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What are the personal, economic and social consequences of unemployment?

Question

What are the personal, economic and social consequences of unemployment?

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Step 1

Let us discuss certain concepts related to unemployment:

Labor force: In an economy, labor force refers to the part of the working age population (aged 15-69) that is willing and able to work. It is the sum of employed and unemployed people.

Employed: Those people who belong to the labor force and are working belong to the employed category.

Unemployed: This includes the people who are willing and able to work but do not possess job.

Unemployment: Unemployment refers to the situation where people in the working age population (aged 16-59) are willing and able to work but cannot find work.

Unemployment rate: It is the number of people unemployed as a percentage of labor force. It is calculated using the formula below:

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Step 2

Unemployment rate is a misery for an economy. There are several personal, social and economic costs associated with persistent, long-term and high unemployment rate. Some of them are listed below:

Personal consequences of unemployment:

  1. Financial Stress
  2. Homelessness
  3. Social isolation
  4. Issues and problems with partners
  5. Mental and psychological stress
  6. Alienation of teenagers due to complexes
  7. Family breakdown
  8. Indebtedness
  9. Generations of poverty due to poverty trap
  10. Behavioral issues with children
  11. Social stigma related to economic status
  12. Continuous decline in living standards
  13. Health issues due to lack of healthcare affordability
  14. Decreased confidence levels, etc.
Step 3

Social consequences of unemployment:

  1. Higher crime rates
  2. Generations of poverty due to poverty trap
  3. Societal degradation due to exist...

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