V 



 
 

 
:
P Long-run: The natural rate of unemployment
P Short-run: The cyclical rate of unemployment
V ñ
 
 
 

P The amount of unemployment that the economy
normally experiences and does not go away on its
own even in the long run.
V { 
 

P ’ssociated with short-term ups and downs of the
business cycle and refers to the year-to-year
fluctuations in unemployment around its natural
rate.
V apid Growth of Population
V Poor Quality of Education
V Slow ate of Industrial Development
V Capital Intensive Industries
V Mechanization of ’griculture
V Privatization
V Industrial Sick Units
V Golden Hand Shake
V Shortage of Capital
V Overseas Employment Opportunities
V Political Instability
V Human capital
V Law & Order Situation
V Commercial ’ctivities
V Check on Growth ate of Population
V Promotion of Education
V Professional Training
V Human esource Development Committee
V Employment in ’griculture Sector
V Overseas Employment
V Establishing Industries in Backward ’reas
V ¦ocus on Small Scale Industries
V Introduction of Self Employment Scheme
V Purchase of Locally Manufactured Goods
V Encouraging ’gro based Industries
V ¦ocus on construction Industry
V Skill ¦ormation
V ’ppropriate ¦iscal and Monetary Policies
V Unemployment is measured by the Bureau of Labor
Statistics (BLS).
P It surveys 60,000 randomly selected households
every month.
P The survey is called the Current Population Survey.
V Based on the answers to the survey questions, the BLS
places each adult (over 16) years old into one of three
categories:
P Employed
P Unemployed
P Not in the labor force
V À  ’ person is considered employed if he or
she has spent most of the previous week working at a
paid job.
V
 : ’ person is unemployed if he or she is
on temporary layoff, is looking for a job, or is waiting
for the start date of a new job.
V Not in the Labor ¦orce: ’ person who fits neither of
these categories, such as a full-time student,
homemaker, or retiree, is not in the labor force.
V   
P The „
is the total number of workers and the
BLS defines the it as the sum of the employed and
the unemployed.
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V The Õ  „


is calculated as the
percentage of the labor force that is
unemployed.
P Unemployment ate= (Unemployed/Labor
¦orce)*100
V The „
 

 
is the
percentage of the adult population that is in the
labor force.
P Labor-force Participation ate=
(Labor ¦orce/’dult Population)*100
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V It is difficult to distinguish between a person
who is unemployed and a person who is not in
the labor force.
P îÕ  , people who would like to work
but have given up looking for jobs after an
unsuccessful search, don·t show up in
unemployment statistics.
P Other people may claim to be unemployed in order
to receive financial assistance, even though they
aren·t looking for work.
V 
 
 

P Most spells of unemployment are short.
P Most unemployment observed at any given time is
long-term.
P Most of the economy·s unemployment problem is
attributable to relatively few workers who are jobless
for long periods of time.
V ¦rictional Unemployment
V Seasonal unemployment
V Structural Unemployment
V Cyclic or Demand Deficient
Unemployment
V Disguised Unemployment
V Under Employed
V Occurs Where there is a shortage of one
type of labor in one region and surplus
in other region.
V It takes time to search for a new job .
¦rictional unemployment is temporary.
V The unemployment occur due to the
change in a seasons or season factors, is
called seasonal unemployment. in this
unemployment, people get unemployed
due to seasonal changes
V The unemployment due to structural
changes in the organization, economy or
environment is called structural
unemployment
V It Occurs During Cyclic Changes i.e.
During recoveries and boom
unemployment is low but during
recession and depression unemployment
is high
V Structural unemployment occurs when
the quantity of labor supplied exceeds
the quantity demanded.
V Structural unemployment is often
thought to explain longer spells of
unemployment.
V It occurs when contribution of workers is less
than what he should produce by working in
normal hours per day.
V In other words its marginal revenue product is
either nil if that worker is withdrawn total
output may increase.
V If the labor force receiving reward less
than there abilities, skill, experience
education, training and specialization it
is said to be underemployed which is
another type of employment.
V
 
14% (2009 est.)
12.6% (2008 est.)

 substantial underemployment exists
V ear Unemployment rate ank Percent Change
Date of Information 2003 7.80 % 119 2002 est. 2004
7.70 % 122 -1.28 % 2003 est. 2005 8.30 % 75 7.79 %
2004 est. 2006 6.60 % 65 -20.48 % 2005 est. 2007 6.50
% 72 -1.52 % 2006 est. 2008 5.60 % 71 -13.85 % 2007
est. 2009 7.40 % 92 32.14 % 2008 est. 2010 14.00 %
143 89.19 % 2009 est.
V î

 This entry contains the percent of the
labor force that is without jobs