Unemployment

A labour market diagram showing demand shifting inwards or an AD/AS diagram showing a deflationary gap.

It can lead to a surplus of labour if set above the equilibrium wage.

Increased crime, family breakdown, increased poverty, social exclusion.

The sum of structural, frictional, and seasonal unemployment when the economy is at full employment.

Due to the decline of certain industries in specific areas.

Frictional, seasonal, and structural unemployment.

Unemployment caused by a fall in aggregate demand in the economy.

People who are employed plus those actively seeking work.

Unemployed ÷ Labor force × 100

The percentage of the labor force that is actively seeking work but unable to find a job.

Short-term unemployment as workers transition between jobs.

Investment in education and retraining programs.

Lost output, lower productivity, increased government spending on welfare, lower tax revenue.

Unemployment not reflected in official figures, e.g., discouraged workers.

Stress, loss of income, permanent deskilling, reduced self-esteem.

Unemployment due to a mismatch between workers’ skills and job requirements - sectoral, regional and technological.

Discouraged workers and underemployment are not fully captured in official statistics.

A labour market diagram with a leftward shift in the demand for labor.

It ignores discouraged workers and underemployed part-time workers.