4. TOPIC TO BE COVERED
Definition U
Measurement N
Unemployment Rate E
Types Of Unemployment M
Voluntary Unemployment P
Involuntary Unemployment L
• Fractional Unemployment O
Y
• Structural Unemployment
M
• Cyclical Unemployment
E
• Seasonal Unemployment N
• Regional Unemployment T
• Classical Unemployment
5. Unemployment
Unemployment (or joblessness) occurs
when people are without work and
actively seeking work
A SITUATION WHERE SOME PEOPLE ARE WILLING AND
ABLE TO WORK ,BUT ARE UNABLE TO FIND PAID
EMPLOYMENT
Unemployment
6. DEFINITION ACCORDING TO
ILO
• ILO (International Labor Organization)
• Unemployment as defined by the ILO occurs when people are
without job and they have actively looked for work with in the
past four weeks
• SOME REALITY BASE FACTS
• This incidence is much higher in urban then rural area
• Unemployment rates for women are higher then those for
men.
7. EFFECTS OF UNEMPLOYMENT
• Effect of unemployment (at individual level)
• Mantel stress
• Loss of self esteem
• Directly linked to poverty and Malnutrition
• Effect of unemployment (at social level)
• Civil unrest
• Law an order problems
• Trade barriers
8. UNEMPLOYMENT RATE
Unemployment Formula
( unemployment labor force /total labor force )*100
Unemployment Rate In Pakistan
Unemployment Rate in Pakistan decreased to 5.70 percent in the second
quarter of 2011 from 6.10 percent in the first quarter of 2011
10. VOLUNTARY UNEMPLOYMENT
• Voluntary unemployment is defined as a
situation when workers choose not to work at the
current equilibrium wage rate. For one reason or
another, workers may elect not to participate in
the labor market.
• Voluntary unemployment is likely to occur when
the equilibrium wage rate is below the wage
necessary to encourage individuals to supply
their labor.
11. Classical Unemployment
Classical unemployment is caused when wages are ‘too’ high.
when workers themselves were blamed for not accepting lower
wages, or for asking for too high wages. Classical unemployment
is also called real wage unemployment.
INVOLUNTARY
UNEMPLOYMENT
• When workers are prepared to work at the going wage
rate but cannot find jobs.
12. FRICTIONAL
UNEMPLOYMENT
Frictional (Search) Unemployment
• Frictional unemployment, also called search unemployment,
occurs when workers lose their current job and are in the
process of finding another one. This suggests that full
employment is impossible at any one time because some
workers will always be in the process of changing jobs.
• For example, college graduates that have never been in the labor force
before are considered frictionally unemployed until they manage to find a job
or a person has given exams of CSS and waiting for a high job.
13. STRUCTURAL
UNEMPLOYMENT
Structural Unemployment
• Structural unemployment occurs when certain industries decline because of
long term changes in market conditions.
• Arises from the mismatch of skills and job opportunities as the pattern of
labor demand in the economy changes.
• Often involves long-term unemployment .
• Prevalent in regions where industries go into long-term decline.
• Good example include industries such as mining , engineering and textiles.
• Occupational immobility of labor.
14. THERE ARE THREE TYPES OF LABOR
IMMOBILITY:
Geographical immobility
Geographical immobility occurs when workers are not willing or able to move
from region to region, or town to town.
Other factors also contribute to geographical immobility, such as strong social
and family ties,
and parents being unwilling to disrupt their children’s education by changing
schools.
Industrial immobility
Industrial immobility occurs when workers do not move
between industries, such as moving from employment in motor industry to
employment in the insurance industry. Industrial immobility has affected the
UK, and many other industrial countries, as the growth of service
industries, and the decline of manufacturing industries, has increased the need
for mobility.
15. THERE ARE THREE TYPES OF LABOR
IMMOBILITY:
• Occupational immobility
• Occupational immobility occurs when workers find it
difficult to change jobs within an industry. For example, it
may be very difficult for a doctor to retrain to be a dentist.
• Industrial and occupation immobility are most likely to
happen when skills are not transferable between industry
and job.
16. SEASONAL
UNEMPLOYMENT
• Seasonal Unemployment
• Seasonal unemployment exists because certain industries only
produce or distribute their products at certain times of the year.
Industries where seasonal unemployment is common include farming,
tourism, and construction.
• Regular seasonal changes in employment/labor demand.
• Affects certain industries more than others.
• Catering and leisure.
• Construction.
• Retailing.
• Tourism.
• Agriculture.
17. CYCLICAL UNEMPLOYMENT
• Cyclical unemployment exists when individuals lose their
jobs as a result of a downturn in aggregate demand
• If the decline in aggregate demand is persistent, and the
unemployment long-term, it is called cyclical
or Keynesian unemployment.
• Caused by a fall in aggregate demand leading to a loss of
real national output and employment .
18. DISGUISED UNEMPLOYMENT:
• Disguised Unemployment:
• When persons are working as a labor just to help and
engage busy, so a labor does not help in production
increment. When more people are engaged in some
activity than the number of person required for that, this is
called disguised unemployment.
• Examples:
• In a farm, two kids are working as a labor to help their
father and to engage busy. Here, two persons are
unemployed and that is disguised unemployment.
19. • Regional Unemployment
• When structural unemployment affects local areas of an
economy, it is called ‘regional’ unemployment. For example,
unemployed coal miners in Baluchistan Area’s and ship workers
in the Karachi add to regional unemployment in these areas.
20. MAJOR CAUSES OF UNEMPLOYMENT:
IN PAKISTAN
• Employment in the private sector absolutely stopped because they
shifted their capital to other countries because of nationalization of
industrial units badly affected the investment industrial sector.
• The higher growth rate of population is the major cause of
unemployment in Pakistan.
• Karachi is the biggest industrial base of Pakistan, but investors are
reluctant to invest there because of unrest and violence.
• Our educational system is also responsible for increasing
unemployment rate among the educated youth. The attitude of our
youth towards the choice of a career is unrealistic and unproductive
21. MAJOR CAUSES OF
UNEMPLOYMENT:
IN PAKISTAN
• Lack of enough industries to employ ever increasing number
of graduate in Pakistan
• The government is not involving in capital expenditures which
create more jobs.
• Main issue of unemployment in our country is that when ever
a new technology comes as software or hardware then all the
people starts studying about that. Then at the end, you will
see ten thousand students of a particular field about 5 to 10
job vacancies.
• Lack of infrastructure and facilities in the field of energy,
telecommunication and transportation also prevent the
industrialist from setting up new industries.
22. SUGGESTIONS:
• 1) Govt. should make efforts to push economic growth process. For this purpose
Economic Revival Package should announce for the revival of industries sector, to
stimulate production and investment.
• 2) Govt. should seriously try to boost exports by lowering tariffs.
• 3) Govt. should announce a package for the development of agriculture sector.
• 4) Beside this a number of fiscal and monetary measures should take to attract
industrialists and particularly foreign investment.
• 5) More Technical and Vocational training facilities should be provided. In this way
unemployed people will get the chance to enhance their skills and become able to
earn reasonable income.
• 6) With a view to reduce educate unemployment; self-employment scheme should
be encouraged in true manners.
26. 1. DEMAND-PULL INFLATION:
• Demand-pull inflation is generated when
aggregate demand for goods for all purposes-
consumption, investment and government exceeds
the supply of goods at current prices.
27.
28. FACTORS OF DEMAND PULL
INFLATION:
• Demand for non-development expenditures:
The governments in Pakistan since 1947 have not
been able to curb the non-development
expenditures.
29. • Increase in worker remittances:
During the last three years there is a rapid
increase in the flow of worker remittances in
the country .
• Increase in Wages:
The rise in wages , salaries ,dearness
allowances, bonuses in the annual budget
increase the purchasing power of the
employees.
30. • Foreign Economic assistance:
For rapid economic development, Pakistan has
been receiving foreign assistance.
• Construction of houses:
Since 1970 the unproductive expenditure on the
construction of houses, plazas etc. has also
contributed to the rising trend in prices.
32. COST-PUSH INFLATION:
• The rise in the general price level is also
caused by the rising costs of the factors of
production.
33. • Increase in Wages:
The increase in wages and the rise in prices
are chasing each other at a rapid speed
causing personal rise in the level of prices.
• Rising prices of imported goods:
The import prices of POL chemicals, fertilizers,
non-electrical machinery etc have gone up
in the world market.
34. • Increase in Indirect taxes:
The increase in the indirect taxes every year has
given the general price level .
• Rise in POL, Gas, and Excise Duty:
The multiplier effect of the rise in POL, gas prices,
and sales tax on a number of items has greatly
contributed to the cost push effect.
35. • Sick Industrial Units:
The increase in number of sick industrial units, fall in
industrial production due to strikes, electricity
breakdown cause decrease in production.
36. • Rise in support price of agriculture crops:
The Government raises the support prices of cotton,
wheat, sugar cane to protect the interests of
farmers.
37. Built-in inflation:
Inflation caused by the expectation of inflation
occurring. For example, employees expect that
inflation will happen, and so they negotiate for
wage increases.
38. Imported inflation
Open Inflation :
“Government takes
no steps to control
price rice”
It is due to increase in imported
goods cost.
39. Income Inflation
• Increase in income , causes increase the money
supply in the country that leads to income
inflation…
40. Deficit inflation
• Government has to borrow from banks and
non-banks & internal and external resources in
case of deficit financing…
42. Positive Effect Negative Effect
Increase in production Decrease the purchasing power
and saving
Increase employment opportunity Increase the interest rate
Enhance Economic development Create lot of social evils
Increase the profit of producers Effect the existing creditors
Benefit the cartels Effect the business cycle
Benefits the inflator hording
43.
44.
45.
46.
47. Monetary policy is the process by which the government, central bank,
Monetary policy is the process by which the
or monetary authority of a country controls supply and availability of
money.
government, central bank of a country controls supply and
48. Open market operations
High interest rates…
Reduction in monetary
expansion
49. Fiscal policy:
Fiscal policy is changes in the taxing and
spending of the federal government for
purposes of expanding or contracting the
level of aggregate demand.
50. Fiscal policy:
Highly increasing unproductive
expenditures must be control
Control on population
