Macroeconomics

Topic
Group Name

 Mubasher Javed 08031020-006

 H.Hasnat Ahmad 08031020-027
 Sidra Latif 08031020-040
 Amina Javed Mir 08031020-083
 Some Basic Concepts

Labor force
Employment & Unemployment
Unemployment rate
Frictional unemployment
Structural unemployment
Cyclical unemployment
Seasonal unemployment
Frictional Unemployment:
A type on unemployment caused by workers
voluntarily changing jobs and by temporary layoffs;
unemployed workers between jobs.

Cyclical Unemployment:
A type of unemployment caused by insufficient total
spending or by insufficient aggregate demand.
Structural Unemployment:
It is the unemployment of workers whose skills are
not demanded by employers, who lack sufficient skill
to obtain employment, or who cannot easily move to
locations where jobs are available.

Seasonal Unemployment:
It is the type of unemployment which is caused by the
seasonal nature of some industries like agriculture
etc.
Causes of Unemployment
 Higher growth rate of  Lack of technical
population. education
 Technology  Shut down of Industrial
 Business Trends units
 Nationalization of  Inefficient Micro
Business Units Financing Schemes
 Political & Economic  Voluntary
Scenario Unemployment
 Smuggling etc….
Where Problem lies??
Total population= 160 millions (approx.)
Labor force= 51.78 millions
Percentage labor force= 51.78/160
*100=32.3%
Out of 51% population of women only 13.43%
are in labor force.
Out of 49% population of men 52.1% are in
labor force.
So, Pakistan has to increase its labor force to a
great extent.
World Labor Force:

2007-Total Labor Force of The

World= 3140.3509million (approx.)

2008-Total Labor Force of The

World= 3166.66million (approx.)
World Unemployment Rate:
World Unemployment Rate 2007- 5.7%
Unemployed Population 3140.3509*5.7/100=179million
(approx.)

World Unemployment Rate 2008- 6.00%

Unemployed Population 3166.66*6/100=190million (approx.)
World unemployment rate has been
ranging from 5.7%-6.3% over the
last ten years
 WORLDWIDE UNEMPLOYMENT RATE %
25 23.5

20
17.4

15 13

10 8.9
7.1 7.2
4.8 5.2
5 4.2
3.2
2.5

AN
N

IA
A

IA
N

A
A

AY

SI
IN

IC
AI

PA
U
US

ST
W

AY
IN

U
H

R
SP

JA

SA
R

AF

KI
AL
NO

PA
S.

M
Economic and Social Impacts of
Unemployment:
 Okun’s Law:
For every 1% increase in
employment rate GDP falls by 2%....
 When unemployment increases goods and
services produced in a country decreases and
it adversely affects the economy.
 Increased Crime and Social Strife
 Deflationary Pressures
 Decreased Growth
 Low purchasing power of people
 Increased Government Spending
 Investors hesitate to invest where
unemployment rate is high.
Conclusion:
 Unemployment is a heinous problem of
the whole world. Same is the case with
Paksitan with multiple challenges.
Pakistan has to eradicate this economic
and social evils along with all of its
aspects to the maximum extent.