industry to be the backbone of the economy. Consumers have different taste and may easily shift their interest to other firms outside the region; a clearer example would be that of the oil industry in GCC countries, as they stopped depending on oil as their essential survival and the only way by which they can boost their economy. What is even worst for central European countries is them being unable to control or possess their own industries, and the reason to that being external forces trying to get the upper hand. The launch of Hyundai line during the ends of 2008 helped the automotive industry to keep going, even if it was for a short period of time, because this line led to an increase of 3.2%. Nevertheless, we still cannot give a solid judgment of the state of the economy since the year before that witnessed a sharp decline of 1.1%. Some might believe this percentage is not a place to be worried, but global production continued declining till it reached 10% by 2009, the proportion was below the original expectation of the output for the industry. Those fluctuations led to the loss of 26000 jobs which eventually led to an economic crisis because of the escalation of unemployment that will have a cost to the region whether...
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...Economics (Econ 1) 1 EMPLOYMENT AND UNEMPLOYMENT (INTRODUCTION) • The Keynesian revolution was driven by the desire to explain the high unemployment (U) of the 1930’s. • The solutions proposed by Keynes, focused on the use of countercyclical fiscal policy (AD demand management) to cure U. • Hence countercyclical fiscal policy was seen as effective in smoothening business cycles. • Cyclical U is associated with GDP being below equilibrium. 2 EMPLOYMENT AND UNEMPLOYMENT (INTRODUCTION) • But it is possible to have equilibrium U even when GDP is at its potential level. • It is therefore necessary to explain both cyclical and equilibrium unemployment. • Under this topic, we will cover the following: – Measurement and definitions, – Theories of U, – Economic costs of U, and – Solutions of U. 3 EMPLOYMENT AND UNEMPLOYMENT (Definitions and Measurement) • The unemployment rate: It is the ratio of the number of unemployed persons to the total number of persons in the labor force. It is usually expressed as a percentage. • The labor force consists of all those persons who are willing to work at a market equilibrium wage, and who either have jobs or are seeking work. 4 EMPLOYMENT AND UNEMPLOYMENT (Definitions and Measurement) • Discouraged workers: These are people who are willing to work at the going wage, but have given up looking actively for work, because they do not expect to find a job. • They are not registered for unemployment compensation because they...
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...Todaro Model Traditional migration models were developed largely in the context of advanced industrial economies and hence implicitly assume the existence of full or near-full employment. In a full-employment environment, the decision to migrate can be based solely on the desire to secure the highest-paid job wherever it becomes available. However, developing countries are beset by a chronic unemployment problem, which means that a typical migrant cannot expect to secure a high-paying urban job immediately. Therefore, in deciding to migrate, the individual must balance the probabilities and risks of being unemployed or underemployed for a considerable period of time against the positive urban-rural real income differential. Considering these factors in addition to the traditional model, Todaro model was developed. Thus the fundamental idea of Todaro model is that migrants should consider the various labour market opportunities available to them in the rural and urban sectors and choose the one that maximizes their expected gains from migration. It is a theory that explains rural-urban migration as an economically rational process despite high urban unemployment. Characteristics: 1. Migration is stimulated primarily by rational economic considerations of relative benefits and costs, mostly financial but also psychological. * The theory assumes that members of the labor force, both actual and potential, compare their expected incomes for a given time period in the urban sector...
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...| |adverse circumstances permanent employment and social assistance. |society’s forgotten.” | | | | Dear Dr. Smith: We are submitting herewith our report entitled GUTD Growth Plan as an introduction to our mission and to request your consideration to use us as one of your career placement resources for your patients. The main purpose of this report is to give you a better understanding of who we are as a organization and an attempt to see if you could utilize any of our services. We hope that this report will merit your approval. Respectfully yours, Betty Fulmore Table of Contents 4. Executive Summary 5. Introduction 6. Problem Statement 7. Method 8. Findings 9. Analysis 10. Conclusion 11. References Executive Summary: Give Us This Day Inc. (GUTD) is a 501 © 3 organization located in Durham, NC dedicated to finding individuals facing adverse circumstances permanent employment and social assistance. Job security is one of the key components to an individual and family’s well-being. We believe that we can change one individual, family and community at a time by giving individuals the gift of job security. GUTD partners with local business owners, churches and mentors to provide assistance and encouragement in the search for permanent employment. We recognize...
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...Likewise, unemployed workers represent wasted potential production within an economy. Consequently, unemployment is a significant concern within macroeconomics. The term unemployment refers to the general condition in which resources are willing and able to produce goods and services but are not engaged in any productive activities. Moreover, it arises when GNP declines over a long period of time and when businesses reduce their output. Cutbacks in production inevitably mean that industries will use less labor and materials. Consequently, some workers will lose their jobs and those seeking new jobs will have a difficulty finding employment. Increased unemployment is a major consequence of cyclical declines in real GNP during the periods of recession. Workers in industries usually are laid off especially those who are engaged in the production of producer durable and consumer goods because investment purchased by business and purchases of durable goods by consumer declines during the period of recessions. While unemployment is most commonly thought of in terms of labor, any of the other production factors such as capital, land and entrepreneurship can be unemployed. The analysis of unemployment especially labor unemployment, goes hand-in-hand with the study of macroeconomics. The most noted and widely used measure of unemployment is the unemployment rate of labor. To measure the unemployment rate, it must first determine who is eligible and available to work. The labor force consists...
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