UNEMPLOYMENT

Outline Unemployment definition Unemployment in the classical model Frictional and structural unemployment models; search and job mismatch theory Botswana Labour market Employment Unemployment Youth unemployment conclusion

UNEMPLOYMENT DEFINITION Unemployment, as defined by the International Labour Organization occurs when people are without jobs and they have actively looked for work within the past four weeks.

4 Frictional and structural unemployment

5 Structural unemployment: Labour Market Rigidity

GDP, EMPLOYMENT RELATIONSHIP Botswana has a history of strong economic growth The rapid economic growth has been accompanied by rapid employment growth In long tern, employment has failed to keep up with GDP growth High formal sector employment Small informal and subsistence agric

LABOUR FORCE Govt is the largest single employer Formal employment – no decline during recession Only impact was on mining employment – small proportion of total

Unemployment by age Botswana Unemployment rate around 17.5% Female unemployment- 20% Male unemployment – 15% Unemployment high among the youth High female unemployment among the youth

AROUND 70% total unemployment is youth unemployment Historically high youth unemployment rate Why high youth unemployment? Young people fall within the intermediate sector with low paying jobs 1% increase in adult unemployment will be matched by a 2% increase in youth unemployment YOUTH UNEMPLOYMENT

Employment opportunities revolution A young man on fire in Tunisia protesting against his stall being shut down as he couldn’t afford a trading licence

Measures to reducing unemployment Remedy deficiencies in the labour market as a whole; Improve the quality of supply e.g. Training to suite the market demand Improve demand of labour e.g. Luring FDI, wages/salaries need to be more flexible and responsive to market conditions Improve quality of information and understanding market needs e.g. Create CV and HR institutions