ECO 403 GDB Solution
Semester 2011
Unemployment is an economic problem as well as a social issue.
It affects the living of all the people in a society whether they are
young or old, educated or uneducated, skilled or unskilled. Why
unemployment is increasing day by day in Pakistan? Write down at
least one reason.
Answer:
Unemployment is increasing day by day in Pakistan due to many
reasons. Reasons are job search and wage rigidity in the country.
*Job search:
1. Workers have different abilities and preferences.
2. Jobs have different skill requirements.
3. Geographic mobility of workers.
4. Flow of information is imperfect.
*Wage rigidity:
1. Minimum wage laws.
2. Labor unions.
3. Efficiency wages.
- Sectoral shifts.
- Unemployment insurance (This is for European countries)