Causes And Effects Of Unemployment

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Unemployment happen when people active to seek the work but unable to get work. This will eventually resulted in the loss of incomes, production and human capital of a nation. High level of unemployment usually occurs when the economy recession where labour supply exceeds demand from the employers. Long-term unemployment will damages a person’s job prospects by destroying human capital. The degree of unemployment in a nation indicates the economic health of the country. Unemployment rate is used to measure the mess to take full advantages of labour resources because it signifies the percentage of labour force that is unemployed but are willing and actively seeking for work. Unemployment rate provides a precise measurement which was assured by The Bureau of Labour Statistics. However, there are several factors that affect the unemployment rate in a nation such as company downsizing, merger or acquisition, changes in technology and foreign competition, and job outsourcing to other nations.
Long term unemployment creates a very large amount of cost for an individual and economy as a whole. This may results in negative results of income, negative unexpected multiplier effects, oppression of national output, fiscal and monetary costs and merely social cost. The unemployed experiences a decline in the living standard. They have less purchasing power and may involve to debt problems which leads to social problems such as crimes. The unemployment also involves a loss of potential

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