leading causes of unemployment around the world essay 200 words

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19.4: Causes of Unemployment around the World

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Learning Objectives

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

We can categorize the causes of unemployment in the world's high-income countries in two ways: either cyclical unemployment caused by the economy when in a recession, or the natural rate of unemployment caused by factors in labor markets, such as government regulations regarding hiring and starting businesses.

Unemployment from a Recession

For unemployment caused by a recession, the Keynesian economic model points out that both monetary and fiscal policy tools are available. The monetary policy prescription for dealing with recession is straightforward: run an expansionary monetary policy to increase the quantity of money and loans, drive down interest rates, and increase aggregate demand . In a recession , there is usually relatively little danger of inflation taking off, and so even a central bank, with fighting inflation as its top priority, can usually justify some reduction in interest rates.

With regard to fiscal policy , the automatic stabilizers that we discussed in Government Budgets and Fiscal Policy should be allowed to work, even if this means larger budget deficits in times of recession. There is less agreement over whether, in addition to automatic stabilizers, governments in a recession should try to adopt discretionary fiscal policy of additional tax cuts or spending increases. In the case of the Great Recession, the case for this kind of extra-aggressive expansionary fiscal policy is stronger, but for a smaller recession, given the time lags of implementing fiscal policy, countries should use discretionary fiscal policy with caution.

However, the aftermath of the Recession emphasizes that expansionary fiscal and monetary policies do not turn off a recession like flipping a switch turns off a lamp. Even after a recession is officially over, and positive growth has returned, it can take some months—or even a couple of years—before private-sector firms believe the economic climate is healthy enough that they can expand their workforce.

The Natural Rate of Unemployment

Unemployment rates in European nations have typically been higher than in the United States. In 2020, before the start of the COVID-19 pandemic , the U.S. unemployment rate was 3.5%, compared with 8.5% in France, 10% in Italy, and 7.1% in Sweden. We can attribute the pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

Addressing the natural rate of unemployment is straightforward in theory but difficult in practice. Government can play a useful role in providing unemployment and welfare payments, for example, by passing rules about where and when businesses can operate, and assuring that the workplace is safe. However, these well-intentioned laws can, in some cases, become so intrusive that businesses decide to place limits on their hiring.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 ... according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped and Transitioning Labor Markets

Low-income and middle-income countries face employment issues that go beyond unemployment as it is understood in the high-income economies. A substantial number of workers in these economies provide many of their own needs by farming, fishing, or hunting. They barter and trade with others and may take a succession of short-term or one-day jobs, sometimes receiving pay with food or shelter, sometimes with money. They are not “unemployed” in the sense that we use the term in the United States and Europe, but neither are they employed in a regular wage-paying job.

The starting point of economic activity, as we discussed in Welcome to Economics!, is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Economist Sir W. Arthur Lewis examined such transitions of labor and the impact on economic development. His core theoretical framework—the dual sector economy—proposes that, essentially, the marginal product of low-skilled workers is greater in the manufacturing sector than it is in the agricultural sector. That’s because most agricultural societies are both mature and have fixed inputs (land, water, and related resources); the marginal product of additional farmers on that land is nearly zero, creating what Lewis termed “surplus workers.” Early-stage manufacturing sectors, however, have great need for low-skilled workers, and can make better use (greater marginal product) of them. Their wages will remain low, but as stated above, the wages are more likely to be consistent and therefore move toward a large-scale transition of the labor force.

We have seen this practically in many nations experiencing a shift in labor, particularly in China. In many regions, it is marked by a level of migration—people leaving rural areas for cities or manufacturing zones. At some point, nations achieve what economists call the Lewis turning point, in which the surplus agricultural labor is fully absorbed into the manufacturing sector. Typically, when this occurs, wages in both agricultural and manufacturing sectors begin to rise in a sustainable manner. Despite massive transformation in the Chinese economy over the past decades, economists dispute whether China has actually reached the Lewis turning point.

Economic transition is not without its downsides. Many manufacturing-focused countries still rely heavily on their agricultural sectors for their own sustenance and as a core part of international trade. As the agricultural sector faces competition from manufacturing, and as people physically leave rural areas, farming economies can suffer downturns and unpredictability. Finally, countries or individual farmers seeking to make up for their missing labor may encourage migration and/or immigration that may cause political or financial conflict.

leading causes of unemployment around the world essay 200 words

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Essay on Unemployment: 100 to 300 Words

Updated on
Mar 30, 2024

Writing an essay on unemployment provides an opportunity to explore a critical issue affecting societies worldwide. Unemployment, a multifaceted problem, has far-reaching consequences that touch upon various aspects of individuals, families, and nations. In this essay, we will delve into the complexities of unemployment, examine its causes and consequences, discuss government initiatives, and shed light on potential solutions.

Table of Contents

1 What is Unemployment?
2 Essay on Unemployment in 100 words
3 Essay on Unemployment in 200 words
4 Essay on Unemployment in 300 words
5 Tips to Ace in Writing An Essay

Must Read: The Beginner’s Guide to Writing an Essay

What is Unemployment?

Lack of jobs leads to unemployment. It is a very serious economic and social concern that is happening all around the globe leading to many social ills. This issue is a major one and hence many governments are trying to address it. When people of a nation are employed, that leads to the economic and social well-being of that nation. To address it, the education system needs to be modeled differently so as to increase the employability of people. In democracies, political parties use unemployment as a core issue in their election manifestos.

Essay on Unemployment in 100 words

Unemployment refers to the condition when individuals, capable and willing to work, are unable to secure gainful employment. It is a pervasive issue across the globe, with varying degrees of impact on societies. Unemployment results in financial instability, and emotional distress, and hampers individual growth. Governments and organizations must collaborate to create opportunities for employment through skill development and policy implementation.

Essay on Unemployment in 200 words

Unemployment, a pressing concern globally, stems from multiple factors that hinder the workforce’s engagement in productive activities. It affects both developed and developing nations, contributing to economic imbalances and social disparities. The consequences of unemployment include reduced income levels, increased poverty rates, and strained government resources. Moreover, the psychological toll it takes on individuals and families can be severe, leading to stress, depression, and strained relationships.

Essay on Unemployment in 300 words

The intricate web of unemployment is spun from a mix of causes, ranging from economic fluctuations to structural shifts in industries. Cyclical unemployment, driven by economic downturns, and structural unemployment, resulting from a mismatch between skills and job openings, are widespread forms. Additionally, technological advancements lead to technological unemployment as machines replace human labour.

Unemployment has cascading effects on societies. Diminished purchasing power affects market demand, thereby impacting economic growth. As unemployment rates rise, so does the burden on social welfare programs and the healthcare system. The phenomenon also fuels social unrest and political instability, making it a challenge governments cannot ignore.

Governments worldwide have initiated strategies to tackle unemployment. Skill development programs, vocational training, and entrepreneurship initiatives are designed to equip individuals with market-relevant skills. Furthermore, promoting labour-intensive industries and investing in sectors with growth potential can generate employment opportunities.

In conclusion, unemployment is a complex issue that necessitates a multi-pronged approach. Governments, industries, and individuals must collaborate to alleviate its impact. Effective policy implementation, education reforms, and the cultivation of entrepreneurial spirit can pave the way towards reducing unemployment rates and fostering a more stable and prosperous society.

Tips to Ace in Writing An Essay

Before we dive into the specifics of unemployment, let’s briefly discuss some tips to enhance your essay-writing skills:

Understand the Prompt: Ensure a clear understanding of the essay prompt to address all its components effectively.
Research Thoroughly: Gather relevant information from credible sources to build a comprehensive and informed essay.
Organize Your Thoughts: Create an outline to structure your essay logically, allowing your ideas to flow coherently.
Introduction and Conclusion: Craft a compelling introduction to engage your readers, and a succinct conclusion to summarize your key points.
Use Clear Language: Express your ideas using clear and concise language, avoiding jargon or overly complex vocabulary.
Provide Examples: Illustrate your points with real-life examples to enhance understanding and credibility.
Edit and Proofread: Revise your essay for grammar, punctuation, and coherence to ensure a polished final draft.

Also Read: Unemployment v/s Underemployment – What’s Worse?

Manasvi Kotwal

Manasvi's flair in writing abilities is derived from her past experience of working with bootstrap start-ups, Advertisement and PR agencies as well as freelancing. She's currently working as a Content Marketing Associate at Leverage Edu to be a part of its thriving ecosystem.

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Unemployment: Causes and Effects Essay

Unemployment is a significant social and economic problem. Not always positive aspects of enterprise development contribute to a decrease in the percentage of unemployed. The negative impact may be cumulative along with phenomena such as inflation external factors, including the pandemic. Difficulties in obtaining an education for low-income families only widen the gap between the rich and the poor, which in America is already the largest in the world (Telford, 2019). Consequently, the leading causes of unemployment are inflation, advanced technology, and lack of education or skills for employment.

Inflation drives up prices in the economy. Naturally, the price of both products and the materials they have produced increases. Employers seek to recoup the costs of inflation by constantly increasing the financial performance of sales. One of these methods is to increase the gross profit ratio by reducing the cost of production. As a result, the company seeks to optimize costs by reducing wages and saving on various employee benefits. This unfair practice leads to layoffs.

One of the vectors of technology development, which is now the most crucial unemployment, is automation. The replacement of human labor brings the company to eliminate the human error factor, the ability to operate robots around the clock, reducing jobs. From an economic point of view, many of yesterday’s professionals consider their position obsolete and remain without skilled work. A possible way out of this situation is to retrain as a consultant to maintain such machines.

The lack of skills can be caused by several reasons, from income inequality that limits access to education to the narrow specialization of a company that requires training. On-the-job training requires, in turn, the cost of human and time resources, which can affect the company’s operations. As a result, many companies do not train employees but want to get a qualified specialist with a high salary immediately. Applicants lacking these skills are forced to remain unqualified, contributing to rising unemployment and shortages.

Telford, T. (2019). Income inequality in America is the highest it’s been since Census Bureau started tracking it, data shows. Washington Post , 26. Web.

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IvyPanda. (2023, January 9). Unemployment: Causes and Effects. https://ivypanda.com/essays/unemployment-causes-and-effects/

"Unemployment: Causes and Effects." IvyPanda , 9 Jan. 2023, ivypanda.com/essays/unemployment-causes-and-effects/.

IvyPanda . (2023) 'Unemployment: Causes and Effects'. 9 January.

IvyPanda . 2023. "Unemployment: Causes and Effects." January 9, 2023. https://ivypanda.com/essays/unemployment-causes-and-effects/.

1. IvyPanda . "Unemployment: Causes and Effects." January 9, 2023. https://ivypanda.com/essays/unemployment-causes-and-effects/.

Bibliography

IvyPanda . "Unemployment: Causes and Effects." January 9, 2023. https://ivypanda.com/essays/unemployment-causes-and-effects/.

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Causes of Unemployment around the World

Steven A. Greenlaw and David Shapiro

Learning Objectives

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

We can categorize the causes of unemployment in the world’s high-income countries in two ways: either cyclical unemployment caused by the economy when in a recession, or the natural rate of unemployment caused by factors in labor markets, such as government regulations regarding hiring and starting businesses.

Unemployment from a Recession

The Natural Rate of Unemployment

Unemployment rates in European nations have typically been higher than in the United States. In 2006, before the start of the Great Recession , the U.S. unemployment rate was 4.6%, compared with 9% in France, 10.4% in Germany, and 7.1% in Sweden. We can attribute the pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Key Concepts and Summary

We can address cyclical unemployment by expansionary fiscal and monetary policy. The natural rate of unemployment can be harder to solve, because it involves thinking carefully about the tradeoffs involved in laws that affect employment and hiring. Unemployment is understood differently in high-income countries compared to low- and middle-income countries. People in these countries are not “unemployed” in the sense that we use the term in the United States and Europe, but neither are they employed in a regular wage-paying job. While some may have regular wage-paying jobs, others are part of a barter economy.

Self-Check Questions

What are the different policy tools for dealing with cyclical unemployment?

If there is a recession and unemployment increases, we can call on an expansionary fiscal policy (lower taxes or increased government spending) or an expansionary monetary policy (increase the money supply and lower interest rates). Both policies stimulate output and decrease unemployment.

Explain how the natural rate of unemployment may be higher in low-income countries.

Aside from a high natural rate of unemployment due to government regulations, subsistence households may be counted as not working.

Review Questions

What are the two types of unemployment problems?

In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Critical Thinking Question

Is it possible to protect workers from losing their jobs without distorting the labor market?

Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model, for what is more likely to happen.

Retrieve the unemployment data from The World Bank database (http://databank.worldbank.org/data/home.aspx) for India, Spain, and South Africa for 2011-2015. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income countries. Explain what is surprising or expected about this data. How did the Great Recession impact these countries?

Viscusi, Gregory, and Mark Deen. “Why France Has So Many 49-Employee Companies.” Business Week . Last modified May 3, 2012. http://www.businessweek.com/articles/2012-05-03/why-france-has-so-many-49-employee-companies.

Causes of Unemployment around the World Copyright © 2020 by Steven A. Greenlaw and David Shapiro is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Chapter 32. Macroeconomic Policy Around the World

32.3 Causes of Unemployment around the World

Learning objectives.

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

The causes of unemployment in high-income countries of the world can be categorized in two ways: either cyclical unemployment caused by the economy being in a recession, or the natural rate of unemployment caused by factors in labor markets, such as government regulations regarding hiring and starting businesses.

Unemployment from a Recession

With regard to fiscal policy , the automatic stabilizers discussed in Government Budgets and Fiscal Policy should be allowed to work, even if this means larger budget deficits in times of recession. There is less agreement over whether, in addition to automatic stabilizers, governments in a recession should try to adopt discretionary fiscal policy of additional tax cuts or spending increases. In the case of the Great Recession, the case for this kind of extra-aggressive expansionary fiscal policy is stronger, but for a smaller recession, given the time lags of implementing fiscal policy, discretionary fiscal policy should be used with caution.

The Natural Rate of Unemployment

Unemployment rates in the nations of Europe have typically been higher than in the United States. In 2006, before the start of the Great Recession , the U.S. unemployment rate was 4.6%, compared with 9% in France, 10.4% in Germany, and 7.1% in Sweden. The pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, is typically attributed to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

Addressing the natural rate of unemployment is straightforward in theory but difficult in practice. Government can play a useful role in providing unemployment and welfare payments, passing rules about where and when businesses can operate, assuring that the workplace is safe, and so on. But these well-intentioned laws can, in some cases, become so intrusive that businesses decide to place limits on their hiring.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

Low-income and middle-income countries face employment issues that go beyond unemployment as it is understood in the high-income economies. A substantial number of workers in these economies provide many of their own needs by farming, fishing, or hunting. They barter and trade with others and may take a succession of short-term or one-day jobs, sometimes being paid with food or shelter, sometimes with money. They are not “unemployed” in the sense that the term is used in the United States and Europe, but neither are they employed in a regular wage-paying job.

The starting point of economic activity, as discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Indeed, recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Key Concepts and Summary

Cyclical unemployment can be addressed by expansionary fiscal and monetary policy. The natural rate of unemployment can be harder to deal with, because it involves thinking carefully about the tradeoffs involved in laws that affect employment and hiring. Unemployment is understood differently in high-income countries compared to low- and middle-income countries. People in these countries are not “unemployed” in the sense that term is used in the United States and Europe, but neither are they employed in a regular wage-paying job. While some may have regular wage-paying jobs, others are part of a barter economy.

Self-Check Questions

What are the different policy tools for dealing with cyclical unemployment?
Explain how the natural rate of unemployment may be higher in low-income countries.

Review Questions

What are the two types of unemployment problems?
In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Critical Thinking Question

Is it possible to protect workers from being fired without distorting the labor market?
Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model, for what is more likely to happen.

Retrieve the unemployment data from The World Bank database ( http://databank.worldbank.org/data/home.aspx ) for India, Spain, and South Africa for 2008–2012. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income countries. Explain what is surprising or expected about this data. How were these countries impacted by the Great Recession?

Answers to Self-Check Questions

If there is a recession and unemployment increases, we can call on an expansionary fiscal policy (lower taxes or increased government spending) or an expansionary monetary policy (increase the money supply and lower interest rates). Both policies stimulate output and decrease unemployment.
Aside from a high natural rate of unemployment due to government regulations, subsistence households may be counted as not working.

32.3 Causes of Unemployment around the World

Learning objectives.

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment from a Recession

The Natural Rate of Unemployment

Undeveloped and Transitioning Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

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EssayBanyan.com – Collections of Essay for Students of all Class in English

Essay on Unemployment

We always used to refer youths as the future of the nation, but what about their future? Every human wants to live a luxurious and peaceful life. All his dreams can only come true when they will be able to earn a healthy livelihood. Every student wishes to get a high-paying job after their studies. But what if they don’t get jobs? Today, the youth are facing the problem of unemployment. This not only affects youths and their family but the entire nation as a whole.

Short and Long Unemployment Essay in English

To highlight the growing issue of unemployment and its consequences, today we will discuss Unemployment in detail. Here, we are presenting short and long essays on Unemployment in English for students under word limits of 100 – 150 Words, 200 – 250 words, and 500 – 600 words. This topic is useful for students of classes 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 in English. These provided essays on Unemployment will help you to write effective essays, paragraphs, and speeches on this topic.

Unemployment Essay 10 Lines (100 – 150 Words)

1) Unemployment is when qualified people are looking for work but unable to find it.

2) Unemployment is primarily due to the scarcity of job opportunities.

3) Unemployment is one of the biggest things that keep a country from growing.

4) When there is unemployment in society, people lose their skills.

5) Unemployment is caused by several things that work in different ways.

6) Changes in technology cause people to lose their jobs, which leads to unemployment.

7) The country’s industrial sector is growing slowly which can result in unemployment.

8) Unemployment is a big problem in places that haven’t developed much yet.

9) A country with a high unemployment rate faces social and economic problems.

10) We need to plan if we want to get rid of unemployment in the country.

Short Essay on Unemployment (200 – 250 Words)

Introduction

The problem of unemployment is growing drastically. However, it is a bad thing for everyone. Unemployment happens when someone who is actively looking for work can’t find a job. However, the unemployed are those people who want to work but can’t find work. In almost every country, unemployment has become a big problem.

Unemployment: The Serious Issue

Unemployment is a problem in a lot of places around the world. When people lose their jobs, they lose self-confidence, get angry, and have bad feelings about everyday things. When unemployment is high, people buy fewer goods and services and pay less in taxes. This means that the government has to manage the nation’s expenses. When there are more people out of work, there are more crimes. Unemployment not only affects the people who are out of work, but also the growth of the country as a whole.

Reasons of Unemployment

Several things can be blamed for unemployment. First of all, the status of the education sector is getting down. Students have more theoretical knowledge but lack practical knowledge. An unhealthy work environment is another reason that can lead to unemployment in the end. As technology gets better, more tasks are done by machines instead of people, making it unnecessary to hire people.

Unemployment is a big problem that must be fixed in any way possible. This is a problem that needs to be fixed by the government. Policymakers and people should work together to make more jobs and learn the right skills to get hired. To find effective and integrated solutions to this problem, it is important to study the different things that are causing it.

Long Essay on Unemployment (500 Words)

Our country has a lot of good schools, colleges, and universities. Thousands of students graduate from there every year. Then also, the number of people without jobs is going up every day. Unemployment arises when people who want to work but don’t find proper jobs. It doesn’t count people who are voluntarily unemployed or who can’t look for work because of illness.

Types of Unemployment

There are different kinds of unemployment, including:

Hidden unemployment: When people are working less than their potential or their skills are unutilized but counted as employed falls in this category.
Cyclical unemployment: When the overall amount of business activity goes down, this causes cyclical unemployment.
Seasonal unemployment: It happens in jobs like construction, farming, and the tourist trade, where the weather or the calendar determines the demand for work.
Long-term unemployment: It occurs when someone has been out of work for a year or more.
Underemployment: It occurs when a person is overqualified for work or works part-time.
Hardcore unemployment: Hardcore unemployment is a term for people who have been out of work for a long time.
Structured unemployment : It happens when there are too many unemployed people for the number of open jobs.
Frictional unemployment: It happens when there aren’t enough people to fill jobs in the same jobs and the same places.

Causes of Unemployment

The first reason for unemployment is the growing population. This is also because of how our education system works. Our schools and colleges focus more on theoretical knowledge than practical training for jobs. Changes in technology are one of the most important reasons why people lose their jobs. Many employees are unhappy with their jobs. When companies treat people differently based on their caste, religion, race, etc, they make it harder for people to work there.

Effects of Unemployment

Having no job means not having a way to make money. Unemployment is a big problem that slows down both individual and national progress. When people can’t get enough work to meet their needs, crime rates go up. The number of people who are homeless and who are mentally or physically sick is going up. If you don’t have a job for a long time, you get bored and eventually lose your skills.

Unemployment in India

India is a developing country with an economy that isn’t as strong as it could be. Unemployment in India is different from unemployment in developed economies. India’s unemployment problem is not caused by a lack of effective demand. Instead, it is caused by a lack of capital equipment and other resources, along with a high rate of population growth. India has a bigger problem with underemployment than it does with unemployment.

Unemployment is a big problem for all economies. For a developing economy, both the government and individuals need to take steps to increase productivity and raise the standard of living.

I hope the above provided essay on Unemployment will be helpful in understanding the effects and causes of unemployment in a country.

FAQs: Frequently Asked Questions on Unemployment

Ans. The unemployment rate can be defined as the percentage of persons who are actively seeking employment but are unable to find it.

Ans. From April to June 2022, the unemployment rate in urban centers of India was 7.6%.

Ans. Rajasthan is the highest unemployed state in India.

Ans. Maharashtra has the highest employment in India as per 2022 records.

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Home — Essay Samples — Economics — Unemployment — Unemployment: Causes, Effects, and Solutions

Unemployment: Causes, Effects, and Solutions

Categories: Unemployment

About this sample

Words: 685 |

Published: Jan 30, 2024

Words: 685 | Pages: 2 | 4 min read

Introduction, causes of unemployment, effects of unemployment, solutions to combat unemployment, a. economic factors.

Global recession: During economic downturns, companies may reduce employment to cut costs and remain competitive.
Automation and technological advancements: The use of machines and technology may replace human workers in some industries, leading to job losses.
Outsourcing of jobs: Companies may choose to outsource jobs to other countries where labor costs are lower, leaving domestic workers unemployed.

B. Societal Factors

Lack of education and skills: Individuals without proper education and job training may be ill-equipped to meet the demands of a constantly evolving job market.
Discrimination in hiring processes: Certain groups, such as women, minorities, and older workers, may face barriers in securing employment due to discrimination.
Dependency on welfare programs: Some individuals may choose to remain on welfare programs due to a lack of incentive to enter the workforce or because they cannot find suitable employment.

A. Economic Effects

Reduction in consumer spending: Without a steady income, unemployed individuals may have less money to spend, resulting in a decline in consumer spending.
Decline in government revenue: With fewer people working, the government may see a decline in tax revenue, which can impact its ability to provide necessary services and promote economic growth.
Increase in social welfare expenses: The government may need to allocate more funds toward social welfare programs, such as unemployment benefits and food assistance, to support those who are unemployed.

B. Social Effects

Increase in crime rates: Individuals who are unemployed may resort to criminal activities to make ends meet, leading to a rise in crime rates.
Mental health issues: Unemployment can cause stress, anxiety, and depression, which can negatively impact an individual's mental health.
Strained relationships and family instability: Unemployment may cause financial strain and tension within families, leading to relationship problems and instability.

A. Economic Solutions

Encouraging entrepreneurship and small business development: Providing resources and support for individuals to start their own businesses can lead to job creation and economic growth.
Promoting vocational training and skill development programs: Ensuring that individuals have access to education and training programs can increase their job readiness and competitiveness in the job market.
Implementing balanced trade policies: Creating policies that promote fair trade and reduce job outsourcing can protect domestic jobs and promote job growth.

B. Social Solutions

Addressing educational disparities and providing access to quality education: Providing quality education to disadvantaged communities can improve their job readiness and reduce unemployment rates.
Combating discrimination in the workplace: Enforcing anti-discrimination laws and promoting diversity and inclusion in the workplace can reduce barriers to employment for certain groups.
Strengthening social safety net programs: Ensuring that social welfare programs are designed to incentivize work and provide support to those in need can promote economic stability and reduce poverty.
Bureau of Labor Statistics. (2021, October 8). Employment Situation Summary. https://www.bls.gov/news.release/empsit.nr0.htm

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Macroeconomic Policy Around the World

Causes of unemployment around the world, learning objectives.

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment from a Recession

The Natural Rate of Unemployment

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Key Concepts and Summary

Self-Check Questions

What are the different policy tools for dealing with cyclical unemployment?

Explain how the natural rate of unemployment may be higher in low-income countries.

Aside from a high natural rate of unemployment due to government regulations, subsistence households may be counted as not working.

Review Questions

What are the two types of unemployment problems?

In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Critical Thinking Question

Is it possible to protect workers from losing their jobs without distorting the labor market?

Principles of Macroeconomics 2e. Provided by : OpenStax. Located at : http://cnx.org/contents/[email protected] . License : CC BY: Attribution . License Terms : Download for free at http://cnx.org/contents/[email protected]

18.3 Causes of Unemployment Around the World

Learning objectives.

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment From a Recession

With regard to fiscal policy , the automatic stabilizers discussed in Government Budget and Fiscal Policy should be allowed to work, even if this means larger budget deficits in times of recession. There is less agreement over whether, in addition to automatic stabilizers, governments in a recession should try to adopt discretionary fiscal policy of additional tax cuts or spending increases. In the case of the Great Recession, the case for this kind of extra-aggressive expansionary fiscal policy is stronger, but, for a smaller recession, given the time lags of implementing fiscal policy, discretionary fiscal policy should be used with caution.

However, the aftermath of the Recession emphasizes that expansionary fiscal and monetary policies do not turn off a recession like flipping a switch turns off a lamp. Even after a recession is officially over and positive growth has returned, it can take some months—or even a couple of years—before private-sector firms believe the economic climate is healthy enough that they can expand their workforce.

The Natural Rate of Unemployment

Unemployment rates in the nations of Europe have typically been higher than in the United States. In 2006, before the start of the Great Recession , the U.S. unemployment rate was 4.6 percent, compared with 9 percent in France, 10.4 percent in Germany, and 7.1 percent in Sweden. The pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, is typically attributed to the fact that European economies have a higher natural rate of unemployment because they have a greater number of rules and restrictions that discourage firms from hiring and unemployed workers from taking jobs.

Addressing the natural rate of unemployment is straightforward in theory but difficult in practice. Government can play a useful role in providing unemployment and welfare payments, passing rules about where and when businesses can operate, assuring that the workplace is safe, and so on. But these well-intentioned laws can, in some cases, become so intrusive that businesses decide to place limits on their hiring.

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week (Viscusi, 2012), France “has 2.4 times as many companies with 49 employees as with 50. . . . according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment—or raises the natural rate of unemployment.

Undeveloped Labor Markets

Low-income and middle-income countries face employment issues that go beyond unemployment as it is understood in the high-income economies. A substantial number of workers in these economies provide many of their own needs by farming, fishing, or hunting. They barter and trade with others and may take a succession of short-term or one-day jobs, sometimes being paid with food or shelter, sometimes with money. They are not unemployed in the sense that the term is used in the United States and Europe, but neither are they employed in a regular wage-paying job.

The starting point of economic activity, as discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not officially employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Indeed, recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

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Unemployment Essay for Students and Children

500+ words essay on unemployment.

Unemployment is a very serious issue not only in India but in the whole world. There are hundreds and thousands of people out there who do not have employment . Besides, the problems of unemployment are very severe in India because of the growing population and demand for jobs. Moreover, if we neglect this problem then it will be going to become the reason for the doom of the nation.

What is Unemployment?

Unemployment refers to a situation in which a skilled and talented people wanted to do a job. But cannot find a proper job due to several reasons.

Types of Unemployment

Now we know what is unemployment but unemployment does not only mean that the person does not have a job. Likewise, unemployment also includes people working in areas out of their expertise.

The various types of unemployment include disguised unemployment, seasonal unemployment, open unemployment, technological unemployment, structural unemployment. Besides, some other unemployment is cyclic unemployment, educated unemployment, underemployment, frictional unemployment, chronic unemployment, and casual unemployment.

Above all, seasonal unemployment, under unemployment, and disguised unemployment are the most common unemployment that is found in India.

Reasons for Unemployment

In a country like India, there is much reason for a large section of the population for being unemployed. Some of these factors are population growth, slow economic growth , seasonal occupation, slow growth of the economic sector, and fall in the cottage industry.

Moreover, these are the major reason for unemployment in India. Also, the situation has become so drastic that highly educated people are ready to do the job of a sweeper. Besides, the government is not doing his work seriously.

Apart from all these, a large portion of the population is engaged in the agricultural sector and the sector only provides employment in harvest or plantation time.

In addition, the biggest reason of unemployment in India is its vast population which demands a large number of jobs every year which the government and authorities are unable to provide.

Consequences of Unemployment

If things will go on like the current scenario then unemployment will become a major issue. Apart from this, the following things happen in an economy which is an increase in poverty, an increase in crime rate, exploitation of labor, political instability, mental health, and loss of skills. As a result, all this will eventually lead to the demise of the nation.

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Initiative by Government

The government has taken the problem very seriously and have taken measures to slowly reduce unemployment. Some of these schemes includes IRDP (Integrated Rural Development Programme), DPAP (Drought Prone Area Programme), Jawahar Rozgar Yojana, Employment Assurance Scheme, NRY (Nehru Rozgar Yojana), Training for self-Employment, PMIUPEP (Prime Minister’s Integrated Urban Poverty Eradication Program), employment exchange, Employment Guarantee Scheme, development of organized sector, small and cottage industries, employment in forging countries, and Jawahar Gram Samridhi Yojana and few more.

Besides, these schemes the government also make some rules flexible, so that employment can be created in the private sector also.

To conclude, we can say that the problem of unemployment in India has reached a critical stage. But, now the government and local authorities have taken the problem seriously and working on it to reduce unemployment. Also, to completely solve the issue of unemployment we have to tackle the main issue of unemployment that is the vast population of India.

FAQs about Unemployment

Q.1 Why there is a problem of unemployment in India? A.1 Due to overpopulation and lack of proper skills there is a problem of unemployment in India.

Q.2 Define Disguised unemployment? A.2 Disguised unemployment refers to a form of employment in which more than the required numbers of people work in industry or factory. And removing some employee will not affect productivity.

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Part 32: Macroeconomic Policy Around the World

32.3 Causes of Unemployment around the World

Learning objectives.

By the end of this section, you will be able to:

Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment

Unemployment from a Recession

The Natural Rate of Unemployment

For example, a law that imposes large costs on a business that tries to fire or lay off workers will mean that businesses try to avoid hiring in the first place, as is the case in France. According to Business Week , “France has 2.4 times as many companies with 49 employees as with 50 … according to the French labor code, once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.” This labor law essentially limits employment (or raises the natural rate of unemployment).

Undeveloped Labor Markets

The starting point of economic activity, as we discussed in Welcome to Economics! , is the division of labor, in which workers specialize in certain tasks and trade the fruits of their labor with others. Workers who are not connected to a labor market are often unable to specialize very much. Because these workers are not “officially” employed, they are often not eligible for social benefits like unemployment insurance or old-age payments—if such payments are even available in their country. Helping these workers to become more connected to the labor market and the economy is an important policy goal. Recent research by development economists suggests that one of the key factors in raising people in low-income countries out of the worst kind of poverty is whether they can make a connection to a somewhat regular wage-paying job.

Key Concepts and Summary

Self-Check Questions

What are the different policy tools for dealing with cyclical unemployment?

Explain how the natural rate of unemployment may be higher in low-income countries.

Aside from a high natural rate of unemployment due to government regulations, subsistence households may be counted as not working.

Review Questions

What are the two types of unemployment problems?

In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Critical Thinking Question

Is it possible to protect workers from losing their jobs without distorting the labor market?

Principles of Econ 2e by OpenStax @ Rice University is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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32.3 Causes of Unemployment around the World
The Natural Rate of Unemployment. Unemployment rates in the nations of Europe have typically been higher than in the United States. In 2006, before the start of the Great Recession, the U.S. unemployment rate was 4.6%, compared with 9% in France, 10.4% in Germany, and 7.1% in Sweden. The pattern of generally higher unemployment rates in Europe ...
Understanding Unemployment: Causes, Consequences, and Solutions
Causes of Unemployment. Economic Fluctuations. Economic fluctuations are a significant contributor to unemployment, which acts as a barometer for the health of a job market. During periods of economic downturn or recession, businesses face declining profits, reduced consumer spending, and often diminishing markets.
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Short Essay on Unemployment (200 - 250 Words) Introduction. ... Unemployment is a problem in a lot of places around the world. When people lose their jobs, they lose self-confidence, get angry, and have bad feelings about everyday things. ... Causes of Unemployment. The first reason for unemployment is the growing population. This is also ...
Unemployment: Causes, Effects, and Solutions
Mental health issues: Unemployment can cause stress, anxiety, and depression, which can negatively impact an individual's mental health. Strained relationships and family instability: Unemployment may cause financial strain and tension within families, leading to relationship problems and instability. These effects of unemployment can have ...
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Causes of Unemployment around the World
Identify how undeveloped labor markets can result in the same hardships as unemployment. We can categorize the causes of unemployment in the world's high-income countries in two ways: either cyclical unemployment caused by the economy when in a recession, or the natural rate of unemployment caused by factors in labor markets, such as ...
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Essay Writing Service. High unemployment rate in a country leads to social and economic problems in the community as a whole. Economic problems result in less production of goods and services, less distribution of income, loss of tax revenues, fall in GDP rate etc. (www.economywatch.com). Social problems cause's social ills and shows effect ...
The Causes and Effects of Unemployment
The top causes are increased population, rapid technological change, lack of education or skills and rising cost. The various effects of unemployment include financial, social and psychological problems. Unemployment has become a major problem which affects our life, health, economy and community.
Paragraph on Unemployment 100, 150, 200, 250 to 300 Words for Kids
Paragraph on Unemployment - 100 Words for Classes 1, 2, 3 Kids. Unemployment is the inability to get employed in an established organization despite the unsuccessful efforts. It is a persistent condition that can cause prolonged starvation in a financially-weak family.
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Unemployment Essay 1 in 200 words. Unemployment, a prevailing concern both nationally and globally, poses significant socio-economic implications. In countries like India, this issue is particularly acute. The lack of sufficient job opportunities has far-reaching effects, exacerbating poverty, crime, and social disparities.
18.3 Causes of Unemployment Around the World
Learning Objectives. The causes of unemployment in high-income countries of the world can be categorized in two ways: either cyclical unemployment caused by the economy being in a recession, or the natural rate of unemployment caused by factors in labor markets, such as government regulations regarding hiring and starting businesses.
Unemployment Essay for Students and Children
500+ Words Essay on Unemployment. Unemployment is a very serious issue not only in India but in the whole world. There are hundreds and thousands of people out there who do not have employment. Besides, the problems of unemployment are very severe in India because of the growing population and demand for jobs.
32.3 Causes of Unemployment around the World
The Natural Rate of Unemployment. Unemployment rates in European nations have typically been higher than in the United States. In 2006, before the start of the Great Recession, the U.S. unemployment rate was 4.6%, compared with 9% in France, 10.4% in Germany, and 7.1% in Sweden.We can attribute the pattern of generally higher unemployment rates in Europe, which dates back to the 1970s, to the ...

19.4: Causes of Unemployment around the World

Learning Objectives

Unemployment from a Recession

The Natural Rate of Unemployment

Undeveloped and Transitioning Labor Markets

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Unemployment: Causes and Effects Essay

Causes of Unemployment around the World

Learning Objectives

Unemployment from a Recession

The Natural Rate of Unemployment

Undeveloped Labor Markets

Key Concepts and Summary

Self-Check Questions

Review Questions

Critical Thinking Question

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32.3 Causes of Unemployment around the World

Unemployment from a Recession

The Natural Rate of Unemployment

Undeveloped Labor Markets

Key Concepts and Summary

Self-Check Questions

Review Questions

Critical Thinking Question

32.3 Causes of Unemployment around the World

Unemployment from a Recession

The Natural Rate of Unemployment

Undeveloped and Transitioning Labor Markets

Essay on Unemployment

Short and Long Unemployment Essay in English

Unemployment Essay 10 Lines (100 – 150 Words)

Short Essay on Unemployment (200 – 250 Words)

Long Essay on Unemployment (500 Words)

FAQs: Frequently Asked Questions on Unemployment

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Unemployment: Causes, Effects, and Solutions

Table of contents

B. Societal Factors

A. Economic Effects

B. Social Effects

A. Economic Solutions

B. Social Solutions

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Macroeconomic Policy Around the World

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Undeveloped Labor Markets

Key Concepts and Summary