Unemployment

Empirical methods Prescriptive and policy Heterodox Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is the proportion of people above a specified age (usually 15)[2] not being in paid employment or self-employment but currently available for work during the reference period.

Whatever its name, demand theory holds that if the unemployment rate gets "too low", inflation will accelerate in the absence of wage and price controls (incomes policies).

However, it would be impossible to attain this full-employment target using only demand-side Keynesian stimulus without getting below the NAIRU and causing accelerating inflation (absent incomes policies).

Problems with debt may lead to homelessness and a fall into the vicious cycle of poverty, which means that people affected in this way may not fit the job vacancies that are created when the economy recovers.

Alternatively, technological unemployment might refer to the way in which steady increases in labour productivity mean that fewer workers are needed to produce the same level of output every year.

Therefore, governments will seek ways to reduce unnecessary frictional unemployment by multiple means including providing education, advice, training, and assistance such as daycare centers.

[36] In the United States, for example, the unemployment rate does not take into consideration part-time workers, or those individuals who are not actively looking for employment, due to attending college or having tried to find a job and given up.

[71] However, in the United States, Canada, Mexico, Australia, Japan, and the European Union, unemployment is measured using a sample survey (akin to a Gallup poll).

In 1999, economists Lawrence F. Katz and Alan B. Krueger estimated that increased incarceration lowered measured unemployment in the United States by 0.17% between 1985 and the late 1990s.

Women more accurately planned for their future in the work force by investing in more applicable majors in college that prepared them to enter and compete in the labor market.

[77] A common theory in modern economics claims that the rise of women participating in the US labor force in the 1950s to the 1990s was caused by the introduction of a new contraceptive technology, birth control pills, as well as the adjustment of age of majority laws.

Other factors include the changing nature of work, with machines replacing physical labor, thus eliminating many traditional male occupations, and the rise of the service sector in which many jobs are gender neutral.

Such legislation diminished sexual discrimination and encouraged more women to enter the labor market by receiving fair remuneration to help raising families and children.

Unemployment can harm growth because it is a waste of resources; generates redistributive pressures and subsequent distortions; drives people to poverty; constrains liquidity limiting labor mobility; and erodes self-esteem promoting social dislocation, unrest, and conflict.

[87] According to a study published in Social Indicator Research, even those who tend to be optimistic find it difficult to look on the bright side of things when unemployed.

Using interviews and data from German participants aged 16 to 94, including individuals coping with the stresses of real life and not just a volunteering student population, the researchers determined that even optimists struggled with being unemployed.

[99] The study found that men expect themselves to be viewed as "less manly" after a job loss than they actually are and so they engage in compensating behaviors, such as financial risk-taking and increased assertiveness.

[104] Other researchers have found that today's high school seniors place a lower value on work than those in the past, which is likely because they recognize the limited availability of jobs.

[105] At the other end of the age spectrum, studies have found that older individuals have more barriers than younger workers to employment, require stronger social networks to acquire work, and are also less likely to move from temporary to permanent positions.

The fall of the Weimar Republic in 1933 and Adolf Hitler's rise to power, which culminated in World War II and the deaths of tens of millions and the destruction of much of the physical capital of Europe, is attributed to the poor economic conditions in Germany at the time, notably a high unemployment rate[111] of above 20%; see Great Depression in Central Europe for details.

This was notably implemented in Britain from the 17th century until 1948 in the institution of the workhouse, which provided jobs for the unemployed with harsh conditions and poor wages to dissuade their use.

That assumes perfect competition exists in the labour market, specifically that no single entity is large enough to affect wage levels and that employees are similar in ability.

In 1535, a bill was drawn up calling for the creation of a system of public works to deal with the problem of unemployment, which were to be funded by a tax on income and capital.

[130] In 1547, a bill was passed that subjected vagrants to some of the more extreme provisions of the criminal law: two years' servitude and branding with a "V" as the penalty for the first offense and death for the second.

[133] The Poor Relief Act 1601, one of the world's first government-sponsored welfare programs, made a clear distinction between those who were unable to work and those able-bodied people who refused employment.

[134] Under the Poor Law systems of England and Wales, Scotland and Ireland, a workhouse was a place people unable to support themselves could go to live and work.

It is this condition of the labor market, and this eager resort to machinery wherever it can be applied, to which, under the guidance of superior education and intelligence, the remarkable prosperity of the United States is due.

[144] During the New Deal, over three million unemployed young men were taken out of their homes and placed for six months into more than 2600 work camps managed by the Civilian Conservation Corps.

Although the monetarist economic policies of Margaret Thatcher's Conservative government saw inflation reduced after 1979, unemployment soared in the early 1980s and in 1982, it exceeded 3,000,000, a level that had not been seen for some 50 years.

[169][170] A 26 April 2005 Asia Times article noted, "In regional giant South Africa, some 300,000 textile workers have lost their jobs in the past two years due to the influx of Chinese goods".