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Factors Influencing Unemployment

Decent Essays
According to economists, employment and unemployment results when the supply and demand for human resources or labour is out of balance. Supply and demand are influenced by a range of forces that are the result of the interaction of economic, structural and policy factors.

Economic Factors
Economic factors affect both the supply and demand sides of labour. Demand for goods and services stimulate production which, in turn, generates employment. The resulting demand for workers affects the supply side as more workers are attracted to a vibrant labour market. The market never reaches this ideal state of balance due to a number of factors.

Business cycles ¾ Agreement among economists is rare, but they do agree that market-driven
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The matching of skills in demand with those available is a common and persistent cause of unemployment.

Education and training ¾ Companies continually complain that the literacy levels of the work force do not meet the skill needs of the economy. As Canada shifts to a more knowledge-based economy, the availability of jobs for those without high levels of education will shrink.
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