The Consequences of Unemployment

Paper Summary:

This paper argues that a high rate of unemployment has a negative effect on the national economy and greatly affects the living standards of the people. The writer states that, apart from the loss of productivity and the consequent economic downside, unemployment also has negative psychological implications and damaging effects on the family structure.

Outline
1) Introduction
2) Causes of Unemployment
a) The Four Components (Cyclical, Structural, Frictional and Seasonal Components)
b) Increased Productivity
c) Globalization, Outsourcing
3) Unemployment Statistics
a) National Unemployment Rates
b) State Wise Comparison
4) Effects of Unemployment
a) Okun's Law (Relation between GDP and Unemployment)
b) Unemployment and National Debt
5) Unemployment Benefits
a) Unemployment Insurance
b) Extended Benefits (TEUC)
c) Trade Adjustment Assistance (TAA)
d) Personal Reemployment Accounts (PRA)
6) Personal Effects of Unemployment
a) Financial Strain
b) Psychological Effects
c) Effects on Family
7) Conclusion

From the Paper:

"Unemployment is one of the major economic problems affecting a nation. The United States, one of the vibrant economies in the world currently suffers from a huge unemployment crisis with more than 8 million people in the civilian workforce without jobs. After a decade of continued and consistent growth (1990 to 2000), which saw a growing GDP and a booming economy, there started a period of recession. Unemployment rates reached a recent high of 6.1% in June 2003. The loss of productivity and the extended unemployment benefits have created additional strain on the already deficient federal budget, which in turn has resulted in higher burden for the tax paying citizens. Let us analyze the underlying causes for unemployment, the unemployment support and provisions offered by the government and the effects of unemployment on the individual as well as the national economy as a whole."

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