Question

What are the consequences of unemployment? How has it detrimental impact on the overall growth of an Economy?

Answer 1

the economic consequences of unemployment are :-

– Non utilisation of manpower; human resources are not fully utilised. It is sheer wastage for the society.

– Loss of output in the economy because unemployed persons only live as consumer not as producers.

– Thus living only as consumer will add up the consumption not the production. They don’t earn nor do they save for investment; thus capital formation is low.

– Due to disguised unemployment there is a low level of productivity which implies lesser surplus from an output for future generation.

Thus these consequences leads to not only low level of present output but also the low level of future output because of lesser surplus for future investment.



Detrimental effects of unemployment over economy :
• Leads to wastage of manpower resources,
• Tends to increase economic overload.
• The dependence of the unemployed on working population increases.
• Quality of life adversely affected.
• Unemployed turns into a liability.
• There is feeling of hopelessness and despair among youth.

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