Question

discuss the various effect of unemployment

Answer 1

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Individuals may become dispirited by unemployment and lose their self-esteem and confidence. This may affect their motivation to work. The longer individuals are unemployed, the more they may lose their skills and become uemployable which is bad for the economy as well.

On top of that, the problems associated with unemployment may result in the unemployed being less healthy, which leads to health-related costs. Areas of high unemployment and social deprivation may also experience higher crime levels, suicide rates and psychological problems. Certainly, both the national economy, and society in general, suffers from high rates of unemployment especially when it becomes long-term.

As well as these microeconomic and sociological effects, there will also be macro effects. These will include:

1) Loss of output to the economy -


the unemployed could be producing goods and services and if they are not, then GDP is lower than it could be -this is the opportunity cost of unemployment.

2) Loss of tax revenue -

unemployed people are not earning and not paying tax. The government has reduced revenues to spend on public services.

3)Increase in government expenditure -

the government has to pay out benefits to support the unemployed - less revenue and more expenditure.

4)Loss of profits -

with higher employment firms are likely to sell more and make higher profits. If they make less profit because of unemployment, they may have less funds to invest.

Answer 2

Various effects of unemployment are :
•Downfall in countries economy.
•people will not be able to earn livelihood. etc ..