Question

. Explain any five disadvantages of unemployment.

Answer 1

Waste of resources/opportunity cost of lost potential output (PPF)Less economic growthRedundancies waste resources invested in training & education.Hysteresis effect - Longer the person is out of work, greater the loss of skills/motivation -> less incentive to find a work, become reliant on state welfare -> rise in structural employment and natural rate of unemploymentWorsens Government finance - Increased benefits i.e. JSA and decreased income tax, national insurance & VAT revenue = budget DEFICIT.Higher crame rates, divorce rates, poorer health & lower life expectancyFalling real incomes -> widening income inequality gapFinancial worries -> mental health issues, breakdown of relationships & even suicide

Answer 2

• It leads to wastage of manpower resource.
• Economy turns to liability.
• General decline of health status.
• People do not have enough money to support their family.
• It tends to increase economic overload.