Macroeconomics

Topic

Group Name

Mubasher Javed 08031020-006 H.Hasnat Ahmad 08031020-027 Sidra Latif 08031020-040 Amina Javed Mir 08031020-083

Some Basic Concepts

Labor force

Employment & Unemployment

Unemployment rate

Frictional unemploymentStructural unemploymentCyclical unemploymentSeasonal unemployment

Frictional Unemployment:

A type on unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs.

Cyclical Unemployment:

A type of unemployment caused by insufficient total spending or by insufficient aggregate demand.

Structural Unemployment:

It is the unemployment of workers whose skills are not demanded by employers, who lack sufficient skill to obtain employment, or who cannot easily move to locations where jobs are available.

Seasonal Unemployment:

It is the type of unemployment which is caused by the seasonal nature of some industries like agriculture etc.

Causes of Unemployment

Higher growth rate of population.

Technology Business Trends Nationalization of

Business Units Political & Economic

Scenario

Lack of technical education

Shut down of Industrial units

Inefficient Micro Financing Schemes

Voluntary Unemployment

Smuggling etc….

Where Problem lies??

Total population= 160 millions (approx.)Labor force= 51.78 millionsPercentage labor force= 51.78/160 *100=32.3%Out of 51% population of women only 13.43%

are in labor force.Out of 49% population of men 52.1% are in

labor force.So, Pakistan has to increase its labor force to a

great extent.

World Labor Force:

2007-Total Labor Force of The World= 3140.3509million (approx.)

2008-Total Labor Force of The World= 3166.66million (approx.)

World Unemployment Rate 2007- 5.7% Unemployed Population 3140.3509*5.7/100=179million (approx.)

World Unemployment Rate 2008- 6.00%Unemployed Population 3166.66*6/100=190million (approx.)

World unemployment rate has been ranging from 5.7%-6.3% over the last ten years

World Unemployment Rate:

WOR L DWIDE UNE MP L OY ME NT R AT E %

8.97.1

17.4

4.8

2.54.2

7.2

13

23.5

3.25.2

0

5

10

15

20

25

US A UK

S PAIN

J APAN

NOR WAY

C H INA

INDIA

S AUD IA

S . AF R IC

A

MALAY S IA

PAK ISTAN

Economic and Social Impacts of Unemployment: Okun’s Law:

For every 1% increase in employment rate GDP falls by 2%....

When unemployment increases goods and services produced in a country decreases and it adversely affects the economy.

Increased Crime and Social Strife Deflationary Pressures Decreased GrowthLow purchasing power of peopleIncreased Government SpendingInvestors hesitate to invest where

unemployment rate is high.

Conclusion: Unemployment is a heinous problem of

the whole world. Same is the case with Paksitan with multiple challenges. Pakistan has to eradicate this economic and social evils along with all of its aspects to the maximum extent.