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What are the economic effects of unemployment?
What are the economic effects of unemployment?
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Solution
The following are the economic effects of unemployment.
a. Wastage of resources- The unemployed individuals in a country implies that a large part of human resources remain unutilised. This leads to wastage of resources and under-utilisation of human capital.
b. Economic offenses and crime- Unemployed people get involved in criminal activities as they have no other means to earn their livelihood.
c. Poverty and income inequality- Increasing unemployment adds to poverty and income inequality due to the varying distribution of income among people.
d. Loss in output- Since large-scale unemployment implies under-utilisation of manpower, the level of output in such a scenario is less than the optimum level.
a. Wastage of resources- The unemployed individuals in a country implies that a large part of human resources remain unutilised. This leads to wastage of resources and under-utilisation of human capital.
b. Economic offenses and crime- Unemployed people get involved in criminal activities as they have no other means to earn their livelihood.
c. Poverty and income inequality- Increasing unemployment adds to poverty and income inequality due to the varying distribution of income among people.
d. Loss in output- Since large-scale unemployment implies under-utilisation of manpower, the level of output in such a scenario is less than the optimum level.
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