Rate of Unemployment

Rate of Unemployment - condition of unemployment in the...

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Rate of Unemployment: One of the important functions of the modern public authority is to reduce unemployment. This requires large-scale public spending on employment promotion schemes and on the payment of unemployment doles. So that this function can be performed promptly and satisfactorily, it is important that the information about unemployment conditions should be quickly available. This becomes possible with the help of the rate of unemployment. We can compute rate of unemployment as follows: If we assume total labor force of the size of 40 million workers and those unemployed to be 2 million, then the rate of unemployment will be 5 percent. Usually in every society there is a small percentage of labor force which is always in the
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Unformatted text preview: condition of unemployment in the sense they are either seeking jobs or they are voluntarily unemployed. Such a percentage (of about 3 to 4 of the total working force) is considered the natural rate of unemployment. Public authority need not introduce any special measures to deal with such unemployment. If we assume 3 percent as a natural rate of unemployment then in the example, above 2 percent (5-3) can be said to be net unemployment of involuntary type and requires quick remedial measures. Though public unemployment programs are primarily targeted against involuntary unemployment, other forms of unemployment may also derive some indirect relief from such activities....
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This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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