Ask the Economist: Slow increase in employment rate despite high GDP growth.
Posted by Juvenile on September 3, 2008 · Leave a Comment
Starting today, I’ll be entertaining queries pertaining to economics. You can email me your questions at musingsofayoungeconomist@gmail.com. You may also post a question at this PinoyExchange link
Here’s a question posted by drhenry4 on PinoyExchange :
(The) Philippine economy grew by 7.3% last year, the fastest in the country’s history, but employment rate grew by (a) mere 0.2%. How is this so?
For this analysis, I will be using the unemployment rate for convenience. By definition, the unemployment rate is the percentage of unemployed workers in the labor force. The labor force, here in the Philippines, is defined by the NSCB as “all persons 15 years old and over as of their last birthday who are either employed or unemployed.” In notation form, Labor Force = Employed + Unemployed.
In theory, what causes unemployment? Two things:
- Frictional Unemployment. This is the time it takes people in the labor force to look for a job. This occurs because it takes time to match people and jobs (due to preferences, educational background, previous training, mobility in terms of location, and specific industry demand for labor).
- Wage Rigidity. When real wage is above equilibrium level, the supply of workers exceeds the demand for them. Firms would then limit their demand for labor resulting in unemployment.
Continue reading this article at Musings of a Young Economist.
http://musingsofayoungeconomist.co.cc
Disclaimer: PinoyBlogoSphere.com(PBS) claims no credit for any content(posts, articles, texts, images, videos) featured on this site unless otherwise noted. All contents are copyright to their owners/sources. PBS is in no way responsible for or has control of the content of any external web site links. Information on this site may contain errors or inaccuracies; we do not make warranty as to the correctness or reliability of the site’s content. If you own rights to any of the content, and do not wish them to appear on this site, please contact us via e-mail and they will be removed.
Other Posts
- August 28, 2008 -- Are U-turns saving us money?
- August 27, 2008 -- The Economics behind Olympic Medals
- April 3, 2011 -- Xoom.com and BPI enhance partnership by offering cash pickup in the Philippines
- January 12, 2011 -- First-time in You Jie Xiao Chao Restaurant
- January 12, 2011 -- Top Ten Reasons Why GMA Is Going to Visit the US, Vietnam, and Spain
- January 12, 2011 -- “How To Correctly Start An Internet Marketing Business” Workshop
- January 12, 2011 -- Rent 3G Water Splash Resort in Calamba
- October 10, 2010 -- The Difference Between ‘Ng’ and ‘Nang’
- September 17, 2010 -- Do You have a Lifestyle Design Mindset?
- August 2, 2010 -- Circumstantial Culture
- July 12, 2010 -- Do not wait for extraordinary opportunities
- July 12, 2010 -- Nominate your 100 most inspiring Filipino teachers
- July 10, 2010 -- The Blurb!
- June 19, 2010 -- Beating the Odds — a book about President GMA
- June 18, 2010 -- The living flag at Ayala Triangle Gardens
- June 11, 2010 -- Maligayang Araw ng Kalayaan
- June 9, 2010 -- Most Interesting Thing About the iPhone 4: THE NUMBER 4
- June 8, 2010 -- Globe Tattoo Micro-SIM for iPad: Unlimited Plan at PHP 999.00 a month
- June 5, 2010 -- The Bottle School Run: Runners Could Be Advocates
- May 24, 2010 -- Election Fraud in the Philippines?