Economics Unemployment as a Constructive Term Paper

Download this Term Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Term Paper:

This negative motivation technique was mostly used in the 1930's, while nowadays it is rarely used.

Another advantage of unemployment is that it helps limiting an accelerated growth of the Gross Domestic Product (GDP) that cannot be supported for extremely long periods of time because of the resource constraints and environmental impacts also. If the employment rate is high, human resources are not used at their best capacity, which leads to wasting opportunities to produce goods and services, causing problems for the economy on a long-term.

Unemployment also encourages certain people to start their own business. Most of these people are former employees previously trapped in dead-end jobs with no future, that after being fired from their jobs found the courage and the motivation so start a business of their own. This way, many little companies are coming along quite nicely. These small companies create labor demand that is satisfied by unemployed workers, therefore diminishing the unemployment rate on a medium term.

Unemployment determines a better prepared labor supply. Inactive professional periods determine unemployed people to take certain classes to qualify for another job, unemployment providing them the time and motivation for taking classes to improve their professional skills. On a long-term, the labor market will enrich itself with highly trained professionals.

Unemployment may also be responsible for the migration of unemployed population to under populated areas, where the work supply is very low. This creates a balanced population distribution on a territory, influencing in a positive way the economic life of certain regions.

The natural functioning of the labor market can only be attained with natural unemployment, whose rate corresponds to full employment. Therefore, the rate of natural unemployment ensures macroeconomic balance.

Each unemployment type affects the economy in a different way and has a different impact. Cyclical unemployment appears when there is not enough aggregate demand for the labor. This causes professional reorientation. Workers found in this situation will change their professional profile by orienting towards other jobs for which the labor market is not saturated, therefore satisfying the labor demand in other professional areas.

Frictional unemployment involves people being temporarily between jobs. It is also referred to as search unemployment, since people involved in it are searching for a new job. In some situations is considered to be constructive, because it helps both workers to find the exact job that best fits their qualifications, skills, abilities and needs, and employers to find the best suitable candidates.

Marxian unemployment is when unemployment threat is used to determine employees to work hard and to have low wage expectance.

All in all, unemployment is generally a negative phenomenon that causes important problems for any economy, but a low level of unemployment may be considered constructive, as it presents certain advantages. A low rate of unemployment helps reduce or decelerate inflation, it encourages labor productivity and profitability. Another important positive aspect is that it helps limiting an accelerating growth of the Gross Domestic Product. If kept under control at a certain low level, unemployment can help a nation's economy and contribute to its health. In every healthy and balanced national economy unemployment exists, but it is kept at a low rate. Low unemployment rate also has certain advantages on a social level.

Reference List

Labor Force Statistics from the Current Population Survey (2006). U.S. Department of Labor. Bureau of Labor Statistics. Retrieved January 11, 2007 at

U.S.: Low Unemployment Raises an Old Inflation Debate (2006). Business Week online. Retrieved January 12, 2007 at

Rebitzer, James B. Unemployment, Labor Relations, and Unit Labor Costs (1988). The American Economic Review. Vol. 78. No. 2. Retrieved January 11, 2007 at

Labor Force Statistics from the Current Population Survey (2006). U.S. Department of Labor. Bureau of Labor Statistics. Retrieved January 11, 2007 at

U.S.: Low Unemployment Raises an Old Inflation Debate (2006). BusinessWeek online. Retrieved January 12, 2007 at

Rebitzer, James B. Unemployment, Labor Relations, and Unit Labor Costs (1988). The American Economic Review. Vol. 78, No. 2. Retrieved January 11, 2007 at[continue]

Cite This Term Paper:

"Economics Unemployment As A Constructive" (2007, January 12) Retrieved December 7, 2016, from

"Economics Unemployment As A Constructive" 12 January 2007. Web.7 December. 2016. <>

"Economics Unemployment As A Constructive", 12 January 2007, Accessed.7 December. 2016,

Other Documents Pertaining To This Topic

  • Economic Development and Trade in an Era

    Economic Development and Trade In an era of increased globalization and advancements in technology, it has become increasingly important for all of the nations of the world to keep bringing improvements in their economic infrastructure and to expand their businesses on the global scale. It has been observed that without a reasonable level of economic development any country cannot gain a competitive position in the world market. This is the dilemma

  • Economics Finance MBA Level

    Disrupting America's economic system is a fundamental objective of terrorists Even as the world continues to struggle with the terrible shock from the September 11 attacks in New York and Washington, one principle lesson has already become clear: disrupting our economic system is a fundamental objective of terrorists. Prior to September 11, our economic environment was certainly not immune to terror, in comparison to many other nations; we lived relatively terror-free. Now,

  • Unemployment and Tax Reform on Our Social

    unemployment and tax reform on our social structure including theoretical framework on functionalism, social conflict and symbolic framework and so on and so forth. The Works Cited eight sources in MLA format. Unemployment Unemployment has long been the cause of ruin of the American society as well as the global social structure. Persistence in unemployment and the related tax reforms have done much harm than have benefited the mankind on this

  • Economic of South Korea the

    A key factor that has prompted South Korea's growth has been its strong export emphasis where growth of exports climbed 21% each year (3). The policy makers of South Korea have emphasized on skilled and high quality industries such as the motor vehicle industry and electronics manufactures. This has made South Korea currently to have the sixth largest motor vehicle industry in the world. The country is also now the

  • Inflation Unemployment and Phillips Curve

    2.5. Limitations of the study At the level of the limitations, these refer to the usage of secondary information, as opposed to the collection of primary data through the direct analysis of the Chinese market. This limitation is nevertheless addressed through the integration of multiple sources of valid and verifiable information, leading as such to the creation of solid, relevant and reliable findings. The second limitation is one common to all research

  • Domestic Macroeconomic Issue Economic Growth and Development

    Domestic Macroeconomic Issue Economic Growth and Development Macroeconomic stability does not single-handedly assure high rates of economic growth. Factors such as unemployment, inflation, national income, and economic growth and development are the most important determinants of economic prosperity at the macro level (Driessen 2001 p. 40). Economic growth and development is one of the macroeconomic issues with considerable impact on the overall GDP of an economy. A country attains economic growth when

  • Government Subsidized Student Loans Have Economic Costs

    Government Subsidized Student Loans Have Economic Costs but Political Benefits Higher education has become increasingly important in the contemporary world scenario today where globalization has led to a higher need for a skilled labor force that is mobile and that is well-versed in the academic disciplines followed all over the world. In fact university education is starting to be seen as a hallmark for success, even though there are college drop

Read Full Term Paper
Copyright 2016 . All Rights Reserved