Answer to Question #271602 in Economics for Ebrahim

Question

What is unemployment? How can we measure

Answer 1

Unemployment is a socio-economic phenomenon in which part of the labor force (economically active population) is not employed in the production of goods and services. The unemployed, along with the employed, form the country's labor force. In real economic life, unemployment appears as an excess of labor supply over demand for it.

The unemployed are persons who have reached the age of 16 and over, who during the period under review:

* did not have a job (profitable occupation);

* were looking for work, i.e. applied to the state or commercial employment service, used or placed advertisements in the press, directly addressed the administration of the enterprise (employer), used personal contacts and other methods, took steps to organize their own business;

* were ready to get started.

When classified as unemployed, all three of the above criteria must be met.

The controversy over the definition of full-time unemployment is exacerbated by the fact that in practice it is difficult to establish the actual unemployment rate. The entire population is divided into three large groups. The first includes persons under the age of 16, as well as persons in specialized institutions - i.e. persons who are not considered potential components of the workforce. The second group consists of adults who potentially have the opportunity to work, but for some reason are not working and are not looking for work. The third group is the labor force, this group includes persons who can and want to work. It is believed that the workforce consists of employed and unemployed, but actively looking for work. The unemployment rate is the percentage of the unemployed portion of the workforce.