Briefly discuss the various adverse effects of unemployment.
Briefly discuss the various adverse effects of unemployment.
Unemployment results in a number of adverse effects which can be classified as economic effects and social effects.
These effects are explained below
(i) Economic Effects - These effects are visible in terms of loss which is measurable in monetary terms. The various adverse effects belonging to this category are explained below
(a) Loss of Output - Unemployment is basically underutilisation of the human resources of the country leading to loss of output.
(b) Loss of Human Resources - Unemployment is a situation in which the productive capacity of able and willing persons is wasted. This leads to a waste of human resources.
(c) Low Productivity - Unemployment increases the dependence on agriculture and this results in low productivity per labour employed. Low productivity adversely affects the growth rate of the economy.
(d) Low Rate of Capital Formation - Capital formation depends on the level of income in the country. Due to unemployment, the income levels are low, resulting in low rate of capital transformation.
(ii) Social Effects - These effects manifest themselves in the form of many social problems which are discussed below
(a) Rise in Poverty - Unemployment and poverty are directly correlated. With the increase in unemployment, the level of poverty in the country also rises.
(b) Increase in Inequalities - Unemployment generates inequality in the distribution of income and wealth, thus defying the objective of social justice and resulting in class conflicts between the rich and the poor.
(c) Low Standard of Living - Unemployment affects the income of an individual adversely and leads to a fall in his standard of living.
(d) Social Unrest - An unemployed person creates social unrest by indulging in anti-social activities such as theft, extortion, kidnapping, etc. In extreme cases, he can also resort to terrorism.
(e) Results in Depression - An unemployed person considers himself unwanted and useless, and suffers from depression.
Unemployment results in a number of adverse effects which can be classified as economic effects and social effects.
These effects are explained below
(i) Economic Effects - These effects are visible in terms of loss which is measurable in monetary terms. The various adverse effects belonging to this category are explained below
(a) Loss of Output - Unemployment is basically underutilisation of the human resources of the country leading to loss of output.
(b) Loss of Human Resources - Unemployment is a situation in which the productive capacity of able and willing persons is wasted. This leads to a waste of human resources.
(c) Low Productivity - Unemployment increases the dependence on agriculture and this results in low productivity per labour employed. Low productivity adversely affects the growth rate of the economy.
(d) Low Rate of Capital Formation - Capital formation depends on the level of income in the country. Due to unemployment, the income levels are low, resulting in low rate of capital transformation.
(ii) Social Effects - These effects manifest themselves in the form of many social problems which are discussed below
(a) Rise in Poverty - Unemployment and poverty are directly correlated. With the increase in unemployment, the level of poverty in the country also rises.
(b) Increase in Inequalities - Unemployment generates inequality in the distribution of income and wealth, thus defying the objective of social justice and resulting in class conflicts between the rich and the poor.
(c) Low Standard of Living - Unemployment affects the income of an individual adversely and leads to a fall in his standard of living.
(d) Social Unrest - An unemployed person creates social unrest by indulging in anti-social activities such as theft, extortion, kidnapping, etc. In extreme cases, he can also resort to terrorism.
(e) Results in Depression - An unemployed person considers himself unwanted and useless, and suffers from depression.
