An economic condition marked by the fact that individuals actively seeking jobs remain unhired. Unemployment is expressed as a percentage of the total available work force. The level of unemployment varies with economic conditions and other circumstances.

According to the International Conference of Labour Statisticians Resolution, 1982, a person of working age is classified as unemployed if, during a specified reference period (either a day or a week), he or she was:

  • “without work", not even for one hour in paid employment or self-employment of the type covered by the international definition of employment;
  • "currently available for work", whether for paid employment or self-employment; and
  • "seeking work", by taking active steps in a specified recent period to seek paid employment or self-employment.

    These three criteria for measuring unemployment, with certain exceptions and amplifications, are almost universally applied, particularly where unemployment is measured through population censuses and household surveys.

    In the set up of a modern market economy, there are many factors, which contribute to unemployment. Causes of unemployment are varied and it may be due to the following factors:

    • Rapid changes in technology
    • Recessions
    • Inflation
    • Disability
    • Undulating business cycles
    • Changes in tastes as well as alterations in the climatic conditions. This may in turn lead to decline in demand for certain services as well as products.
    • Attitude towards employers
    • Willingness to work
    • Perception of employees
    • Employee values
    • Discriminating factors in the place of work (may include discrimination on the basis of age, class, ethnicity, color and race).
    • Ability to look for employment

    Unemployment is an important statistic used by the government to gauge the health of the economy. If unemployment gets too high, the government will try to stimulate the economy and create jobs with expansionary monetary or fiscal policy. It will also create additional benefits to aid the unemployed until they can find jobs.

    National unemployment is caused when the economy slows down, and businesses are forced to cut costs by reducing payroll costs. Unemployment can also be caused by competition in specific industries or companies. Unemployment can also be caused by poor job performance.

    The consequences of unemployment for the economy are less consumer spending, as workers have less money to spend until they find another job. If high national unemployment continues, it can cause a recession or even a depression. That's because less consumer spending from unemployed workers reduces business revenue, which forces them to cut more payroll to reduce their costs.

    Labor force

    3.232 billion (2008 est.)

    Unemployment Rate

    30% (2007 est.)

    Labor force - by occupation







    39% (2007 est.)

    Types of Unemployment

  • Cyclical (Demand deficient Unemployment) unemployment: When there is not enough aggregate demand for the labor.
  • Frictional: When moving from one job to another, the unemployment temporarily experienced when looking for a new job.
  • Structural: Experienced when the structure of an industry or skill demands changes in mainly: # switching from a declining industry to a rapidly growing one. #Pace of change in the tastes of people.,# Regional Structure of industry.
  • Technological: Caused by the replacement of workers by machines or other advanced technology.
  • Classical (Real-wage): When real wage for a job are set above the market-clearing level, commonly government (as with the minimum wage) or unions, although some suggest that even social taboos can prevent wages from falling to the market clearing level.
  • Marxian: when unemployment is needed to motivate workers to work hard and to keep wages down, to preserve profitability.
  • Seasonal: When an industry only is in demand certain times. For example, ski slopes, agriculture, Shopping Mall Santas, Snow plow services.

    Given that the majority of the world’s unemployed live in countries with minimal welfare systems, no employment equates to no income and therefore no food, no shelter, no medicine and none of the other basic necessities of life. In countries where family represents the only safety net, the unemployment of those that should be key breadwinners extends the negative financial impact of unemployment to entire families

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