2. What is unemployment?
– Total number of adults (aged 16 years or older) willing and able to work
and who are actively looking for work and have not found a job
(in other way)
– Unemployment refers to a situation in which the workers who are capable
of working and willing to work do not get employment

3. NEWS
• India's unemployment rate stood at 3.8% in
July , 2012
• India is 96th position in world in 2011
• Gujarat has least unemployment rate among
all states, by Government of India

4. Countries Unemployment rate
Rank Country Unemployment rate (%)
1 Zimbabwe 95
2 Nauru 90
3 Liberia 85
4 Burkina Faso 77
5 Turkmenistan 60
Cocos (Keeling)
6 60
Islands
7 Djibouti 59
8 Namibia 51.2
9 Senegal 48
10 Nepal 46

5. Type of unemployment
• Frictional Unemployment
Results from the fact that workers must search for appropriate job offers This
takes time, so they remain temporarily unemployed
Example :- Students
• Structural Unemployment
Results from a poor match of workers’ abilities and skills with current
requirements of employers
Example:- computers revolution
• Technological unemployment
it is unemployment primarily caused by technological change
Example:- Printing industry

6. • Cyclical Unemployment
– Results from business recessions that occur when aggregate (total) demand is
insufficient to create full employment
Example:- construction job
• Seasonal Unemployment
– Results from the seasonal pattern of work in specific industries
Examples
 Tourism industry
 Farming
• Disguised unemployment
Unemployment that does not affect aggregate output
ex - fragmentation of land

7. Causes of unemployment
• Rapid changes in technology
• Recessions
• Inflation
• Disability
• Limited land
• Seasonal Agriculture
• Decline of Cottage Industries
• Inadequate Employment Planning
– Population growth 1.5% on an avg
– More labour force 2.5% increase p.a
– Employment growth 2.3% p.a

8. • Over 70% of total labour force is illiterate or
educated below primary level
• Agriculture – backward farming
• 70 % population depend on it

9. Effects of unemployment
• At individual level
– Mental stress
– Loss of self esteem
– Directly linked to poverty
• At social level
– Civil unrest
– Law and order problem ( naxalist , thefts etc)

10. • At economic level
Wage inflation
Reduction in consumer expenditure
Under-utilization of resources
Increase in debts
Decrease in return on investment

11. Social impact
According to okun’s law when GDP decreases by
2% unemployment increases by 1% .
According to philip’s there is an inverse relationship
between unemployment and inflation .
Frictional and cyclical unemployment is not a threat
to an economy whereas, structural unemployment
is a serious issue as it is a consequence of recession.

12. Basic Eligibility for getting Benefits of
Unemployment
• To be eligible for unemployment benefits, five
requirements must be met: –
• Sufficient covered wages in the base period
• Unemployed through no fault of own
• Able to work
• Available for work
• Actively seeking work

13. Few Benefits of Unemployment
- Unemployment compensation for ex-service members
- Trade readjustment allowances
- Extended benefits
- Self-Employment assistance
- Disaster employment benefits

14. Unemployment benefits are calculated by:
- EI ( employment insurance ) benefits are calculated using the amount of money
you earned in the base period, which is a specific 12 month period.
- Your weekly amount is calculated based on the three month base period in which
you earned the most money.
How long can individuals receive unemployment benefits?
- The EI benefits are available for a period up to one year after the
claim is filed.
- The number of weeks benefits will be received will vary between
12 to 26 weeks.
• Note: Unemployment benefits are taxable.

15. Measurement of unemployment
• Economists typically focus on the
unemployment rate. The unemployment rate
is expressed as a percentage, and is calculated
as follows:
Unemployment rate = unemployed worker/total labor force *1oo

16. Steps taken by govt.
• Integrated Rural Development Programme (IRDP)
• Drought Prone Area Programme (DPAP)
• Training for Self-Employment
• Jawahar Rozgar Yojana
• Nehru Rozgar Yojana (NRY)
• Small and Cottage Industries
• Development of Organized Sector

17. Cont…..
• Prime Minister's Integrated Urban Poverty Eradication
Program (PMIUPEP)
• The Swaran Jayanti Rozgar Yojana
• Jawahar Gram Samridhi Yojana
• Other Programmes
(i) Pradhan Mantri Gramodaya Yojana (PMGY)
(ii) Pradhan Mantri Gramodaya Yojana (Gramin Awas)
(iii) Pradhan Mantri Gramodaya Yojana-Rural Drinking water project.
(iv) Pradhan Mantri Gram Sadak Yojana (PMGSY)
(v) Autyodya Anna Yojana.
(vi) Jai Prakash Rozgar Guarantee Yojana (JPRGY).
(vii) Valmiki Ambedkar Awas Yojana (VAMBAY).

18. NAIRU
• (Non Accelerating inflation rate of
unemployment)
• Now economists prefer to talk about the NAIRU,
the lowest rate of unemployment at which
inflation does not accelerate.
• The lowest rate of unemployment at which the
jobs market can be in stable equilibrium.
• When unemployment is above this rate, demand
can potentially be increased to bring it to the
natural rate, but attempting to lower it even
further will only cause inflation to accelerate.

19. Possible Solution of unemployment
• Frictional unemployment Solution
If unemployment benefits were reduced unemployed workers might
become more willing to work (shift the aggregate supply of labour to
the right)
Improve awareness of available jobs
Structural Unemployment solution
Adult retraining programmes
Government gives subsidies to firms that provide training for workers
Enhance geographic mobility by building affordable housing or give
subsidies/tax breaks
Set up apprenticeship programmes to allow people to gain skills

20. • Seasonal unemployment solutions
Encourage people to take different jobs in their off season
Reduce unemployment benefits
Greater flow of information
• Technological unemployment
Excess labour could be transferred to where it is actually
needed-for ex: overseas.
awareness of technology within population
educate people about technology
increase number of technological institutes

21. • Cyclical Unemployment
reduce in interest rates
• Disguised unemployment
create employment opportunities in the urban areas and rural area