In accordance with the standards of the International Labor Organization (ILO), unemployed citizens can include persons at the age that is set to measure the economic activity of the population. These persons must meet the following conditions:
- do not have a job (occupation that generates income);
- engage in job search, i.e. apply to the state (private) employment service, use or place advertisements in the press, directly contact the administration of enterprises (employers), use personal connections or take steps to create their own business;
- be ready to start work during the survey week.
Also, students, pensioners and the disabled are counted as unemployed if these persons have been looking for work and are ready to start it.
The unemployment rate is the ratio of the number of unemployed in the relevant age group to the economically active population (of a certain age group). This indicator is calculated as a percentage.
Unemployment rate formula
The unemployment rate formula is calculated as the ratio of the share of the unemployed to the total labor force (%):
u=U/L * 100%
Here u is the unemployment rate,
U is the number of unemployed,
L is the number of employed and unemployed (labor force)
Types of unemployment
There are several types of unemployment, for each of which the calculation of the unemployment rate formula has its own characteristics:
- Structural unemployment, which is the most massive, since its presence is associated with constant changes in market demand for a product (if demand falls, then the need for specialists will decrease). The unemployment rate formula for structural unemployment looks like this:
UBstr \u003d Qstr / HR * 100%
Here UBstr is the level of structural unemployment,
Qstr - the number of structural unemployed;
- Frictional unemployment, which characterizes the unemployment of citizens who have a certain qualification. This type occurs when certain enterprises are closed, the decline in production capacity. The unemployment rate formula for this type is:
UBfr \u003d Q / HR * 100%
Here UBfr is the level of frictional unemployment,
Qfr - the number of frictional unemployed;
NRV - the number of employed and unemployed (labor force).
- Seasonal unemployment associated with work that is seasonal. Unemployment Rate Formula for Seasonal Unemployment:
UBset = Q / HR * 100%
Here UBSec is the seasonal unemployment rate,
Qsez - the number of seasonal unemployed;
NRV - the number of employed and unemployed (labor force).
- Cyclical unemployment associated with economic cycles that are constantly taking place in different countries. At the time of the decline in GDP, cyclical unemployment begins, which is characterized by the level of unemployed labor due to a temporary reduction in production capacity and their release from the production process. Formula for the cyclical unemployment rate:
UB cycle = Q / HR * 100%
Here UBtsik is the level of cyclical unemployment,
Qcycle is the number of cyclical unemployed;
NRV - the number of employed and unemployed (labor force).
Other unemployment indicators
In order to carry out a deeper analysis of unemployment, it is not enough to know the methods of calculation for the corresponding types of unemployment.
The concept of the natural rate of unemployment is often used. Unemployment rate formula:
UBest \u003d UB str + UB fr
Here UBest is the natural rate of unemployment,
UB str is the level of structural unemployment,
UBFR is the level of frictional unemployment.
Examples of problem solving
EXAMPLE 1
Unemployment is a widespread phenomenon. There is not a single place in the world where this phenomenon does not occur.
It affects all spheres of human life, provoking changes in production.
The calculation of the unemployment rate is carried out by analyzing the ratio of the number of citizens who are unable to get a job, while being able to work, to the number of employed persons. Within the Russian Federation, the number of unemployed, since 2014, has been steadily growing.
Fundamentals of unemployment - concept, analysis, accounting
The economic development of the country, in part, is expressed in the unemployment rate. It is a socio-economic phenomenon in which the active part of the population cannot find a job, is recognized as if "superfluous", among the main labor mass.
The International Labor Organization has defined the unemployed. Thus, a person who does not have a permanent job is recognized as unemployed, is in search of work and can readily start it. It is very important that this person was officially registered in the unemployment fund.
It is noteworthy that the number of unemployed in each period varies depending on the change in the cycle and the rate of economic growth, on how much the labor productivity index has increased or decreased, as well as on the level of the skill structure and the demand for labor.
Evaluation of indicators, which exert an influencing pressure on the unemployment rate, is produced by:
- Calculation of the employment rate of the population.
- Definitions of the unemployment rate.
- Conclusion of the percentage of natural unemployment.
The first coefficient determines the specific number of the adult population that is directly employed in the production process on a national scale. The second indicator is the number of unemployed as a percentage of the number of workers. The last indicator is the percentage ratio between the unemployed and the workers at the moment of economic prosperity.
It is important to understand that the rate of unemployment or its rate, may change constantly due to the influence of production. Depending on the cycle, namely, the growth or recession of the economy and the volatility of production, technical progress, depending on the qualifications of employees, the professionalism of hired personnel. If the trend of the unemployment rate falls down, then there is an expansion and rise in production, otherwise, there is an increase in the indicator. Moreover, the dynamics of GNP and unemployment are inextricably linked.
Unemployment can considered in these aspects:
- Forced.
- Registered.
- marginal.
- Unstable.
- Technological.
- Structural.
At forced or voluntary unemployment, as a rule, the worker himself seeks to work at a certain level of wages and certain conditions, but cannot get a job. Or the employee does not want to work on conditions of low wages (voluntary unemployment). The second option tends to increase during an economic boom, or vice versa - it decreases during its recession. The scale and duration of this type of unemployment depend on the professionalism and qualifications of workers, on the socio-demographic group of the population.
At registered unemployment part of the unemployed population is looking for work and is registered with the employment fund.
marginal unemployment characterized by the lack of work among the weakly protected segment of the population and in the social lower classes.
At unstable varieties of unemployment, the decisive factor will be a temporary problem associated with stopping the growth of production.
Hidden the type of unemployment is not officially recognized unemployment, but seasonal, one that occurs only in certain sectors of the economy, as workers are needed in such production.
There is also technological unemployment, which is caused by the adjustment of the production process through the use of the mechanism. With this type of unemployment, as a rule, productivity increases there, but less costs are required to improve the skills of employees.
There is a type of unemployment institutional . This type can be characterized as a combination of trade union or state intervention in the establishment of wages, which should be formed on the basis of market demand.
Unemployment may occur Consequently:
- Apply measures to improve the economic structure. This implies the manifestation and implementation of equipment that entails job cuts. That is, "machine" production displaces human labor.
- Fluctuations for a certain season. This means that the level of a certain production has a place to increase or decrease, depending on the season, in each individual industry.
- The cyclical nature of the economy. During an economic recession or crisis, the need for the use of human resources may decrease.
- Changes in the demographic picture. The growth of the working population in this case leads to the fact that with an increase it entails a proportional decrease in the need for labor.
- Political influence on the sphere of wages.
The emergence of such a socio-economic condition as unemployment inevitably entails such consequences:
- Economic changes.
- Non-economic changes.
The first case entails:
- reduction of federal budget financing revenues by minimizing tax revenues - ;
- costs are rising as a public burden on funding and disbursements, . Retraining of workers, etc.;
- the standard of living goes down. In particular, people who have lost their jobs lose their wealth, respectively, their quality of life becomes lower;
- output is reduced due to the fact that there is a backlog of actual GDP from potential.
Non-economic changes mean an increase in the criminal situation in the country, an increase in stress in society, as well as provoking social and political unrest.
, according to the methodology of the International Labor Organization, the unemployment rate is calculated by dividing the number of unemployed by the number of the active population.
Official statistics
Statistical observation is based on a thorough analysis of the dynamics of the indicator over the years and months. Statistical observation has confirmed official data. The basis of these data is the published information of Rosgosstat.
As of January 2019, the number of unemployed in the country amounted to about 800 thousand people. At the same time, the Ministry of Labor and Social Protection of the Russian Federation predicts that the number of officially unemployed in 2019 will grow by almost 40% and reach 1.1 million Russians.
If we consider the situation in individual regions, it should be noted that in Moscow lowest unemployment rate- 1.3%, relative to Ingushetia, in which the figure was 26.2%.
Estimated unemployment rate on years allows us to say that since 2011 the indicator has become lower. So, at the beginning of 2011, this level was fixed at a value of 7.8%. In 2014 and 2015, the unemployment rate tended to rise due to massive layoffs.
Starting from the last months of 2013, in the first half of 2014, the unemployment rate stubbornly held on to one place, then a gradual decrease in the unemployment rate began until mid-summer 2014. By the end of 2014, the unemployment rate began to reach 5.3%, by 2015 this level was fixed at 5.8%.
On average, the unemployment rate in Russia has been gradually decreasing since 2011. So at the beginning of 2000, the indicator was 10.6%, then by 2001 it dropped to 9%, the following years it had the following expression - 2002 - 7.9%, 2003 - 8.2%, 2004 - 7.8%, 2005 - 7.1%, 2006 - 7.1%, from 2007 to 2008 the unemployment rate fell to 6%, in 2009-2010 - the level was 8.2%, and since 2011 the level has gradually decreased.
Statistics for this indicator are presented in the following video:
Hidden unemployment and its level
With the development of an economic phenomenon that involves the preservation of the workplace for a specific person, while maintaining formal relationships with the employer, but not giving him the opportunity to actually be employed in production, there appears hidden unemployment. As a rule, it occurs in times of crisis, when the actual labor force is not a necessity.
As a rule, the hidden unemployment rate does not exceed the range of 7 to 10 million people. This indicator tends to steadily increase.
Social protection of unemployed citizens and promising areas of work
Citizens who have actually experienced such an economic phenomenon can take advantage of receiving assistance from the state emergency service, have the right to take part in certain types of work, receive material assistance in the form of unemployment benefits, and so on.
During the crisis, during the growing number of unemployed, IT programming employees are valued more than ever. It is important to note that this particular field of activity is in demand at all times, since the development of technical progress and the design of various systems are valuable not only in the vastness of the country, but throughout the world.
Developers based on Android and iOS are no less popular. Following them in popularity are specialists in the field of transport logistics, car service, middle managers in sales, cashiers and workers. Among the latter are loaders, nurses, turners and farmers, postmen. Among the professions that are becoming unclaimed, as a rule, accountants, cooks, drivers and property managers are singled out.
Reasons and prospects
Theories of the development of unemployment There are many, but they can be summarized in three main ones:
Regardless of the reason for the appearance, the very essence of unemployment is a disaster, since the country, in macroeconomic terms, bears a huge burden, both economic and social. In addition to the fact that the instability of the population of the psychological and social aspects is developing, there are problems of a political nature. After all, the population yearns for constructive decisions and action on the part of the authorities. Moreover, without having a permanent and stable source of income, a person resorts to breaking the law. This means that social tension is increasing, the crime situation is increasing, and so on. The country receives less GDP production.
WITH unemployment can only be fought in a complex by taking a variety of measures. In particular:
- Creation of institutions that will provide assistance in retraining and retraining, improvement of existing ones.
- Establishing the process of providing information to the public about vacancies.
- Implementation of a policy to prevent the development of unemployment.
The rules for calculating the unemployment rate are set out in the following video:
If the actual unemployment rate is above the natural rate, the economy is in recession, and if the actual rate is below the natural rate, then inflation is expected to rise significantly (because the economy is overheating).
So what is the natural rate of unemployment and why is it not equal to zero? The natural rate of unemployment. natural rate of unemploymentis the unemployment rate that corresponds to potential GDP or, equivalently, long-term aggregate demand. In other words, the natural rate of unemployment is the rate of unemployment when the economy neither overheats nor falls into recession - the combination of frictional and structural unemployment.
For this reason, the natural rate of unemployment is the rate, where cyclical unemployment is zero. Note, however, that this does not mean that the natural rate of unemployment is zero, as there is frictional and structural unemployment.
How is natural unemployment calculated?
The overall unemployment rate is calculated by dividing the total number of unemployed people (U) by the total number of people in the labor force (LF). The labor force consists of adults of working age who want to work.
U ÷ LF = General unemployment rate
(FU + SU) ÷ LF = Natural Unemployment Rate
To calculate the natural rate, first add the frictional unemployed (FU) to the structural unemployed (SU) and then divide that number by the total labor force.
Types of unemployment
There are 3 types of unemployment:
Structural unemployment
frictional unemployment
Cyclical unemployment
The first two together are“ natural” , and the latter is the factor that causes inflation to either accelerate or slow down.
1. Structural unemployment Unemployment is unemployment that is caused by minimum wage regulation, unionization, mismatch between workers' skills and employers' needs, or social benefits. The reason why this unemployment is considered“ natural” is that, that these barriers will always exist. For example, consider the minimum wage. The minimum wage set the price of labor above value. So firms decide not to hire workers. The situation will not change in the long term.
2. Frictional unemployment is unemployment resulting from job changes, moving, finding a suitable position. Usually this is not a negative phenomenon, since this factor has a temporary significance. However, since there is always a certain proportion of the labor market looking for a new job, this unemployment will persist in the long run.
The natural rate of unemployment in the United States
Source: Fed
3. Cyclical unemployment is unemployment that is not part of the natural rate of unemployment. It is driven by a cycle of growth and decline., that is, either short-term fluctuations in aggregate demand or supply. In the long run, its equilibrium value tends to zero.
Cyclical unemployment occurs during a downturn in the business cycle when demand for goods and services declines and companies respond by cutting production and laying off workers. During an economic downturn, the number of workers exceeds the number of available jobs. The result is unemployment.
Economists use the cyclical unemployment rate to assess the health of the entire economy or its individual sectors. Cyclical unemployment can be short-term, lasting a few weeks for some people, or long term. It all depends on the extent of the economic downturn and which industries are most affected. Central bank economists typically focus on addressing the root causes of economic downturns rather than correcting cyclical unemployment.
With high cyclical unemployment, we are in a situation of imbalance. And when the economy is in disequilibrium, it will eventually return to equilibrium.. As this happens, the price level will change, and a change in the price level will lead to inflation. Thus, inflation will accelerate to equilibrium.
Thus, since frictional and structural unemployment will always exist, there will always be a natural rate of unemployment.
conclusions
A long-term stable unemployment rate, which is characterized by a stable healthy change in wages and inflation. Attempts to shift the economy to a lower unemployment rate (than its natural rate) through fiscal policy or monetary easing will be unsuccessful, as market expectations from this kind of stimulus will lead to faster inflation and wage growth. And an excessively high level of inflation is unfavorable for the Central Bank. Therefore, subsequently the regulator will have to take inflation under control by tightening monetary policy or reducing government spending, which will bring the unemployment rate to its previous natural level.
The natural rate of unemployment may change in response to changes in the structure of the labor force. On a graph, the natural rate of unemployment is usually marked by a vertical Phillips curve.
Unemployment rate is a quantitative indicator that provides an opportunity to compare unemployment for different populations (for example, for different stages of the same state, for different countries).
How is the unemployment rate calculated?
The above quantitative indicator is the ratio of the population of a certain age group that is unemployed to the economically active population of the corresponding age. The unemployment rate is defined as a percentage. In the total labor force, the unemployment rate reflects the share of the unemployed
u = (U (number of unemployed) / L (labor force, which includes both employed and unemployed population) *100%
To date, two methods are used to measure the number of unemployed:
- according to the methodology of the Federal Employment Service (the population without work is considered here as able-bodied people who do not have earnings, but stubbornly seek it, and are registered as such in the relevant authorities);
- according to the methodology of the International Labor Organization (the unemployed here act as people in whom there is no work, but they are suitable for work at the moment and, in addition, are actively looking for it).
Experts note that the unemployment rate is not affected by the number of pensioners, full-time students, the disabled, and people who are employed part-time. These categories of the population do not belong to the unemployed.
If unemployment reaches an extremely high level, then this is a sign of high labor efficiency. In addition, a too high unemployment rate can be a serious danger to the country's economic recovery, since it promotes accumulation rather than consumption.
In addition, this indicator affects the decisions made by the central banking institutions of European countries and their politicians. It should be noted that the unemployment rate in Europe is usually quite high. In the United States, data on the above indicator is published simultaneously with information on the number of new jobs that are created in non-economic sectors of the economy. In the Eurozone, information about the unemployment rate is provided to the population every 10 days, in Japan - monthly (usually in the last days).
Experts note that the above indicator greatly affects. The unemployment rate is usually carefully analyzed in conjunction with the data of the indicator of the number of new jobs that are created in non-economic sectors of the economy. The growth of the latter, if the unemployment rate increases, shows that in the non-economic sectors of the economy there are more and more people who are unemployed. With the expectation of an increase in interest rates, a decrease in the above indicator contributes to the strengthening of the dollar.
Unemployment statistics by years in Russia
In 1990, the Russian Federation experienced a minimum level of unemployment. It was only 5.2%.
The maximum value of the above indicator was observed during the economic crisis in 1998. The unemployment rate was 13.2%.
Experts note that by the end of 2007 there was a slight decrease in this quantitative indicator to 6.1%. But the very next year there was an increase in the unemployment rate in the country to 6.8%.
According to experts, the problem of lack of work is most acute not in large cities, but at the local level. The level of unemployment is quite high in medium and small towns, where light industry is mainly concentrated and, in the mining settlements of the Far North, at the unfinished construction sites of large enterprises. This indicator affects the overall unemployment rate in the country.
Unemployment rate in the world today
A very high unemployment rate for 2015 is observed today in Spain. This figure is about 23.2%. The share of the economically active population in this country is only 37% (for comparison, in the Russian Federation - 53.00%, In the United States - 63.0%.
In Germany, the unemployment rate is only 4.8%, and in France - 10.6%.
Experts note that in this regard, very good indicators in the United States. Already at the end of 2014, the unemployment rate dropped to 5.9%. According to the US Bureau of Statistics, the above figure has reached its pre-crisis low of 200.
What is the natural rate of unemployment?
The above indicator is an economic hypothesis, which says that for the general economic equilibrium (at a certain real wage) there is a specific underemployment of the population. The latter is the result of a lack of reliable information, demographic changes, and mobility barriers. Therefore, the unemployment rate cannot be reduced to zero. It can only be lowered to the mark, which is determined by the imperfection of the market.
Experts note that it is impossible to influence the level of such unemployment within a narrow time frame. In this situation, only a slow impact with the help of special methods of structural and regular policy will help. Eg:
- the development of technologies that facilitate the search for work;
- the introduction of the so-called effective salary, which exceeds the market wage;
- organization of trade unions;
- introduction of a minimum wage.
According to M. Friedman's theory, natural unemployment is specific to each individual economy in accordance with macroeconomic equilibrium. In the case of the latter, the rate of inflation is expected to be equal to the actual rate. The Phillips Curve is an attempt to describe the relationship between unemployment and inflation. However, Phillips and Friedman deny the existence of a direct relationship between these quantities over a wide time frame. They argue that the rate of inflation depends solely on the money supply. The unemployment rate mainly tends to the rate of natural unemployment.
The natural rate of unemployment is described by specialists as “full employment”. But the opinion that unemployment in this case is equal to zero is erroneous.
The natural rate of unemployment, according to experts, is a state of the economy in which there is structural and frictional unemployment, but no cyclical.
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