THE CONCEPT OF UNEMPLOYMENT AND SELF EMPLOYMENT

CONTENT

1. Unemployment
2. Self Employment

Unemployment

Definition of Unemployment

It is defined as a situation in which persons of working age, able and willing to work are unable to find paid employment. Unemployment is the stock of all those individuals who are not engaged in any productive activity and who are either unable to find work at the prevailing real wage or which are in the process of switching to a new job.

Unemployment rate = Number of unemployed persons / Total number of working population × 100/1

Example: A country has a working population or labour force of ₦4.8 million of which ₦3.6 million people are employed, calculate the unemployment rate of the country.

Solution:

Labour force = 4.8 million

No of employed = 3.6 million

No of unemployed = 4.8m – 3.6m = 1.2m

Unemployment rate = Number of unemployed persons / Total number of working population × 100/1

= \(\frac{1.2m}{4.8m} × \frac{100}{1}\)

= 25%

Types of Unemployment

The following are the types of unemployment:

1. Frictional Unemployment: People are unemployed because they have no information of employment opportunities elsewhere.