The natural rate of unemployment

Employment is a very important figure in macroeconomics.It is understood as the number of working-age adults (16 and older), having a job.Unfortunately, not all of the adult working-age population has a job, there are the unemployed citizens.Unemployment in the market economy, characterized by the number of adult working-age population that has no job but are actively looking for it.The total number of unemployed and employed people - is labor.

Calculation of unemployment carried out by means of different indicators, but common, includingand the International Labor Organization, the unemployment rate is considered.

unemployment in a market economy is a socio-economic phenomenon, in which a certain proportion of the labor force is not used in the production of goods and services.At the same time under the labor force means the number of employed and unemployed.

are the following types of unemployment:

  • Friction
  • Structural
  • Institutional
  • Cyclic
  • Seasonal

unemployment arising from the inve

stment of time required to find a new job, refers to the frictional unemployment.Its duration may be the time period from 1 month to 3.

Frictional unemployment occurs as a consequence of the dynamic development of the labor market.Some workers voluntarily decided to change jobs, finding, for example, higher paying or more interesting job.Another part of the workers are actively looking for work because of the dismissal of existing jobs.The third part of workers just entering the labor on the labor market for the first time, or leave it due to the natural movement of the inactive population category, from an economic point of view, the opposite category.

unemployment associated with the technological changes occurring in production and changes the structure of the demand for workers - structural unemployment.It occurs when an employee who was fired from the same industry, can not find work in another industry.

Structural unemployment occurs when the territorial and sectoral structure of labor demand.Over time, production technology and in the structure of consumer demand substantial changes occur that cause changes in the structure of total demand for labor.If the demand for labor in a particular profession or a particular region falls, the result is unemployment.Workers released from production, are not able to quickly change the qualification and profession or to change their place of residence, therefore forced for a time to be unemployed.

Economists generally do not clearly distinguish between structural and frictional unemployment, as in this and in another case, the dismissed workers are actively looking for a new job.

It should be noted that these types of unemployment in the economy there permanently, because they fully reduced to zero or impossible to destroy.People will look for a new job, aiming for the financial well-being, and the company, in turn, will seek to recruit the most qualified employees, as this is justified by their desire to maximize profits.That is, in a market economy, the labor market is constantly fluctuating supply and demand indicators.

Since the existence of structural and frictional unemployment is inevitable, economists, their sum is formulated as a natural rate of unemployment

natural rate of unemployment implies a such a level of unemployment, which corresponds to full employment (includes structural and frictional form of unemployment. The causes of the naturalunemployment due to natural bases, such as migration, staff turnover, demographic reasons.

If the economy is marked only natural rate of unemployment, this situation is called full employment.

Causes natural rate of unemployment - the balance of the labor market, where the number of employeesIt is looking like the same as the number of vacant jobs. Therefore, a full-time job meant not 100% absence of unemployment, but only a certain minimum level of unemployment.The natural rate of unemployment to some extent is a positive development.