EMPLOYMENT

Employment and Unemployment

Employment and Unemployment

Question 1

The standard UN definition of youth is those people who are between the ages of 15 and 24 inclusive. Nickell and Ochel (2005) has pointed out that, in practice, this definition may vary according to the cultural and social characteristics of the context; however, in industrialized countries, the lower limit is usually the statutory minimum school leaving age. There are greater differences across countries in the definition of the upper limit; for example, in Britain youth employment policy covers those aged 16 to18, while in Southern Italy youth employment policy is targeted at people between the ages of 14 and 32. The standard ILO definition of the unemployed are “those people who have not worked more than one hour during the short reference period, which is usually the previous week or day, but who are available for or actively seeking work” (Nickell and Ochel 2005 27).

Nickell and Ochel (2005) suggested unemployment has risen primarily because private-sector job creation has dropped sharply. The Nickell and Ochel (2005) reported the primary factor driving unemployment higher in the current recession has been lower job creation. The Nickell and Ochel (2005) report concluded that reduced creation of new jobs accounted for 71% of the drop in net employment during the recession that began in 2007. The Elhorst (2003) also indicated annual private fixed investment has fallen by 13% since the recession began. As long as GPI remains low, and entrepreneurs hold back from starting new enterprises or expanding into new operations, job creation will remain low, and unemployment will stay high.

Belot and Jan (2004) of the Brookings Institution indicates progress in job creation. Burtless noted that for the twelfth consecutive month ending December 2010, private employers added to their payrolls, but at a pace that is too slow to reduce the unemployment rate noticeably. For FY 2010, private employers added slightly more than 110,000 job a month. The CEA determined that the ARRA 2009 means to assess the cost to create a new job is based upon the belief that a $1 fiscal spending stimulus increases GDP demand by one dollar (a multiplier of 1). In turn, this spending will increase job creation by the average ratio of GDP to jobs.

Question 2

Structural unemployment

Technically it is a mismatch between supply and demand for workers. In this kind of unemployment, the supply has different characteristics so demand can be given which makes it likely that a portion of the population can not find work steadily. This type of unemployment causes a serious situation for the working population in a given sector. Furthermore, the permanently growing technology factor makes it less labour required in high technology, leaving out large masses into unskilled work considered.

Frictional unemployment

Frictional unemployment (by rotation and / or search) appears even though the job matches the number of people available for work, i.e. supply equals demand. It is referred to workers looking to change jobs in order of progress or simply ...