SEMINAR 02
MASTER OF BUSINESS ADMINISTRATION 2023
ANNA UNIVERSITY REGIONAL CENTER COIMBATORE
LOW
CAPITAL
VICIOUS
LOW LOW
SAVINGS
CIRCLE PRODUCTIVIT
Y
LOW
INCOME
CONTENTS
● Introduction
● Definition
● Types of unemployment
● Impact of unemployment
● Measurement
● Solution
Introduction
● It is a characteristic of underdeveloped countries(underemployment).
● Obstacle to economic development.
● Unemployment leads to poverty.
Meaning of Full Employment
Full employment refers to a situation in which all the workers who are
capable of working and willing to work to get an employment at reasonable
wages.
It does not imply that all adult have jobs.
UNEMPLOYMENT
Unemployment refers to a situation in which
the workers who are capable of working and
willing to work do not get employment.
Unemployment refers to a situation when a person
searches for a job actively and is unable to find
work. Unemployment is an important indicator of
the economy.
Types of unemployment
● Frictional unemployment. ...
● Structural unemployment. ...
● Cyclical unemployment. ...
● Seasonal unemployment.
FRICTIONAL UNEMPLOYMENT
Frictional unemployment occurs when an employee quits
their job voluntarily in pursuit of another. Unlike other
types of unemployment, frictional unemployment does
not indicate an unhealthy economy. This can also occur
when people resign from their jobs to look for better
prospects.
Examples of frictional:
unemployment include employees leaving their jobs to pursue higher
studies.
Freshers and individuals entering the workforce for the first time also
experience this type of unemployment.
Structural
The release of new technologies and processes can lead to
structural unemployment when the skills of employees do
not match the demands of the company. While there may be
plenty of jobs in the market, a mismatch between company
expectations and employees' skills leads to such
circumstances. The automation process can replace jobs and
skills with the introduction of new technologies, along with
less demand for older technologies.
For example: A restaurant may start using new software to handle reservations and customer
orders. The restaurant no longer requires servers to physically take orders and convey them to
kitchen staff. Since the software can perform servers' duties, the restaurant no longer requires
the servers. The company may lay off these employees since a digital system has replaced
them and their services. This type of unemployment especially affects mid-aged people who
tend to be less proficient in using new technology or lack technical skills.
Cyclical unemployment
Cyclical unemployment refers to the unemployment which is
caused by the changes in business cycles, that is economic upturn
or downturn. Cyclical unemployment is a component of overall
unemployment and is affected by the economic recession or
expansion. Cyclical unemployment is highest during an economic
recession and is lowest during an economic expansion.
An example: cyclical unemployment is when construction workers were
laid off during the Great Recession following the financial crisis of 2008.
Seasonal
Seasonal unemployment occurs because of changes
in the weather or working season. This type of
unemployment is common in tourist-rich areas where
there is a demand for labour when there is enough
tourism. Seasonally employed professionals usually
transition to other jobs during the off-season.
For example: outdoor employees, like construction crews, typically face
unemployment during winter. Resort staff who might only work summers at a
lake or winters at a ski resort might be unemployed during other seasons in the
year. Seasonal unemployment also affects harvest crews who only work during
particular harvest seasons. Ice cream sellers who go from door to door selling
ice cream are also seasonal employees.
Causes of unemployment
● High population growth.
● Insufficient rate of economic progress.
● Absence of employment opportunities in activities other than
agriculture.
● Expensive education.
● Joint family system.
● Increasing turnout of students from indian universities.
● Slow developing of industries.
Impact of unemployment
● It block the growth rate of the economy.
● It creates more poor section of the society in the economy.
● Due to the unemployment, consumption and demand falls which
lead to lack investment and further falls in the growth.
● Unemployment tends to increase economic overload. The
dependence of the unemployed on the working population
increases.
● The quality of life of an individual as well as of society is
adversely affected.
Impact of unemployment
Economic
Impact Social Impact
SOCIAL IMPACT
Unemployment has a significant impact on society,
affecting individuals, families, communities, and
the broader economy. The social impacts of
unemployment are multifaceted and can be both
direct and indirect. Here are some of the key social
impacts of unemployment:
LIST OF IMPACTS IN SOCIETY
● Mental and emotional health.
● Family stress.
● Community impact.
● Health consequences.
● Education and skill erosion.
● Generational impact.
● Social unrest.
● Reduce economic growth.
ECONOMIC IMPACT
Falling of GDP due to an imbalance
between the demand and supply in
● Reduced Consumer Spending. the market. Increasing the socio-
● Lower Tax Revenues economic cost of the state
government by bearing their
● Increased Social Welfare Costs expenses.
● Reduced Economic Growth
● Business Uncertainty
● Skills Erosion
● Poverty and Inequality
● Strain on Financial Institutions
● Impact on Consumer Confidence.
● Long-term Economic Scarring:
Measurement
SOLUTIONS
Thank
You…
