Causes of unemployment

With the search for the causes of unemployment one must differentiate between structural, economic and individual reasons.

Overallally economic unemployment develops whenever the demand can be satisfied by the persons employed. The demand is limited by two different effects: During high incomes a large part is saved to buy instead of buying something and with low incomes is enough the income not yet times around the most necessary (E.G. ALG ii-receiver). \ ldots: Income and consumption sample 2003, Federal Statistical Office, Wiesbaden 2005 for explanation, why the demand is so small, are brought forward many explanations. One of these explanations is called structure crisis. Since the solvent demand for goods (and services) is satisfied, that means that the demand for workers (for what reasons also always) is smaller than the offer. Which persons are affected by unemployment, hangs thereby of individual characteristics of the job seekers off (qualification, age, state of health, residence, origin, sex"…).

Neoclassical explanation beginning

The neoclassical economic theory states that durable unemployment is predominantly caused by national interventionism. This increases labor costs by obligation deliveries for national unemployed person cashes, by minimum wages or other laws and lowers so the payment-ready demand for workers.

Since unemployment represents overallally economic in the long run a market imbalance, this can be ideal-typically only diminished in (neo) classical opinion, if it comes to price reductions on the job market (thus labor costs reduce, i.e. wages, ancillary wages, fixed costs, etc.) or if the worker offer is reduced. The employers and it intimate experts of economic politics therefore state that to high wages one of the main causes of unemployment is. One compares different future scenarios , then a per cent less wages between 0,5 and 2 per cent entails more occupation. One calls this value the elasticity of the labor demand.

S.M. Burges, Employment Adjustment in UK Manufacturing, Economical journal 98, 1988, S.81-103 

Thus for example the industrial worker wages (material labor costs per hour) from 1982 to 2002 in the USA by 4%, in the Netherlands by 20% and in West Germany including west Berlin increased by 38%. Accordingly the performed active volume in the same period in the USA around 36% and in the Netherlands rose around 24%, while it did not rise in West Germany. According to the classical and neoclassical theories the price mechanism applies as reconciliation also on the job market. According to the employers' associations, which follow this theory, the wages would have to sink so long with an offer in excess at workers, until the demand for workers increased, i.e. until supply and demand agree.

Articles in category "Unemployment"

We found here 24 articles.

Related Websites

We found here 3 related websites.

• EDD - Unemployment Insurance - Programs and Services
  The Employment Development Department (EDD) is one of the 4 departments/boards under the California Labor and Workforce Development Agency.


• Unemployment - Wikipedia, the free encyclopedia
  The unemployment rate is the number of unemployed workers divided by the ... Unemployment rate (as a percentage of the labor force) in the United States. ...


• Unemployment Compensation
  An overview of the unemployment insurance program in the United States, including benefits paid and...