Consequences of Unemployment (Cambridge International IGCSE Economics)

Spec point — The consequences of unemployment for the individual, firms and the economy as a whole.

Consequences of Unemployment

• The effects of unemployment, especially long-term unemployment, are extremely damaging

  • There are impacts on the individual, the economy, the government, and firms

Long term unemployment affects individuals, the economy, government, and firms

• Government's receive less tax revenue & have higher expenditure in the form of welfare payments
• Individuals suffer significant emotional, relational & financial consequences
• Firms may find it harder to find workers to employ (as they have moved on) once the economy starts to recover
• The economy contracts as there is a higher level of inefficient use of available resources