Question

What are the impact of unemployment on economy

Answer 1

there are fewer people with jobs, then they have less disposable income to spend on investments. Economists call unemployment a lagging indicator of the economy, as the economy usually improves before the unemployment rate starts to rise again. However, unemployment causes a sort of ripple effect across the economy.

Answer 2

Hey friend,
Here is the answer you were looking for:
Unemployment is said to exist when people who are willing to work at the going wages but cannot find jobs. Unemployment has negative effect on the economy development of the country.
I) Wastage of resource: Human capital is one of the most important resources. Unemployment leads to Wastage of man power resource. People who are an asset for the economy turn into a liability.
II) Poverty: The basic cause of poverty in unemployment. People do not have enough money to support their family. Inability of educated people, who are willing to work to find employment implies a great social waste.
III) Increase in dependent population: Unemployment increase the economic overload. The dependence of the unemployed on the working population increase.
IV) The quality of life of an individual as well as of the society is adversely effected.
V) Class struggle: Unemployment divides the society into haves & have-nots.
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