What is unemployment? How to determine the unemployment rate in the country?

For several years in a row, some analysts and economic experts predict the onset of the economic downturn in Russia. Such a state of affairs entails many problems for the average citizen, the main of which is the level of unemployment in the country. An organization such as Rostrud, a federal service under the Ministry of Labor and Social Protection, is studying this issue.

Nevertheless, the unemployment rate can not be considered an absolute measure of the country's unhappiness. It all depends on how the calculations are made. The fact is that not all categories of citizens can be reliably classified as unemployed. Why is it so and how to determine the unemployment rate in the country? Let's take a closer look.

Concepts and definitions

The very term "unemployment" implies a situation where the economically active part of the population is not able to find paid work for itself and thus becomes some kind of burden, an aggravation for the rest of the inhabitants of the state. According to the definition adopted by the International Labor Organization, an unemployed person is a person who wants to work and has such a physical opportunity, but does not find a certain workplace.

In order to correctly calculate all the indicators, first of all, it is necessary to divide the entire population of the country into 2 large groups:

1. Economically inactive (EN) - these are the citizens who can not be considered a labor force for various reasons. These include:

• Students of day schools;
• Pensioners, and the reason for the appointment of retirement benefit does not matter;
• Persons engaged in housekeeping, caring for the sick, children and therefore unable to work;
• People who are disappointed in finding a job and stop trying;
• Just do not want to work or not having such a need.

2. Economically active (EA) - the able-bodied population of a country already having a job or finding it in an active search for it. This part is also further divided into two further categories:

• Employed persons are citizens (regardless of age), employed and paid for their work, as well as those who work for the benefit of, for example, the family business, and do not receive payment;
• Unemployed (B) - part of the able-bodied population, which has no occupation for which it receives income; In the case of a job offer, it is ready to proceed immediately; Is actively searching (sends out a resume, addresses the employment center or acquaintances, visits job fairs, etc.); Undergoes training (retraining) in the direction of the employment service.

In general, it can be said that the unemployment rate in the country is defined as the ratio of the last category we considered to the total number of EAs (economically active population). But we'll talk about this a little later.

Factors affecting the level of unemployment

Before determining the level of unemployment in the country, it is worthwhile to talk about what affects this indicator. The unemployment rate in the country is affected by a huge number of factors, among which there are several main ones:

• The rate of growth or decline in the economy;
• Demographic indicators;
• Labor productivity;
• The desire of the population to change jobs or change jobs;
• Socially significant causes: lack of education, pregnancy, alcohol or drug dependence, etc .;
• The level of demand and supply for a particular type of employment.

More detailed analysis of these factors, we can distinguish several different types of unemployment.

How does it happen?

Anyone who wants to know how to determine the unemployment rate in the country should understand that this phenomenon can have different indicators depending on its kind. Unemployment can be:

• Voluntary. This kind is due to the fact that some people do not want to work under certain conditions, for example, in cases where wages are declining. Also in economic theory there is such a thing as a "trap of unemployment". This phenomenon occurs when, for various reasons, the income level of a person practically does not change, regardless of whether it works or not. For example, when the amount of the allowance paid by the state is almost equal to the proposed salary. In this situation, the person has no incentive to work.
• Forced. Characterized by the fact that a person who has a desire to get a job and who agrees with the level of wages, simply can not find a job. This happens when the real wage exceeds that which contributes to the equilibrium state of supply and demand. This leads to the fact that proposals begin to exceed demand.

Forced unemployment can be divided into 3 more types:

• Technological occurs in the case when mechanization (automation) of production leads to a surplus of employees or their insufficient qualification;
• Seasonal is characteristic for some industries in which production is periodic;
• Cyclical is characterized by recurring recessions in a single region or in the whole country.

More about the types

Among others, there are several more types:

• Institutional arises with the intervention of trade unions or the state in setting wage rates in violation of the laws of a market economy.
• Structural occurs when the obsolete branches of management are liquidated and new professions that require special qualification are created.
• Frictional is associated with voluntary change of jobs, exit (exit) from (c) maternity leave, change of residence and so on; Is usually of a short-term nature.

There are also 2 types of unemployment: registered and hidden. The first is expressed by the ratio of the unemployed population officially registered with the employment service to the total number of the able-bodied population. The second characterizes the number of persons who have not been registered or engaged only formally, but actually sent on leave at their own expense due to a decrease in production.

The unemployment rate in the country: the formula for calculating

Each of these species has its own methods of calculation, but we will talk about a more general version. The formula for determining the unemployment rate in the country is expressed as the ratio of the total number of unemployed to the number of economically active part of the population. It looks like this:

Vb = (B * 100%) / EA,

Where EA = З + Б (З - employed population, Б - unemployed).

This is how the unemployment rate in the country is determined. Statistics are compiled on the basis of such calculations.

Economic consequences

Anyone who is interested in how to determine the level of unemployment in the country must also know that this phenomenon entails rather serious negative consequences. From an economic point of view, an increase in the unemployment rate leads to an increase in the expenses of the State Employment Fund for the payment of unemployment benefits for registered citizens. The increase in the number of unemployed people forms the loss of the payroll and income tax, which is quite natural: there is no work, there is no salary, and hence there is no one to pay the tax.

Another economic consequence of unemployment can be considered a decrease in the purchasing power of citizens. In connection with the loss of permanent work, people are forced to reduce their spending to a minimum.

The social factor

Among the social problems, one can call the progressive degradation of society. A person who lost his job is deprived not only of his earnings. He loses his qualifications, self-confidence, often falls into depression, which makes further job search difficult. Especially dangerous is the phenomenon in the youth environment, where inadequate experience and professional training significantly reduces the likelihood of employment. In such circumstances, a part of the younger generation may prefer to search for work income earned by unearned, criminal way.

The experience of economically developed countries shows that the market is not able to cope with the problem alone. Here, of course, government intervention, assistance and assistance are required.

Statistics

According to economists, the problem of the lack of a permanent job is more or less local. In large cities, it practically does not feel, while small and medium-sized settlements, so to say on the periphery, the question is quite acute. These indicators negatively affect the unemployment rate in the country.

Statistics show that the lowest unemployment rate is in 1990 and is 5.2%. Apparently, the influence of the Soviet Union, whose command economy partly solved this problem, affected the impact. But the maximum value this indicator reached in 1998 (13.2%).

In fairness, it should be noted that the influence of state policy had a beneficial effect on these indicators, and by 2007 the unemployment rate in the country (statistics confirms this) was reduced to 6.1%. Later, these indicators fluctuated at the level of +/- 1,5-2% and by the end of 2014 amounted to 5,3%.

Forecast for Russia for 2014-2015

And what about today? How has the unemployment rate in the country changed? In Russia, according to experts, recently there has been a steady increase in this phenomenon. This is due to a decrease in the pace and volume of production and, as a result, the reduction of employees. And if in January of this year indicators were fixed at the level of 5.5%, then, according to economists' forecasts, by the end of 2015 the official unemployment rate will skyrocket and amount to 6.4%.

It is noteworthy that monitoring of IMF economists almost completely coincides with the opinion of domestic specialists. The reasons for this situation in the labor market are definitely the crisis in the Eurozone, and, undoubtedly, the political component. Economic sanctions against Russia clearly negatively affect certain sectors of the economy, as well as repelling a huge number of investors. Consolation is the fact that, according to the same IMF, by 2016 the situation will stabilize slightly and the unemployment rate will decrease by as much as half a percent.