1. What is unemployment of labour?.
    (b)With an example each, explain the following types of unemployment:
    (i)frictional unemployment;

    (ii)  structural unemployment;
    (iii) seasonal unemployment.
    (c)Outline any four causes of unemployment in a country.


This question was also quite popular with the candidates. Candidates were required to define unemployment of labour, explain some types of unemployment with relevant examples and outline four causes of unemployment in a country in the (a), (b) and (c) parts of the question respectively. Most candidates could define unemployment of labour and explain some types of unemployment in the (a) and (b)  parts of the question but only few of them were able to adequately explain the causes of unemployment in the (c) part of the question. Candidates were expected to answer thus to score maximum marks in this question.


(a)       Unemployment of labour is a situation where individuals in the labour force who are willing and able to work at the existing wage rate cannot find jobs. 


(b)(i)Frictional unemployment – this form of unemployment exists as workers search for jobs of their choice having left their previous jobs or when school leavers enter the labour market from school e.g. a fresh graduate who has completed school and is looking for a job.  


(ii)   Structural unemployment – this form of unemployment occurs when there are changes in the pattern of demand or production resulting in labour lay-off. A change in technology can also result in structural unemployment. e.g. if an organization begins to use computer, a stenographer who can only type using the traditional typewriter will become unemployed.                  


  (iii)   Seasonal unemployment – This form of unemployment occurs when there is a fall in demand for a certain product at a particular time of the year e.g. during the rainy seasons, masons become unemployed and sellers at the school canteen become unemployed during vacation.

(c)(i)    As a measure of value/unit of account:- During inflation, prices rise rapidly so money Loses value. Therefore money ceases to be a good measure of value as its value becomes unstable.

(ii)    As a standard for deferred payments: - Goods sold on credit are paid for in future with money. During inflation, this function is affected as money loses value with time.Credit sales are discouraged.

(iii)   As a store of value: - During inflation, money stored or kept now will lose value in future. So people prefer to store their wealth in other forms.

(iv)   As a medium of exchange:- During inflation, money loses its value. People lose   confidence in money and may prefer other commodities as medium of exchange.

(c)(i) The seasonal nature of some jobs e.g. farmers become unemployed during the dry season and masons during the wet season.
     (ii)Inadequate education and skills due to termination of education after the basic level and non – acquisition of skills, make people unable to enter certain professions.
     (iii)If plants and machinery installed are under – utilized due to inadequate raw materials, poor power supply and limited market, unemployment will arise.
     (iv)rbanisation: a drift of people from the rural to urban centres due to neglect of agriculture creates unemployment.
    (v)dvancement in technology can lead to unemployment if the skills of labour are not upgraded.


   (vi)If population grows rapidly, surplus labour which cannot be absorbed by the economy will be unemployed.
(vii)   If people lack information about the job market, they will be unemployed because they    may not be aware of job opportunities elsewhere.

(viii)Government policies like retrenchment, privatization of state enterprises and poor development plans can lead to unemployment.
(ix)If the level of government expenditure increases but is not geared towards investment,   there will still be unemployment.

(x)Adoption of labour-saving devices or capital- intensive method of production can lead to unemployment.

(xi)Inappropriate educational curriculum resulting in the non-acquisition of relevant skills for  the labour market leads to unemployment.