Short & Long-Term Unemployment and Labor Force Participation
Long-term and short-term unemployment is both incredibly important and relevant to social issues, influencing the lives of the population, the economy, and the policies in any given country. For the purposes of further discussion, distinguishing between long-term and short-term unemployment is necessary. If an individual is unable to find work for a period longer than 27 weeks, they are considered to be under long-term unemployment. Many factors are responsible for both increasing and decreasing the unemployment of the American population, including labor force participation. The term refers to the percentage of the population that is able to work.
An increasing rate of labor force participation contributes to the decrease in unemployment, as more individuals physically able to work have had the opportunity to find employment. As noted in the article, “The increasing labor force participation of older workers and its effect on the income of the aged.” the amount of older people working has been on the rise since the 1990s, which has improved the total amount of money in circulation in the population. This means that increasing the labor force participation through methods mentioned in the paper, such as policy, is effective in reducing the level of unemployment in the country. Another factor that has a major influence on long-term and short-term unemployment is prices on natural resources, such as oil. In a study devoted to the subject, Mohamad B. Karaki finds that fluctuations within the pricing of oil have significant correlations with unemployment in the US. The author notes that supply shocks in the oil industry are connected with an increase in unemployment, while demand shocks are shown to increase employment rates. Depending on the industry and the resources, market changes can either be quick or long-lasting.
The observation, in a more general sense, shows that the price of resources and fluctuations in supply and demand can affect both long-term and short-term unemployment. People of different demographics contribute to the need to address unemployment, with both the younger and older generations being affected by this issue. For the elderly, unemployment can affect their health and well-being, as well as to decrease successful retirement opportunities. In regards to the newer generation, an inability to find a job severely affects their ability to become independent members of society and start a family, which affects the longevity of the population. To keep in mind the needs of both young and old, unemployment needs to be combatted, developing new approaches to addressing the issue.