Natural rate of unemployment. Unemployment: forms, causes and consequences The natural level of unemployment is characterized by

There are three main reasons for unemployment:

1) loss of job (dismissal);

2) voluntary resignation from work;

3) first appearance on the labor market.

There are three type of unemployment: frictional, structural and cyclic.

Frictional unemployment(from the word “friction” - friction) is associated with job search. Obviously, finding a job takes time and effort, so a person waiting or looking for a job is unemployed for some time. A feature of frictional unemployment is that people are already looking for work ready-made specialists with a certain level of professional training and qualifications. Therefore, the main reason for this type of unemployment is imperfect information(information about the availability of vacancies). A person who loses his job today usually cannot find another job tomorrow.

Frictional unemployed include:

1) dismissed from work by order of the administration;

2) those who resigned of their own free will;

3) awaiting reinstatement to their previous job;

4) those who have found a job but have not yet started it;

5) seasonal workers (out of season);

6) people who have entered the labor market for the first time and have the level of professional training and qualifications required in the economy.

Frictional unemployment is not only a phenomenon inevitable, since it is associated with natural trends in the movement of the labor force (people will always change jobs, trying to find a job that best suits their preferences and qualifications), but also desirable, as it contributes to a more rational allocation of labor and higher productivity (favorite work is always more productive and creative than the one that a person forces himself to do). The level of frictional unemployment is equal to the ratio of the number of frictional unemployed to the total labor force expressed as a percentage:

Structural unemployment is caused by structural changes in the economy, which are associated with a) changes in the structure of demand for products of different industries and b) changes in the sectoral structure of the economy, the cause of which is scientific and technological progress. The structure of demand is constantly changing. The demand for the products of some industries increases, leading to an increase in the demand for labor, while the demand for the products of other industries decreases, leading to a decrease in employment, layoffs of workers, and an increase in unemployment. Over time, the industrial structure of production also changes: some industries become obsolete and disappear, such as the production of steam locomotives, carriages, kerosene lamps and black-and-white televisions, while others appear, such as the production of personal computers, VCRs, pagers and mobile phones. The set of professions required in the economy is changing. The professions of chimney sweep, glass blower, lamplighter, coachman, and traveling salesman disappeared, but the professions of programmer, image maker, disc jockey, and designer appeared. The reason for structural unemployment is the discrepancy between the structure of the labor force and the structure of jobs. This means that people with professions and skill levels that do not meet modern requirements and the modern industry structure, being fired, cannot find a job. In addition, the structural unemployed include people who have entered the labor market for the first time, including graduates of higher and secondary specialized educational institutions, whose profession is no longer required in the economy. The structural unemployed also include people who have lost their jobs due to changes in the structure of demand for products from different industries. At different periods of time, the demand for the products of some industries increases, so production expands and additional workers are needed, while the demand for the products of other industries falls, production decreases, and workers are laid off.

The structural unemployment rate is calculated as the ratio of the number of structural unemployed to the total labor force, expressed as a percentage:

Since both frictional and structural unemployment are associated with job searches, these types of unemployment fall into the category " search unemployment».

Structural unemployment is longer lasting and more costly than frictional unemployment because finding work in new industries without specialized retraining and retraining almost impossible. However, like frictional unemployment, structural unemployment is an inevitable phenomenon and natural(i.e. associated with natural processes in the development and movement of labor) even in highly developed economies, since the structure of demand for the products of different industries is constantly changing and the sectoral structure of the economy is constantly changing in connection with scientific and technological progress, and therefore the economy is constantly experiencing and structural shifts will always occur, causing structural unemployment. Therefore, if there is only frictional and structural unemployment in the economy, then this corresponds to the state full employment labor force, and the actual volume of output in this case is equal to the potential.

Natural rate of unemployment(natural rate of unemployment – u*) is the level at which the full employment(full-employment) work force, i.e. its most effective and rational use. This means that all people who want to work find work. The natural rate of unemployment is therefore called unemployment rate at full employment(full-employment rate of unemployment), and the volume of output corresponding to the natural rate of unemployment is called natural output volume(natural output). Since full employment of the labor force means that there is only frictional and structural unemployment in the economy, the natural rate of unemployment can be calculated as the sum of the levels of frictional and structural unemployment:

The modern name of this indicator is non-inflationary unemployment rate– NAIRU (non – accelerating inflation rate of unemployment). Consider the graph of economic growth and the business cycle.

Each point of the curve depicting economic growth (Fig. 4.1.), i.e. each point on the trend corresponds to the value of potential GDP or the state of full employment of resources (points B and C). And each point on the sinusoid representing the economic cycle corresponds to the value of actual GDP (points A and D). If actual output exceeds potential(point A), i.e. If the actual unemployment rate is below the natural rate, this means that aggregate demand exceeds aggregate output. This is the situation overemployment. When moving from point B to point A, the price level increases, i.e. acceleration of inflation. Thus, when the economy is at its potential output level (full employment level), which is the natural rate of unemployment, inflation does not accelerate.

1) increasing the amount of unemployment benefits;

2) increasing the length of time for paying unemployment benefits;

3) an increase in the share of women in the labor force;

4) increasing the share of youth in the labor market

The first two factors provide the opportunity to search for work over a longer period of time. The last two factors, which mean a change in the gender and age structure of the labor force, increase the number of people entering the labor market for the first time and looking for work (i.e., an increase in the number of unemployed), increase competition in the labor market and lengthen the period of job search.

Actual unemployment may exceed its natural level. This occurs during a downturn (recession) in the economy. Unemployment caused by a recession is cyclical unemployment. On the business cycle graph (Fig. 4.1.) this situation is represented by point D, in which actual GDP is less than potential. This means that there is underemployment of resources in the economy, i.e. . the actual unemployment rate is higher than the natural rate. In modern conditions, the existence of cyclical unemployment is associated both with the insufficiency of aggregate expenditures in the economy, i.e. both a reduction in aggregate demand and a reduction in aggregate supply.

Since the sum of the frictional, structural and involuntary unemployment levels is equal to the natural unemployment rate, the actual unemployment rate is equal to the sum of the natural unemployment rate and the cyclical unemployment rate:

u fact. = u* + u cycle.

The actual unemployment rate can be either greater (during a recession) or less (during a boom) than the natural rate of unemployment. Thus, during a recession, there is underemployment of resources, so the level of cyclical unemployment is a positive value, and during a boom, there is overemployment of resources, so the level of cyclical unemployment is a negative value.

Today, the problem of unemployment is a pressing issue arising in a market economy. It is especially relevant now for Russia. The economic downturn also affected the labor market. The consequences of unemployment are quite severe. In most cases, in relation to the individual, it leads to depression, which in turn leads to inactivity. The latter contributes to the loss of self-esteem and qualifications, which entails the decomposition of the individual. The study of the problem of unemployment, as well as the search for ways to solve it, are therefore very pressing issues. It is also important to be able to determine unemployment rates. We will talk about all this in detail in this article.

Definition of unemployment and its types

What is unemployment? This is a socio-economic phenomenon, associated with the fact that part of the population that is economically active wants and is able to work, but cannot find a place of service. This leads to the threat of loss of profession, qualifications, social status, as well as a decrease in living standards. The high unemployment rate is a serious problem for the state. However, as such, it inevitably arises in a market economy, being the result of the interaction between the supply of labor and the demand for it. It increases during periods of economic downturn and decreases during periods of expansion. This is how the dynamics of the unemployment rate manifests itself. However, there are always people who are trying to find a job.

There are three types of unemployment in the modern economy:

friction;
cyclic;
structural.

Frictional unemployment

It is determined by personnel mobility. It includes people who are actively looking for work or waiting to get one. Search always requires a certain period of time. Frictional unemployment is usually voluntary and short-lived, since job seekers in this case have certain skills that can be sold on the labor market. Some people change jobs voluntarily, in order to improve pay and conditions, or quit of their own free will due to disappointment in their chosen profession. Others are laid off due to enterprise reorganization, staff reduction, etc. This also includes people trying to find a job for the first time (for example, after graduating from an educational institution), who have temporarily lost their seasonal work (harvesting, collecting firewood, etc.).

When these people find a place to work, others will appear. A peculiarity of this type of unemployment is the lack of information on the vacancies available in a given period. Therefore, there will always be a certain number of people subject to frictional unemployment. This is inevitable and is even considered desirable for the economy. The fact is that some people can move to a higher-paying job from a low-paying one and then strive to stay in their new place. In turn, this leads to them performing their duties more conscientiously. This leads to an improvement in the quality of products and an increase in production volume. Others become convinced that they do not meet the requirements of the workplace they occupy and look for a position with lower pay. In this way, labor resources are distributed more rationally.

How to determine the level of frictional unemployment?

Frictional unemployment levels are determined by the ratio of the number of frictional unemployed to the labor force, expressed as a percentage. They are calculated using the following formula:

u friction = U friction / L*100%.

Unemployment is structural

It is associated with the emergence of new products that displace obsolete ones, as well as with changes in the services market. The sectoral structure of production is also changing. Enterprises are beginning to revise the technology and structure of production, which leads to the need for new personnel. Demand for some professions decreases and increases for others. However, the response to changes in the demand of potential employees is slow. It turns out that some of them do not have the skills needed at this moment. The structural unemployed, in addition, include people who have appeared on the labor market for the first time, including graduates of secondary specialized and higher educational institutions, whose professions are no longer in demand in the economy.

In addition, unemployment caused by the expansion or change in the geography of production can also be attributed to this type, since in most cases qualified personnel do not have the opportunity to move with their enterprise. And there may not be trained personnel in the new place. The main cause of structural unemployment, therefore, is scientific and technological progress, which changes the nature of demand in society.

Structural unemployment rate

Its level is determined by the percentage ratio of the number of structural unemployed to the labor force. The formula is as follows:

u struct = U struct / L*100%.

Natural rate of unemployment

Both in unfavorable and prosperous periods, there is unemployment of structural and frictional types. It's unavoidable. The natural rate of unemployment is the total number of unemployed people of these two types as a percentage of the total volume of the labor market. It is characteristic of a situation in which macroeconomic equilibrium is observed. Natural unemployment occurs when the number of people looking for a job coincides with the number of available places. In other words, there is an opportunity to find a job. This level also presupposes the presence in society of a labor reserve that has the ability to quickly move in the economic sphere, occupying free places. The natural rate of unemployment is different for different countries. In particular, for France and Great Britain it is 5%, for Japan and Sweden - 1.5-2%, 8% for Canada, 5-6% for the USA. Economists estimate that the average (natural) unemployment rate is 4-6%.

Real unemployment may sometimes be below its natural level, for example, in a situation of war. In the case when the existing unemployment quantitatively corresponds to the natural level, it is considered that the economy is functioning in conditions of full employment and there is a full volume of production. In other words, the actual GDP produced in this case is equal to the potential GDP.

Cyclical unemployment

When the number of vacancies becomes less than the number of unemployed people, cyclical unemployment occurs. It is caused by a cyclical decline in production. Cyclical unemployment levels change depending on the economic situation. It is caused by a decline in production, in turn caused by the phase of the economic cycle (the name of this type of unemployment comes from here), characterized by a decrease in demand for services and goods. This leads to the fact that the company's staff is significantly reduced. An example is the unemployment caused in 2008-2009. global economic crisis. When the economy picks up, the cyclical unemployment rate gradually declines as new job openings become available.

The first 2 types described above are inevitable and natural. However, cyclical unemployment is a deviation from natural (structural and frictional). It is associated with fluctuations in activity in the economy. By it, therefore, we need to understand the difference between natural and actual unemployment.

How to determine the unemployment rate?

The level indicator is the main indicator of the phenomenon under consideration. This is the percentage of the labor force that is unemployed. Full employment does not imply the absence of a situation where some workers cannot find a use for their work. We have determined that the emergence of structural and frictional unemployment is inevitable. Therefore, full employment does not equal 100%. At full employment, unemployment rates can be defined as the sum of structural and frictional unemployment. The formula is as follows:

u full = u friction + u structure

The actual unemployment rate is the sum of the levels of all three types. However, it is easier to find it using the following formula:

u fact = U*100% / L = U*100% / E + U.

Here L is the labor force, U is the number of unemployed, E is the number of employed.

You can determine, knowing the actual unemployment rate, the cyclical unemployment rate. The formula is as follows:

u cycle = u complete - u fact.

Consequences of unemployment

The presence of unemployment leads to certain consequences of a non-economic and economic nature. They appear most often in cyclical unemployment, and to a lesser extent in structural unemployment. Cyclical unemployment is a consequence of economic instability. It leads to forced underemployment. Structural unemployment displaces industries that are outdated. Consequently, forced unemployed people reappear on the labor market.

Two types of consequences that unemployment leads to have been identified by economists:

Non-economic;

Economic.

Non-economic ones are divided into psychological and social. Let us determine the most important consequences from the point of view of their influence on the social and economic situation.

Positive economic consequences include:

formation of a labor reserve for further restructuring of the economic structure;
competition among workers, which serves as a stimulus for the development of their ability to work;
stimulating growth in productivity and labor intensity;
a break in employment to improve the level of education and retraining.

A low level of real unemployment can thus contribute to economic growth.

The negative economic consequences are as follows:

reduction in production
devaluation of education,
loss of qualifications,
state costs for assistance to the unemployed,
decline in living standards and tax revenues,
underproduction of national income.

Positive social impacts include:

increasing the social significance of the workplace;
increasing freedom of choice of duty station;
increase in free time.

Negative social consequences are:

increased tension in society,
exacerbation of the criminal situation in it,
increase in the number of mental and physical illnesses,
decrease in people's labor activity,
increasing social differentiation.

Economic and social impacts at individual and societal levels

Negative economic and social consequences are a serious national problem. Economic ones at the individual level consist of the loss of part of the income or all of the income, the loss of qualifications, and, consequently, a decrease in the chances of finding a prestigious, highly paid job in the future. At the level of society, the economic consequences that unemployment has are the underproduction of GNP, its lag behind the potential actual GNP. The presence of cyclical unemployment means that resources are not fully utilized. Therefore, actual GNP is less than potential.

At the individual level, the social consequences are that if a person cannot find a job for a long time, he begins to experience stress, despair, and develop cardiovascular and nervous diseases. It can also lead to family breakdown. In addition, the lack of a stable source of income in some cases pushes a person to commit a crime.

What about at the societal level? A high level of unemployment means, first of all, an increase in social tension. Social consequences, in addition, are an increase in the country's mortality and morbidity rates, as well as crime. In addition, the costs of unemployment are also the losses that society incurs in connection with the costs incurred for professional training, education and providing people with the necessary level of qualifications.

Fight against unemployment

Since the phenomenon under consideration is a serious economic problem, the state is implementing a number of measures aimed at combating it. The level of potential unemployment is monitored. Different measures are used for different types. However the following are common to all:

creation of employment centers;
government payments of unemployment benefits;
creation of new jobs in the country (for example, during the 2008-2009 crisis, the state sent unemployed people to public works).

Fighting frictional unemployment

The following measures are used to combat the friction type phenomenon in question:

formation of a database of vacancies (including in other regions);
the formation of special services whose function is to collect information about available vacancies.

In addition, it is possible to apply measures aimed at increasing labor mobility (forming an affordable housing market, increasing construction volumes, changing legislation to abolish administrative barriers that arise when moving).

Combating structural unemployment

Structural unemployment can be combated in the following ways:

create government institutions and services (including those operating on the basis of employment centers) aimed at advanced training and retraining;
help private institutions, as well as small educational centers of this type.

These institutions must implement advanced training and retraining programs to better prepare the workforce. Retraining in a number of cities is provided by population support centers, as well as educational institutions.

How to deal with cyclical unemployment?

You can fight it in the following ways:

pursue a stabilization policy that is aimed at preventing deep downturns in production and, consequently, mass unemployment;
create new jobs in the public sector of the economy.

In addition, demand for goods should be stimulated, since when it grows, production volumes increase, which contributes to an increase in the labor force.

Measures taken in Russia

At the level of state policy in the Russian economy, a number of non-standard, but effective measures have recently been adopted to reduce the unemployment rate in Russia. This, in particular, is early voluntary retirement, which can be done two years before retirement age. According to the government, this helps free up jobs. Consequently, the unemployment rate in Russia is decreasing. The decrease is due to people at this age who are no longer employed. In addition, new jobs are being created by promoting small businesses and helping individuals who want to start their own business. The state is also obliged to employ young specialists who have graduated from secondary specialized and higher educational institutions if they have a sufficient level of training based on their training results. It is necessary to understand that only by simultaneously solving several problems can a significant reduction in the overall unemployment rate be achieved.

Macroeconomics. Unemployment

Employment is a very important indicator in macroeconomics. It refers to the number of working-age adults (over 16 years of age) who are employed. Unfortunately, not all adults have jobs; there are also unemployed citizens. Unemployment in a market economy characterizes the number of adult working-age population who do not have a job, but are actively looking for one. The total number of unemployed and employed citizens is

Calculation of unemployment is carried out using various indicators, but generally accepted ones, incl. and in the International Labor Organization, the unemployment rate is considered.

Unemployment in a market economy is a socio-economic phenomenon in which a certain proportion of the labor force is not used in the production of services and goods. The labor force refers to the number of employed and unemployed people.

The following types of unemployment are distinguished:

Friction
Structural
Institutional
Cyclic
Seasonal

Unemployment associated with the time required to find a new job is referred to as frictional unemployment. Its duration can range from 1 month to 3 months.

Frictional unemployment arises as a consequence of the dynamic development of the labor market. Some workers voluntarily decided to change jobs, finding, for example, a higher-paying or more interesting job. Another part of the workers are actively looking for work due to dismissal from their current job. The third part of workers is just entering the workforce or entering it for the first time due to a natural movement from the category of the inactive population, from an economic point of view, to the opposite category.

Unemployment associated with technological changes occurring in production and changing the structure of demand for workers is structural unemployment. It occurs when an employee who was fired from one industry is employed in another industry.

Structural unemployment occurs when the territorial or sectoral structure of demand for labor changes. Over time, significant changes occur in production technology and in the structure of consumer demand, which cause changes in the structure of the overall demand for labor. If the demand for labor in a particular profession or in a particular region falls, unemployment will result. Workers released from production are not able to quickly change their qualifications and profession or change their place of residence, so they are forced to remain unemployed for some time.

Economists, as a rule, do not draw clear boundaries between structural and frictional unemployment, since in both cases laid-off workers are actively looking for a new job.

It is worth noting that these types of unemployment in the economy exist constantly, since it is impossible to completely reduce them to zero or destroy them. People will look for new jobs in pursuit of financial well-being, and firms, in turn, will seek to hire the most qualified employees, as justified by their desire to maximize profits. That is, in a market economy in the labor market, indicators of supply and demand constantly fluctuate.

Since the existence of structural and frictional unemployment is inevitable, economists formulate their sum as the natural rate of unemployment

The natural rate of unemployment implies a level of unemployment that corresponds to full employment (consists of structural and frictional). The reasons for the natural rate of unemployment are due to natural reasons, such as migration, staff turnover, demographic reasons.

If the economy has only a natural rate of unemployment, then this situation is called full employment.

The reasons for the natural level of unemployment are the balance of labor markets, when the number of workers looking for is equal to the number of vacancies. Therefore, full employment does not mean 100% absence of unemployment, but only a certain minimum required level of unemployment. The natural rate of unemployment is, to a certain extent, a positive phenomenon.

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CONTENT

INTRODUCTION

CONCLUSION

INTRODUCTION

The global economic crisis, which began in 2008, is inexorably increasing the growth rate of unemployment in Russia. Such a high growth rate has led to the fact that the unemployment situation in the United States is significantly higher in all respects than the situation in the United States, despite the fact that the United States is the birthplace of the crisis. In 2009, according to official sources, the growth rate of unemployment began to decline. And in the summer of that year, the growth in unemployment stopped completely. Growth has stopped, but the level has remained the same, despite all the government's attempts to reduce this figure by creating new jobs.
Unemployment in a market economy is a socio-economic phenomenon in which a certain proportion of the labor force is not used in the production of services and goods. The labor force refers to the number of employed and unemployed people.
The natural level of unemployment is a level that corresponds to full employment (includes frictional and structural forms of unemployment), is due to natural reasons (staff turnover, migration, demographic reasons), and is not related to the dynamics of economic growth.
The reasons for the natural rate of unemployment are the balance of labor markets, when the number of workers seeking equals the number of vacant jobs. Therefore, full employment does not mean 100% absence of unemployment, but only a certain minimum required level of unemployment. The natural rate of unemployment is, to a certain extent, a positive phenomenon.

1. CONCEPT AND CONTENT OF NATURAL UNEMPLOYMENT

Unemployment is a socio-economic phenomenon that implies a lack of work among people who make up the economically active population.
The natural level of unemployment is an objectively developing, relatively stable, unrelated to the dynamics of economic growth, level of unemployment caused by natural causes: staff turnover, migration, demographic factors. The natural rate of unemployment is believed to be 4-5% of the labor force.
The natural rate of unemployment is to some extent a positive phenomenon, because the “frictional” unemployed need time to find suitable vacancies. The “structural” unemployed also need time to acquire qualifications or move to another location when necessary to obtain a job. If the number of job seekers exceeds the available vacancies, then labor markets are not balanced; At the same time, there is a deficit in aggregate demand and cyclical unemployment. On the other hand, with excess aggregate demand, there is a “shortage” of labor, that is, the number of available jobs exceeds the number of workers waiting for work. In such a situation, the actual unemployment rate is below the natural rate. The unusually “tense” situation in labor markets is associated with inflation.
The concept of “natural rate of unemployment” requires clarification in two aspects.
First, this term does not mean that the economy always operates at the natural rate of unemployment and thereby realizes its productive potential. In our summary of the business cycle, we already discussed how unemployment rates often exceed the natural rate. On the other hand, in rare cases, an economy may experience a level of unemployment that is below the natural rate. For example, during the Second World War, when the natural rate was about 3-4%, the demands of war production led to an almost unlimited demand for labor. Overtime and part-time work have become commonplace. Moreover, the government did not allow workers in “essential” industries to quit, artificially reducing frictional unemployment.
The actual unemployment rate for the entire period from 1943 to 1945 was less than 2%, and in 1944 it fell to 1.2%.
The economy was exceeding its production capacity but was putting significant inflationary pressure on output.
Secondly, the natural rate of unemployment in itself is not necessarily constant; it is subject to revision due to institutional changes (changes in the laws and customs of the union). For example, in the 1960s, many believed that this inevitable minimum of frictional and structural unemployment was 4% of the labor force. In other words, it was recognized that full employment was achieved when 96% of the labor force was employed. And currently, economists believe that the natural rate of unemployment is approximately 5 - 6%.
Why is the natural rate of unemployment higher today than in the 60s? First, the demographic composition of the workforce has changed. In particular, women and young workers, who have traditionally had a high proportion of unemployed, have become a relatively more important component of the labor force. Secondly, institutional changes have occurred. For example, the unemployment compensation program was expanded both in the number of workers it covered and in the amount of benefits. This is important because unemployment compensation, by weakening its impact on the economy, allows the unemployed to more easily look for work and thereby increases frictional unemployment and the overall unemployment rate.

2. NATURAL LEVEL OF UNEMPLOYMENT, TYPES AND CAUSES OF UNEMPLOYMENT

The natural unemployment rate (NAIRU) is determined by averaging the actual unemployment rate in the country over the previous 10 years (or a longer period) and the next 10 years (forecast estimates are used taking into account the probabilistic dynamics of the expected inflation rate).
In industrial countries (for example, in the USA), in order to obtain appropriate monitoring, the statistical department of the Ministry of Labor conducts monthly sample surveys of approximately 60 thousand families about attitudes towards employment. However, statistical errors are inevitable because, for example, people who are not actively looking for work may indicate on their unemployment benefits application that they are looking for jobs. As a result, both actual and natural unemployment rates will be overestimated.
On the other hand, those who are employed in the “shadow” economy often call themselves unemployed - as a result, the higher the unemployment rate, the larger the share of the “shadow” sector. The latter is especially relevant for economies in transition, where a significant share of those employed in “shadow” business is combined with the lack of adequate statistical monitoring of the economy, underdeveloped labor market infrastructure, and the maintenance of “hidden” unemployment as a factor in the relative stabilization of government spending and the reduction of social risk.
Therefore, calculations of the unemployment rate in transition economies, including the Russian one, often take on the character of expert assessments.
The natural level of unemployment is an objectively developing, relatively stable long-term level of unemployment, due to natural reasons (staff turnover, migration, demographic factors), not related to the dynamics of economic growth.
The natural rate of level of unemployment – u*) is the level at which full employment of the population (full-bail) of the labor force is ensured, i.e. its most effective and rational use. This means that all people who want to work find work. The natural rate of unemployment is therefore called the full-Population employment rate of jobless rate, and the output corresponding to the natural rate of unemployment is called natural output. Since the full employment of the labor force means that there is only frictional and structural unemployment in the economy, the natural rate of unemployment can be calculated as the sum of the levels of frictional and structural unemployment:

The modern name of this indicator is the non-accelerating consumer price index rate of level of unemployment - NAIRU. Consider the graph of economic growth and the business cycle.
Each point on the curve representing economic growth, i.e. each point on the trend corresponds to the value of potential GDP or the state of full employment of resources (points B and C). And each point on the sinusoid representing the economic cycle corresponds to the value of actual GDP (points A and D). If the actual volume of output exceeds the potential (point A), i.e. If the actual unemployment rate is below the natural rate, this means that aggregate demand exceeds aggregate output. This is an over-busy situation. When moving from point B to point A, the price level increases, i.e. acceleration of inflation. Thus, when the economy is at its potential output level (full employment level), which corresponds to the natural rate of unemployment, inflation does not accelerate.

The magnitude of the natural rate of unemployment varies over time. So, in the early 60s it accounted for 4% of the labor force, and currently 6% - 7%. The reason for the increase in the natural rate of unemployment is an increase in the length of time it takes to find a job (i.e., the length of time people are unemployed), which may be due to:
1) increasing the amount of unemployment benefits;
2) increasing the length of time for paying unemployment benefits;
3) an increase in the share of women in the labor force;
4) increasing the share of young people in the labor market.
The first two factors provide the opportunity to search for work over a longer period of time. The last two factors, which mean a change in the gender and age structure of the labor force, increase the number of people entering the labor market for the first time and looking for work (i.e., an increase in the number of unemployed), increase competition in the labor market and lengthen the period of job search.
To calculate the natural rate of unemployment, a dynamic model of a stable unemployment rate (“labor force dynamics model”), proposed by M. Friedman, can be used, who proceeded from the fact that the main cause of unemployment is imperfect information. Some of the employed lose their jobs, becoming unemployed, and some of the unemployed get employed and become employed.

In a steady state, the number of employed people who lose their jobs and become unemployed is equal to the number of unemployed people who find work and become employed. If we denote the share of the employed who have lost their jobs from the total number of employed by the letter s, and the share of the unemployed who have found work from the total number of unemployed by the letter f, then in a steady state:
Because, then or
From here or.
Divide both sides by L, we get:
Since U/L is an indicator of the unemployment rate, i.e. u, then from here:
Since the premise of the model is the idea that the cause of unemployment is imperfect information, the resulting value of the unemployment rate (u) can be considered an indicator of the natural rate of unemployment (u*). So, if the average period of a person being among the employed is 80 months (this means that 1/80 of the employed lose their jobs every month, i.e. s = 1/80), and the average period of a person being among the unemployed is 5 months (hence, monthly in the economy 1/5 or 20% of the unemployed find work, i.e. f = 0.2), then the sustainable unemployment rate will be u = s / (s + f) = 0.0125 / 0.2125 = 0.0588 or approximately 5.9%.
Actual unemployment may exceed its natural level. This occurs when there is a downturn in the economy (economic downturn) in the economy. Unemployment caused by a recession is cyclical unemployment. On the business cycle graph, this situation is represented by point D, where actual GDP is less than potential. This means that the economy has underemployed resources, i.e. the actual unemployment rate is higher than the natural rate. In modern conditions, the existence of cyclical unemployment is associated both with the insufficiency of total costs in the economy, i.e. both a reduction in aggregate demand and a reduction in aggregate supply.
The actual unemployment rate is calculated as a percentage of the total number of unemployed people to the total labor force or as the sum of unemployment rates of all types (frictional, structural and cyclical):
Since the sum of the levels of frictional, structural and involuntary unemployment is equal to the natural level of unemployment, the actual level of unemployment is equal to the sum of the natural level of unemployment and the level of cyclical unemployment: u actual = u* + u cycle.
The actual unemployment rate can be either greater (during an economic recession) or less (during a boom) than the natural rate of unemployment. Thus, during a recession in the economy, there is underemployment of resources, so the level of cyclical unemployment is a positive value, and during a boom, there is overemployment of resources, so the level of cyclical unemployment is a negative value.
The natural rate of unemployment for each specific year is determined as the arithmetic mean of the unemployment rates for the previous 10 and subsequent 10 years, using the method of extrapolation of trends.
The rate of natural unemployment is sometimes called total unemployment, meaning that the unemployment rate is never zero because, for natural reasons, people are constantly leaving the ranks of the unemployed and joining them. Someone, for example, is looking for a job for the first time, someone is busy looking for a better job, that is, people spend time looking for work, being unemployed during this period.
Even when the economy is at its peak, not all people have jobs. This happens if, for example, the demand for a certain specialty falls and society does not currently need so many specialists in a certain profile, or a structural restructuring of the economy is underway in a given region.
Natural unemployment (Un) combines two types of unemployment:
1. Friction (UFR)
2. Structural (Ustr)
Frictional unemployment is associated with searching and waiting for work, or looking for a better job, also those who are looking for work for the first time, for example, after graduating from college. This also includes those who lose their seasonal jobs, or people who have already found a place of work, but have not yet started work for some time.
Structural unemployment is associated with changes in the structure of demand, with technological shifts, as well as targeted government actions to change the structure of priorities in the economy.
The margin between structural and frictional unemployment is that structural unemployment can be more protracted because it takes time to retrain people who become unemployed as a result of restructuring the economy. However, both structural and frictional unemployment are quite natural and natural for any federation.
The natural rate of unemployment may change over time. If, for example, in the 60s in the USA the natural unemployment rate was 4%, now it is 5 - 6%.
The reasons for the increase in the natural rate of unemployment may be:
1. Anti-inflationary policy of states;
2. Prolonged economic downturn.
For example, in England in 1979, inflation reached 18%, and unemployment throughout the 70s was quite low - only 3.4%. After M. Thatcher, becoming Prime Minister, began to pursue tight monetary and fiscal policies, inflation fell to 5% in 1984, but unemployment rose to 11.1%. After inflation stabilized, the unemployment rate remained persistently high, that is, the natural rate of unemployment in the country increased.
This kind of complication “after treatment” of the economy from high inflation is known in macroeconomics as hysteresis.
Hysteresis is the long-term effects of certain economic phenomena, such as the natural rate of unemployment.
Hysteresis effect - state of unemployment; Having reached a sufficiently high level, it can, to a certain extent, self-reproduce and remain there. The economic reasons for hysteresis (long-term labor market rigidity) are controversial. Some institutional factors lead to hysteresis. For example, social insurance, especially unemployment insurance, can, through the tax system, reduce firms' demand for labor in the formal economy. Unemployment can lead to a loss of human capital and the “tagging” of those who remain unemployed for long periods of time. Unions can negotiate to maintain the welfare of their actual members while ignoring the interests of outsiders who find themselves unemployed. Fixed costs associated with changing positions, jobs, or industries can also lead to hysteresis. Finally, there may be difficulties in distinguishing between real and apparent hysteresis phenomena when the final state of the system is determined by its current dynamics or its initial state. In the first case, hysteresis reflects our ignorance: by adding missing variables and information, we can more fully describe the evolution of the system being studied. Dr. interpretation of the phenomenon of hysteresis is the simple existence of several equilibrium states when invisible influences move the economy from one equilibrium state to another.
A prolonged recession could have the same consequences. An economic downturn can lead to long-term negative consequences, resulting in an increase in the natural rate of unemployment. The fact is that when people become unemployed, they lose valuable skills, which subsequently reduces their chances of getting a job; some people leave the country in search of work, as is the case in Moldova. In this case, labor resources (L), which are the basis of potential output in the economy, also decrease quantitatively.
During prolonged downturns in the economy, forced idleness can change people's attitudes toward work and reduce their desire to get a job.
All these reasons lead to an increase in frictional unemployment, and then to an increase in the natural rate of unemployment in the country.
For the natural rate of unemployment, another name is used - the unemployment rate that does not accelerate inflation - NAIRU-(Non-Accelerating-Information Rate of Unemployment). That is, Un is the threshold below which inflation begins to accelerate.
The main reasons for the existence of a natural (sustainable) level of unemployment
Increased job search time under the unemployment insurance system. Payment of unemployment benefits relatively reduces incentives for quick employment - the time for searching for a suitable job, retraining, etc. increases. In the long term, this contributes to achieving a greater balance in the structure of Jobs and the structure of the labor force. At the same time, an increase in unemployment benefits and the period of their payment contributes to an increase in the number of unemployed and an increase in the unemployment rate.
The stability (rigidity) of wages gives rise to “unemployment of expectation.” Expectation unemployment occurs as a result of the level of real wages exceeding its equilibrium value.

“Rigidity” of wages leads to a relative shortage of Jobs: workers become unemployed because at a given level of wages (w/P) the supply of labor L2 exceeds the demand for labor Lb and people simply “crave” the opportunity to get a job at a fixed rate of pay.
Unemployment rates vary across demographic groups. So it is significantly higher among young people than in other groups.
The trend towards an increase in the natural rate of unemployment in the long run is associated with:
1. increasing the share of youth in the labor force;
2. increasing the share of women in the labor force;
3. more frequent structural changes in the economy.
Natural Rate of Unemployment Hypothesis
The natural rate hypothesis is an assumption made by the American economist N. Gregory Mankiw in his work “Macroeconomics” that the dynamics of production volumes, employment and unemployment depend on fluctuations in the resulting demand only in the short term, and in the long term it is described by the classical model .

Okun's law is an empirical relationship between the rate of growth of unemployment and the rate of growth of GNP in the United States in the early 60s, suggesting that an excess of the unemployment rate by 1% above the level of natural unemployment reduces real GNP compared to potential by 2.5%. For other countries and other times it may be numerically different. Named after the American economist Arthur Okun. In reality, this is not a law, but a trend with many restrictions across countries, regions, the world as a whole and time periods.
(Y ? Y *) / Y * = ? Buc
Y - actual GNP
Y* - potential GNP
uc - cyclical unemployment rate
B - empirical sensitivity coefficient (usually assumed to be 2.5%)
Each country will have its own coefficient B, depending on the period.
It follows from the formula that if there is no cyclical unemployment in the country, the actual GNP is equal to the potential, i.e. All possible production resources are used in the economy.
Corollary to Okun's law:
(Y1 ? Y0) / Y0 = ? B(u1 ? u0) / (1 ? Bu0)
Y1,u1 - GNP and unemployment rate in the current period
Y0,u0 - GNP and unemployment rate in the base period
Practice shows that Okun's law is not always satisfied, i.e. is not a universal economic law.

Excessive unemployment entails large economic and social costs.
The main cost of unemployment is unproduced output.
When economists fail to create enough Jobs for everyone who is willing and able to work, the potential production of goods and services is lost forever. Unemployment prevents the union from continually moving up the potential opportunity curve. Economists define this lost output as a lag in GDP. This lag represents the amount by which actual GNP is less than potential GNP. Moreover, the higher the unemployment rate, the greater the lag in GNP.
A well-known researcher in the field of macroeconomics, A. Okun, mathematically expressed the relationship between the unemployment rate and the lag in GNP. Okun's law states that if the actual unemployment rate exceeds the natural rate by 1%, then the lag in GNP is 2.5%. This ratio of 1:2.5 or 2:5 allows one to calculate the absolute loss of output associated with any level of unemployment.
The economic costs of unemployment are unequally distributed among those employed in the economy:
- The unemployment rate for white collar workers is lower than for blue collar workers. This is because white-collar workers are employed in industries that are less subject to cyclical fluctuations or they work for their own firm;
- The unemployment rate among young people is higher than among adults. This is explained by the fact that young people have low qualifications, are more likely to leave work and be fired by their employers, and are also less mobile;
- The unemployment rate among men is higher than among women. The fact is that the highly cyclical industries that produce capital goods (automobiles, steel and construction) are dominated by men;
- The unemployment rate among immigrants - both adults and youth - is higher than among the local population.
Cyclical unemployment is a real social catastrophe. Economic decline and depression lead to inactivity, and inactivity leads to loss of skills, loss of self-esteem, decline in moral values, family breakdown, and social and political unrest.
History convincingly shows that mass unemployment leads to rapid, sometimes very violent, social and political change. This was evidenced by the leftward shift in American political theory during the Great Depression, and the New Deal was a true revolution in American political and economic thinking. An example of such global changes is Hitler’s rise to power in conditions of unemployment. Moreover, there is no doubt that the high percentage of unemployment among national minorities is a serious cause of the unrest and violence that arises in times of crisis and depression. As for ordinary people, researchers find a direct link between increases in homicides, deaths from cardiovascular disease, mental illness, suicide and high unemployment.
At any given period in different countries, unemployment rates differ significantly from each other. These differences are explained by the fact that different countries have different natural rates of unemployment, and also because these countries may find themselves in different phases of the economic cycle. The annual average unemployment rate in the United States is lower than that of the Maple Leaf, Australia, France, Britain and the Russian Federation.
The Phillips curve is a graphical representation of the inverse relationship between the inflation rate and the unemployment rate.
Named after the English economist Alban Phillips, who, based on empirical data for Great Britain for 1861-1957, derived a correlation between the unemployment rate and changes in the growth of money wages.
The dependence initially showed the connection between unemployment and changes in wages: the higher the unemployment, the lower the increase in money wages, the lower the price growth, and vice versa, the lower the unemployment and the higher the employment rate, the greater the increase in money wages, the higher the rate of price growth. Subsequently it was transformed into a relationship between prices and unemployment.
In the long term, it is a vertical straight line, in other words, it shows the absence of dependence between the inflation rate and the unemployment rate.
? - inflation rate,
?e - expected inflation rate,
(U ? Ue) - deviation of unemployment from the natural level - cyclical unemployment,
b > 0 - coefficient,
v - Supply shocks.

3. LEVEL OF NATURAL UNEMPLOYMENT IN RUSSIA AT THE CURRENT STAGE

According to a population survey on employment problems, conducted as of the second week of January 2012, of the total number of unemployed, 2661 thousand people, or 54.2%, were men and 2251 thousand people, or 45.8%, were women. Rural residents accounted for 1,941 thousand people, or 39.5%, among the unemployed.
Unemployment rate in January 2012 amounted to 6.6% (without excluding the seasonal factor).

Average age of unemployed in January 2012 was 34.7 years. Young people under 25 make up 28.4% of the unemployed, and people aged 50 and over make up 16.2%.
Average duration of job search for unemployed people in January 2012 was 8.2 months for women, 8.0 months for men.
According to the survey, in January 2012. 30.9% of the unemployed used contacting government employment services as a way to find work, 61.3% of the unemployed used contacting friends, relatives and acquaintances.
The number of unemployed citizens registered with state employment service institutions. By the end of January 2012 In state employment services, 1.5 million citizens were registered as not engaged in labor activities, of which 1.3 million people had unemployed status, including 1.1 million people receiving unemployment benefits.
In January 2012 160.5 thousand people received unemployed status. The number of unemployed people employed was 6.2 thousand people, or 8.6% less than in January 2011, and amounted to 65.2 thousand people.

In January 2012 The load of the unemployed population registered in state employment service institutions per 100 declared vacancies amounted to 117.4 people.
Number of economically active population in January 2012 amounted, according to the results of a population survey on employment problems, to 74.9 million people, or about 53% of the total population of the country, of which 70.0 million people, or 93.4% of the economically active population, were employed in the economy and 4.9 million people (6.6%) did not have an occupation, but were actively looking for one (in accordance with the methodology of the International Labor Organization, they are classified as unemployed). 1.3 million people are registered as unemployed in state employment service institutions.

CONCLUSION

Unemployment is a rather complex and contradictory phenomenon. It has not only negative consequences, but also positive aspects: Firstly, the unemployed, being a labor reserve, are the basis for staffing various enterprises with more or less qualified personnel. Secondly, they create an opportunity for the redistribution of qualified personnel to rapidly growing industries and emerging new enterprises. Thirdly, it makes it possible to get rid of unscrupulous employees. Fourthly, it creates in workers a constant readiness and ability for mobility.
The natural rate of unemployment is an economic hypothesis according to which, for the general economic equilibrium established at a certain real wage, there is a certain underemployment of the population, which is the result of a lack of information, mobility barriers, demographic changes and other consequences of market imperfections. For these reasons, it is impossible to reduce the unemployment rate to zero, but only to reduce it to a mark determined by market imperfections. Thus, it is impossible to influence the level of such unemployment in a narrow time frame. Only slow impact through regulatory or structural policy methods will help. Eg:
? development of technologies that facilitate job search
? introduction of minimum wage
? trade union organization
? introduction of so-called effective wages, exceeding market wages
According to the theory of M. Friedman, natural unemployment is specific to each economy in accordance with the macroeconomic equilibrium, in which the expected level of inflation is equal to its actual level. An attempt to describe the relationship between inflation and unemployment rates is the Phillips Curve. However, the existence of a direct relationship over a wide time frame between these quantities is denied by Friedman and Phillips. According to them, the inflation rate depends mainly on the money supply, and the unemployment rate, in turn, tends to the level of natural unemployment.

LIST OF REFERENCES USED

1. Genkin B. M. Economics and sociology of labor: textbook. for universities /B. M. Genkin. - 7th ed., add. - M.: Norma, 2010. - 448 p.
2. Egorova E.A., Karmanov M.V., Kuchmaeva O.V. Economic demography / Moscow International Institute of Econometrics, Informatics, Finance and Law. - M.: 2011. - 83 p.
3. Krasnozhenova G.F., Simonin P.V. Human resources management/textbook. - M.: INFRA-M, 2009. - 159 p.
4. Kazimov K.G. Labor market and employment: Textbook. allowance. - M.: Perspective, 2010.
5. Russian statistical e
etc.................

Natural rate of unemployment

The natural rate of unemployment (u*) is the level at which full employment of the labor force is ensured, i.e. its most effective and rational use. This means that all people who want to work find work. The natural rate of unemployment is therefore called the full-employment rate of unemployment, and the output corresponding to the natural rate of unemployment is called natural output. Since full employment of the labor force means that there is only frictional and structural unemployment in the economy, the natural rate of unemployment can be calculated as the sum of the levels of frictional and structural unemployment:

U * = u friction + u structure = (U friction +U structure)/L * 100%.

The modern name of this indicator is the non-accelerating inflation rate of unemployment - NAIRU (non-accelerating inflation rate of unemployment). Consider the graph of economic growth and the business cycle.

Each point of the curve depicting economic growth (Fig. 1), i.e. each point on the trend corresponds to the value of potential GDP or the state of full employment of resources (points B and C). And each point on the sine wave representing the economic cycle corresponds to the value of actual GDP (points A and D).

If the actual volume of output exceeds the potential (point A), i.e. If the actual unemployment rate is below the natural rate, this means that aggregate demand exceeds aggregate output. This is an over-busy situation. When moving from point B to point A, the price level increases, i.e. acceleration of inflation. Thus, when the economy is at its potential output level (full employment level), which is the natural rate of unemployment, inflation does not accelerate.

increasing the size of unemployment benefits;
increasing the length of time for paying unemployment benefits;
the growing share of women in the labor force;
increasing the share of young people in the labor market.

To calculate the natural rate of unemployment, a dynamic model of a stable unemployment rate (“labor force dynamics model”), proposed by M. Friedman, can be used, who proceeded from the fact that the main cause of unemployment is imperfect information. Some of the employed lose their jobs, becoming unemployed, and some of the unemployed get employed and become employed. These movements (flows) are shown in Fig. 2.

Rice. 2. Labor force dynamics model

Since E = L - U then s*(L-U) = f*U or s*L - s*U = f*U.

Hence f*U + s*U = s*L or U*(s+f) = s*L. Divide both sides by L, we get: U/L*(s+f) = s.

Since U/L is an indicator of the unemployment rate, i.e. u, then hence: u = s/(s+f).

Since the premise of the model is the idea that the cause of unemployment is imperfect information, the resulting value of the unemployment rate (u) can be considered an indicator of the natural rate of unemployment (u*). So, if the average period of a person being among the employed is 80 months (this means that 1/80 of the employed lose their jobs every month, i.e. s = 1/80), and the average period of a person being among the unemployed is 5 months (hence, monthly in the economy 1/5 or 20% of the unemployed find work, i.e. f = 0.2), then the sustainable unemployment rate will be u = s / (s + f) = 0.0125 / 0.2125 = 0.0588 or approximately 5.9%.

Actual unemployment may exceed its natural level. This occurs during a downturn (recession) in the economy. Unemployment caused by a recession is cyclical unemployment. On the business cycle graph (Fig. 1), this situation is represented by point D, in which actual GDP is less than potential. This means that there is underemployment of resources in the economy, i.e. the actual unemployment rate is higher than the natural rate. In modern conditions, the existence of cyclical unemployment is associated both with the insufficiency of aggregate expenditures in the economy, i.e. both a reduction in aggregate demand and a reduction in aggregate supply.

The actual unemployment rate is calculated as a percentage of the total number of unemployed people to the total labor force or as the sum of unemployment rates of all types (frictional, structural and cyclical): . Since the sum of the levels of frictional, structural and involuntary unemployment is equal to the natural level of unemployment, the actual level of unemployment is equal to the sum of the natural level of unemployment and the level of cyclical unemployment: u actual = u* + u cycle.

Voluntary and involuntary unemployment

The interpretation of the nature of unemployment in different macroeconomic models is different. Thus, representatives of the classical school believed that the reason for the existence of unemployment is the reluctance (refusal) of workers to work for the wage rate offered to them. And since workers themselves condemn themselves to an unemployed state, then in the classical model unemployment is voluntary. In modern conditions, their followers - supporters of the neoclassical trend - believe that voluntary unemployment exists, and for the same reason, and include it in frictional unemployment, and therefore in the natural level of unemployment, understanding by the natural level of unemployment the level at which equilibrium is ensured in the labor market (demand for labor is equal to supply of labor), i.e. people who want to work for the equilibrium real wage rate sooner or later find work, and this is a process natural to the functioning of any economy.

However, unlike their predecessors, representatives of the neoclassical school recognize that some of the unemployment is involuntary, calling it wait unemployment. The cause of unemployment expectation is disequilibrium in the labor market associated with the establishment of the real wage rate at a level above the equilibrium market level (at which the demand for labor is equal to the supply of labor).

At the wage rate (W/P) 0 (Fig. 3), the labor market is in equilibrium at the level of full employment of the labor force (Lf). However, if the wage rate is set at (W/P) 1, then the supply of labor L1 will exceed the demand for labor, and only the number of workers equal to L1 will be hired. The difference between L1 and L2 will be expected unemployment, which can disappear only when the wage rate is again equal to the equilibrium (W/P) 0.

The reasons for unemployment waiting and wage rates “sticking” above the equilibrium level (wage rigidity) are:

The activities of trade unions and the signing of collective agreements, which stipulate the wage rate, below which entrepreneurs do not have the right to hire workers. A trade union is an association of workers that is involved in collective agreements with employers (firms) regarding wages and working conditions. If the union and the firm cannot reach an agreement, the union may go on strike and stop providing labor services to the firm. Because of the threat of a strike, unionized workers earn 10-20% more than non-unionized workers. The union provides benefits to insiders (members) at the expense of outsiders (non-members). When a union pushes for a wage increase that rises above the equilibrium wage, the result is unemployment among both insiders and especially outsiders.
Legislative establishment by the state of a minimum wage rate, which serves as a lower limit for the rate when hiring. Since the equilibrium wage for most workers exceeds the minimum wage, this circumstance affects the unemployment rate only among low-skilled workers or among teenagers without experience and work skills.
Widespread theory of incentive (or efficiency) wages. The fact is that entrepreneurs themselves are not interested in lowering the wage rate and can deliberately keep wages above the equilibrium in order to retain their best and most productive workers. The efficiency wage is similar to minimum wage laws and labor unions in that in all three cases unemployment results from the wage rate being set above the market equilibrium. However, the difference between efficiency wages is that they are voluntarily paid by firms.

There are 4 reasons why firms may find it efficient to pay wages higher than the equilibrium wage.

Worker attrition (labor turnover) can be reduced by paying them higher wages because workers will find it difficult to find alternative work at a higher rate. It is profitable for firms to reduce layoffs of workers because there are costs associated with hiring and training new workers and because new workers do not have the necessary experience, knowledge, and skills and are much less productive than experienced workers.
The productivity (zeal) of workers can be increased with higher wages. Since workers' diligence is not easy to control, workers may shy away from performing their duties conscientiously. This phenomenon is called moral hazard or the risk of unscrupulous (opportunistic) behavior and demonstrates the problem of asymmetric information. Workers (agents) know their own diligence and quality, but firms (principals) do not. Paying workers low wages can lead to workers putting in little effort and being dishonest about their work. Once caught and fired, workers earning the equilibrium wage rate can easily find another job at the same rate. Higher wages can make workers stick to their jobs and work harder.
The quality of workers (labor) can be improved by paying them higher wages. Firms cannot accurately measure the quality of workers applying for hire. Each worker imagines the minimum amount for which he agrees to work (this value is called the reservation rate). The higher the quality (qualification) of workers, the higher this amount. If a firm sets a low wage rate, this will result in skilled workers not applying to such a firm to be hired because their reservation rate, in their estimation, is higher than the wage rate that the firm is offering them, and asking Low-skilled workers who have low self-esteem (low reservation rate) and therefore agree to work for low wages will apply for employment in such a company. This phenomenon also serves as a form of information asymmetry and is called negative (or adverse) selection. By paying above-equilibrium wages, firms are more likely to attract higher quality (more skilled and productive) workers.
Workers' health will be better and therefore their productivity and productivity will be higher if they are paid higher wages. Higher paid workers eat better and are more productive. This argument is most relevant to firms in developing countries.

Thus, representatives of the neoclassical direction identify: unemployment associated with job searches (search unemployment), in which the labor market is in equilibrium, which constitutes the natural rate of unemployment and which includes:

voluntary unemployment associated with the refusal of workers to work for the wage rate offered to them and causing the search for work at a higher rate
frictional and structural unemployment associated with job loss and people being “between jobs” or with their first appearance on the labor market
involuntary unemployment (wait unemployment) associated with labor market imbalance (excess labor supply) caused by the establishment of the real wage rate at a level higher than the equilibrium market level (at which the demand for labor is equal to the supply of labor), which is explained by institutional reasons (minimum wage laws, trade union activity and efficiency wage theory) and the expectation of a “equalizing” labor market.

Representatives of the Keynesian trend in economic theory deny the possibility of voluntary unemployment and believe that unemployment is involuntary, due to the insufficiency of aggregate expenditures, i.e. aggregate demand, which leads to a decline in the economy, to a recession. Thus, only cyclical unemployment is considered as forced unemployment in the Keynesian model.