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1 Introductory concepts 2  Market mechanism  3 Elasticities  4 Market structures 5  Market failures  6  Macro economic activity/eco growth  7 Inflation 8  Employment & unemployment  9  External Stability  10  Income distribution 11.Factors affecting economy  12  Fiscal/Budgetary policy  13  Monetary Policy   14 Aggregate Supply Policies  15 The Policy Mix

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Hidden unemployment


The unemployed statistics do not reveal the extent of hidden unemployment.  This occurs when people who are not members of the labour force, would actually prefer to be working, but are not actively seeking employment because they are discouraged about their employment prospects.


Hidden unemployment tends to increase during economic downturns as repeated rejections cause job seekers to exit the labour force (i.e. stop looking for work), which results in downward pressure on both the participation rate and the actual unemployment rate. In contrast, when the economy enters the recovery phase, job prospects improve and some in the pool of 'hidden unemployed' re-commence their search for jobs, replacing hidden unemployment with actual unemployment.


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