unemployment

definition

individuals between the ages of 15 and 64 who are willing and able to work but who do not have jobs

strict definition

individuals who are actively looking for work or trying to become self-employed

expanded definition

includes unemployed individuals not looking for work or trying to become self-emplyed

unemployment numbers can be obtained through:

1. census

2. population survey

3. registrations of unemployed individuals with the department of labour (so they can get UIF)

4. a sample survey (the Quarterly Labour Force Survey) by Statistics South Africa

how to calculate unemployment rate

(number of unemployed % EAP) x 100

what does EAP stand for

economically active population

name the causes of unemployment

1. frictional

2. structural

3. seasonal

4. cyclical

explain frictional unemployment

• refers to people who are ‘between jobs’

• people who are changing jobs

• refers to short term unemployment

• this type can occur under conditions of full employment

• full employment: everyone who wants a job is able to get a job

explain structural unemployment

• most serious type as it can occur at any time, even when there is high economic growth

• this type is the result of structural changes in the economy such as advances in technology

• certain types of work may become redundant due to changes in the economy

explain cyclical unemployment

• related to the business cycle and occurs due to a lack of demand for labour during the downswing of the business cycle

• during a recession there is a decline in economic activity and the demand in households for goods and services decreases and this results in a decrease in demand for labour

• it is also referred to as demand-deficient unemployment

explain seasonal unemployment

• involuntary form of unemployment due to labour that is only demanded during certain seasons

• this types of unemployment is common in certain sectors of the economy such as agriculture and services such as tourism as they have seasonal needs for labour

• only a small percentage of people are affected by this type of unemployment

• for example many agricultural workers are only needed in spring and autumn for planting & harvesting

• as a result farm workers will be redundant during other seasons