What are the personal, economic and social consequences of unemployment?
Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.
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Step 1
Let us discuss certain concepts related to unemployment:
Labor force: In an economy, labor force refers to the part of the working age population (aged 15-69) that is willing and able to work. It is the sum of employed and unemployed people.
Employed: Those people who belong to the labor force and are working belong to the employed category.
Unemployed: This includes the people who are willing and able to work but do not possess job.
Unemployment: Unemployment refers to the situation where people in the working age population (aged 16-59) are willing and able to work but cannot find work.
Unemployment rate: It is the number of people unemployed as a percentage of labor force. It is calculated using the formula below:
Step 2
Unemployment rate is a misery for an economy. There are several personal, social and economic costs associated with persistent, long-term and high unemployment rate. Some of them are listed below:
Personal consequences of unemployment:
Financial Stress
Homelessness
Social isolation
Issues and problems with partners
Mental and psychological stress
Alienation of teenagers due to complexes
Family breakdown
Indebtedness
Generations of poverty due to poverty trap
Behavioral issues with children
Social stigma related to economic status
Continuous decline in living standards
Health issues due to lack of healthcare affordability
Decreased confidence levels, etc.
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