The Causes Of Unemployment

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It is a well-known fact that unemployment represents one of the most important problems in the society worldwide. Specifically, it has become a worrisome subject in the European Union, due to the constant high rates of unemployment existing in most of its countries if we compare them with some other countries like Japan or even the United States, who presents low unemployment rates. But what does exactly unemployment means? Looking for a precise definition, we find that there is not a common meaning for this concept: it is a little bit ambiguous. On the one hand, many professionals in economy defines unemployment as the disposition of the people to be employed at a specific wage. On the other hand, government statistics defines it as the situation…show more content…
On her book, she states that one factor that affects unemployment is that the labour markets is constantly changing, now that many employees move from one job to another as well as those that are leaving and entering the workforce. To her, the problem arrives when these changes takes too much time caused by the absence of perfect information, the costs of training again new employees or the heterogeneity of the new jobs that are opening, what lead to a long time interval of unemployment for…show more content…
Although Spain has carried out many different attempts to reduce youth unemployment through labour market policies, many of these have been ineffective. A lot of young individuals have enrolled in different programs but the problem is that these programs have focused on the wrong things. For instance, Spain used half of the resources destined for policies and programs on trying to hire and retain of personnel by subsidizing their social security contribution that firms are supposed to pay. The EU15 used only one quarter throughout the period of 2005-2009. Moreover, Spain does not spend as much as EU15 on very important fields such as training, labour integration, and professional recycling. For instance the EU15 used on average during the 2005-2009 period 40% of their budget, while Spain only spent 24.5%. This information can be seen in Graph 5 of the appendinx, “Breakdown of ALMP spending (% of GDP, average 2005-2009)” where there is a comparison of the spending on training, employment incentives, job rotation and sharing, direct job creation, integration and reorientation and incentives for creating companies between Spain, the EU15, Netherlands and

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