Unemployment and Okun's law

Unemployment is unemployment forced labor that arises as a result of constantly punctuated equilibrium between supply and demand in the labor market.There are such modern views it as a voluntary (friction), structural, cyclical, technological, seasonal, and other concealed.

Due to various factors, the level of official unemployment rate does not always correspond to reality, because hidden unemployment (and this category also belong to the villagers crowded areas) on a scale much greater than all the other species.At the same time, official statistics do not take into account the number of unemployed in those citizens who stopped looking for work (do not get registered at the labor exchange), as well as those who do not want to work (such people in the large countries of the developed market of about 1-2 million).For official statistics, these people simply do not exist.All this affects the substantial understatement of unemployment.

The importance of the calculation of the unemployment rate.This a

mount is estimated to determine the amount lost to the national economy Domestic Product in connection with it.For economists, Okun's law expresses the actual backlog of GDP from its potential value.

American scientist A. Oukenu failed to prove the existence of the relationship between the total volume of the product and the level of unemployment.This relationship became known as Okun's law.According to this law, the scope of the national product is inversely proportional to the number of people unemployed in the country.With the growth of unemployment in the 1% of the value of real GDP decreased by at least 2%.Since the natural unemployment is inevitable and is ongoing, to calculate the amount of lag national product only consider excessive unemployment.This latter view, by the way, today is typical for the more developed countries.

To assess the level of natural unemployment rate is usually charged an amount equal to 6% of the total number of able-bodied people.Previously, about 30-35 years ago, he was determined to 3%, which suggests that the increased mobility of the workforce (this leads to an increase in voluntary unemployment) and accelerated the pace of scientific and technical progress (it increases structural unemployment).In our time, the total unemployment rate is generally higher than the natural rate, which, according to Okun's law, leads to the loss of the market of GDP.

At the same time, Okun's law and shows an inverse relationship.Its essence is that, subject to annual increase in the national product by at least 2.7% of the number of unemployed people will be the same and will not exceed natural values.Thus, if the macroeconomic parameters can not overcome the three percent barrier, the unemployment rate in the country is growing.

worth noting that Okun's law is not a strict rule that certainly is done under any circumstances.Rather, it is a trend that has for each country and time period limitations.

Rising unemployment has the following negative consequences: there is underutilization, devaluation of the labor potential of the country, the quality of life deteriorates, increasing pressure on the value of wages, rising costs society to replace the career counseling or rehabilitation professional status, the number of offenses.

main factors influencing the unemployment rate are the following:

- organizational and economic - the state of the labor market infrastructure, change of organizational and legal forms of organizations and enterprises, privatization, structural changes in the economy;

- economic - inflation and prices, the rate of accumulation, the state in which the investment activity, the financial and credit system, and the national production;

- technical and economic - growth rate of STP, the ratio of supply and demand in different areas of the labor market, structural changes in the economy;

- demographics - birth rate, death rate, age and sex structure of the population, life expectancy, direction and volume of migration flows.