Another advantage of unemployment is that it helps limiting an accelerated growth of the Gross Domestic Product (GDP) that cannot be supported for extremely long periods of time because of the resource constraints and environmental impacts also. If the employment rate is high, human resources are not used at their best capacity, which leads to wasting opportunities to produce goods and services, causing problems for the economy on a long-term.
Unemployment also encourages certain people to start their own business. Most of these people are former employees previously trapped in dead-end jobs with no future, that after being fired from their jobs found the courage and the motivation so start a business of their own. This way, many little companies are coming along quite nicely. These small companies create labor demand that is satisfied by unemployed workers, therefore diminishing the unemployment rate on a medium term.
Unemployment determines a better prepared labor supply. Inactive professional periods determine unemployed people to take certain classes to qualify for another job, unemployment providing them the time and motivation for taking classes to improve their professional skills. On a long-term, the labor market will enrich itself with highly trained professionals.
Unemployment may also be responsible for the migration of unemployed population to under populated areas, where the work supply is very low. This creates a balanced population distribution on a territory, influencing in a positive way the economic life of certain regions.
The natural functioning of the labor market can only be attained with natural unemployment, whose rate corresponds to full employment. Therefore, the rate of natural unemployment ensures macroeconomic balance.
Each unemployment type affects the economy in a different way and has a different impact. Cyclical unemployment appears when there is not enough aggregate demand for the labor. This causes professional reorientation. Workers found in this situation will change their professional profile by orienting towards other jobs for which the labor market is not saturated, therefore satisfying the labor demand in other professional areas.
Frictional unemployment involves people being temporarily between jobs. It is also referred to as search unemployment, since people involved in it are searching for...
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