The Consequences of Job Lacking

In our article, we define the danger of job absence and its results for the social and economy life.

The Results of High Rate of Unemployed People

For future writers of essays, it is very significant to know that joblessness is an essential tool for the labor market. Its functions are to preserve part of the workforce, to ensure sectoral and spatial motion of capital and labor in the various periods of business activity; to promote fruitful employment and competitive ability of the workforce; to provide possibilities in order to change activity for working people and so on. Research on this can easily be done by for you in case you decide to get custom essay. Meanwhile, take a look at the following general info.

On the one side, joblessness is used to be a significant stimulant of activity of the working population. On the other side, it is a great public calamity. The specialists of the International Labor Organization predict that in a few years the world’s level of joblessness will reach in average 10% and all countries will not have a possibility to eliminate it completely.

Socio-Economic Consequences

Simultaneously, a joblessness creates not very positive social influences and economic outcomes, which include:

  • Underutilization of the economic potential of society and the workforce;
  • Underproduction of GDP, lagging of its actual rate from potential one;
  • Loss of professional skills, self-esteem, moral degradation of ones having jobs;
  • Reducing (decreasing) of earnings, deterioration of living conditions;
  • The increasing quantity of nervous and mental disorders and committed suicides;
  • Social shocks, increasing amount of crimes, breakup of families;
  • The need for additional social costs (expenses) related to the support for the unemployed.

Results for Various Categories of Workmen
Joblessness has unequal outcomes for different categories of workers. Yes, the level of absence of employment among administrative personnel is lower than among blue-collar positions’ holders. The first ones are also less fired during the downturn than the last ones. Enterprises are less likely to fire skilled personnel because they have spent some money on their training.

There is a significantly higher level of joblessness among young people compared to grown-up people. In some countries, there is a discrimination against women, certain nationalities, and races.

Cyclical Joblessness Results
The cyclical joblessness also has the profound social results. The depression condemns a lot of people to inactivity. That leads to the loss of professional skills, loss of self-esteem, the decay of moral values, the breakup of families, as well as to the social and political riots.

Mass Joblessness Consequences

Additionally, mass unemployment leads to fast and sometimes very violent social and political modifications. A sample of these significant turns is Hitler’s rise to power under the circumstances of absence of employment. Joblessness has a direct connection with the increasing amount of suicides, murders, and deaths from cardiovascular diseases, mental illnesses and so on.

As a conclusion, it is possible to mention that because of the not positive socio-economic results of job lacking, there is the need to realize the state employment policy and to form the relevant labor market institutions.

The Causes of Joblessness on the Economy

There is no need for us to measure the consequences of absence of employment on the economy only from the negative side. Joblessness has constructive and destructive functions.

The constructive impact of joblessness on the economy

The destructive influence of joblessness on the economy

Contributing the effective business and rivalry on the labor market.


The adapting of employees to the requirements of the labor market.


Affording mobility of resources in time and space. Reservation of labor force in different in order to use them later.


The free will of the employee on a break in economic activity on the purpose of work changing, etc.


Natural regulation of supply and demand of labor in the territorial, sectoral, occupational and qualifying aspects.

Each percentage, which surpassed the actual level of joblessness over the natural one, reduces GDP by 2.5%. Decreasing of earnings and tangibles of society.


Expansion amounts of negative psychological tendencies in society.


Disturbing the public peace.


From the information, which was said above, we can conclude that the economy undergoes mainly constructive impact because it works in the conditions of the natural level of joblessness. Moreover, the joblessness degree mainly has disastrous consequences on the economy that surpasses the natural rate.

Okun’s Law

The first attempt due to mathematical calculations to find out the impact of absence of employment on the gross national product volume of the country was made by the American scientist Arthur Melvin Okun. He brought the law according to which the annual increase in real GDP by 2.7% maintains joblessness rate on the constant level. Any additional two percent of real GDP growth decreases the joblessness rate by one percentage point. Similarly, each additional decrease in GNP growth by two percentage points causes a growth of joblessness rate by one percent.

This law implies that a certain amount of GDP growth is needed in order to avoid the possibility of joblessness rising. Within the expansion of working population and work productivity, it is needed 2.5-3% of annual growth in real GDP for job places creation, which is able to keep joblessness at a certain level.

American researcher Arthur Melvin Okun proved the existence of the connection between joblessness rate and changes in GDP volume. In accordance with the Okun’s law, the raise of actual joblessness rate above its natural rate by 1% leads to GDP reducing by 2.5% compared to its potential level.

This relationship between joblessness rate and GDP volume makes it possible for us to calculate the absolute loss of manufacture associated with any joblessness level.

For those who are going to write an essay, it is very important to note that the actual volume of national product can sometimes exceed the amount of potential volume. In such case, additional changes of workers are involved in the production, capital equipment is used in excess of the standards, and overtime work and moonlighting become commonplace, etc.

Okun’s Law gives possibilities to determine the normal joblessness level, which was said above, increases due to the development of the market economy. So, the natural joblessness rate in the US was determined by 4% in the 60s and 6-7% in the 80s. In other countries, it may be lower because of decreased salary and mobility of labor market.


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