Economic Costs of Unemployment
The economic and social costs of unemployment, including personal costs, costs to government and costs to society in general.
Economic Costs of Unemployment
Loss of earnings to the unemployed
Those who are unemployed will find it more difficult to get work in the future (this is known as the hysteresis effect)
Stress and Health problems of being unemployed
Increased govt borrowing (PSNCR). Tax revenue will fall because there is less people paying income tax and VAT. Also the govt will have to spend more on unemployment benefits.
Lower GDP for the economy, the economy will be below full capacity this is inefficient and will lead to lower output and incomes.
Increase in social problems. Areas of high unemployment (especially youth unemployment) tend to have more crime and vandalism.