Economics Essay

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8. UNEMPLOYMENT 8.1 Introduction * Unemployment is a major cost to an economy because it results in the opportunity cost of lost production, as well as increased social welfare payments and a loss of taxation revenue. * Australia has a lower rate of unemployment than most industrialized economies, reflecting its sustained economic growth over the past two decades 8.2 Measuring the level of unemployment The labour force The labour force can be defined as that section of the population15 years of age and above who are either working or actively seeking work. Therefore, the labour force consists of: * Persons aged 15 and over who are currently employed for at least one hour per week and paid work. * Self-employed persons working for at least one hour per week in their own business or a family business. * Unemployed persons aged 15 years and over, who are currently available for work and are actively seeking work. The labour force participation rate In Australia, anyone over the age of 15 can participate in the labour force and is therefore considered to be a member of the working age population. * The labour force participation rate can be defined as the percentage of the working age population- those aged 15 years and over- who are in the labour force I.e. either working or actively seeking work: Labour force participation rate (%) = Labour force x 100 Working age population Unemployment Unemployment refers to a situation where individuals want to work but are unable to find a job. To be classified as actively seeking for work, a person without a job must satisfy an one of a number of criteria such as: * Regularly checking advertisements * Being willing to respond to job advertisements * Registering with an employment agency To determine the rate of unemployment in

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