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DEFINITION
Its need to define labour force in order to understand the concepts of unemployment such as
full employment, unemployment, unemployed,underemployement and discouraged worker.
1. Labour force
Defined as people from the total population above 16 years of age, who are nit in
institution, and who are either employed or unemployment but actively seeking
employment.
2. Full employment
3. Unemployment
Labour force participants being available and willing to work but unable to find jobs.
4. Unemployed
People who are registered as able,available,and willing to work at the going wage rate
but who cannot find work.
5. Underemployment
Describe those who take on part-time jobs below their capability hut are seeking full-
time employment. Eg: a fresh graduate working as a salesperson in a supermarket.
6. Discouraged worker
Individual who wants to work but has been unsuccessful for a long period of time in
finding a job and who has consequently given up on seeking for jobs.
1. Frictional Unemployment
Temporary, normal (few month)
Factor: Imperfect information in labour market
: Fresh graduates , between jobs
2. Cyclical Unemployment
Long term
Involuntary to serious problems, during recession
Factor:⬇AD , ⬇output , firm shut down , unemployment ⬆
3. Structural Unemployment
Changes in Technology, demand, ⬆import
4. Seasonal Unemployment
Temporary unemployment
Factor: wealth, festive, season and fashion.
CAUSES OF UNEMPLOYMENT
Business Cycle
Technology advancement
Immobility of labour
Political instability
EFFECT OF UNEMPLOYMENT
Economy
Individual
Society
Family Dispute
Social problems
Low standard of living
Government
Monetary Policy
Commercial Bank
Individuals
Quantitative
Deflation / unemployment
Expansionary ( Supply of money increase)
Minimum statutory reserves
Minimum requirement of liquidated assets
Buy government securities
Decrease discount rate (loan)
Reduce interest rate (savings)
Qualitative
Frictional Unemployment