UNEMPLOYMENT

OutlineUnemployment definitionUnemployment in the classical modelFrictional and structural unemployment

models; search and job mismatch theoryBotswana Labour market

EmploymentUnemployment

Youth unemploymentconclusion

UNEMPLOYMENT DEFINITION

Unemployment, as defined by the International Labour Organization occurs when people are without jobs and they have actively looked for work within the past four weeks. 

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It occurs mainly because of the following reasons: 1. Imperfect flow of information; it takes time for

employers with vacant position to find suitable employees and employees do not know enough about the potential employers.

2. New entrant enter into the job market every time, it takes time before they get settled in a job.

3. Some of current employees quit their job in anticipation of finding new and better job. They are unemployed until they find another job.

Frictional and structural unemployment

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It occurs because of redundancies due to the structural

change in the economy.

Some skill become obsolete and people with these skills

become unemployed.

It happens when an old technology is replaced by new

technology of production.

Some sectors and regions experience outflow of capital

resources, become less attractive place for investment,

therefore experience less demand for labour and higher

unemployment rate.

Structural unemployment: Labour Market Rigidity

GDP, EMPLOYMENT RELATIONSHIP

•Botswana has a history of strong economic growth•The rapid economic growth has been accompanied by rapid employment growth•In long tern, employment has failed to keep up with GDP growthHigh formal sector employmentSmall informal and subsistence agric

LABOUR FORCE•Govt is the largest single employer

•Formal employment – no decline during recession

•Only impact was on mining employment – small proportion of total

Unemployment by age

•Botswana Unemployment rate around 17.5%•Female unemployment- 20%•Male unemployment – 15%

Unemployment high among the youth

•High female unemployment among the youth

•AROUND 70% total unemployment is youth unemployment

•Historically high youth unemployment rate

•Why high youth unemployment?•Young people fall within the intermediate sector with low paying jobs•1% increase in adult unemployment will be matched by a 2% increase in youth unemployment

YOUTH UNEMPLOYMENT

Employment opportunities revolution

A young man on fire in Tunisia protesting against his stall being shut down as he couldn’t afford a trading licence

Measures to reducing unemploymentRemedy deficiencies in the labour market as a

whole;Improve the quality of supply e.g. Training to

suite the market demandImprove demand of labour e.g. Luring FDI,

wages/salaries need to be more flexible and responsive to market conditions

Improve quality of information and understanding market needs e.g. Create CV and HR institutions