NAME & SURNAME :
STUDENT NUMBER :
MODULE CODE : OTE2601
TASK TYPE : EXAM
DATE : 15/09/2021
, Question 1
1.1. Unemployment has both individual and social consequences that require public policy
interventions. For the individual, unemployment can cause psychological distress, which
can lead to a decline in life satisfaction. It can also lead to mood disorders and substance
abuse. Some people even have to sell their homes and/or their personal possessions. It is
therefore clear that unemployment has a bearing on the individual and his or her family
Unemployment can affect one’s social status ascription as well, which manifests through
stigmatisation, labelling, unfair judgement, and marginalisation. When unemployment rates
are high and steady, there are negative impacts on the long-run economic growth.
Unemployment wastes resources, generates redistributive pressures and distortions,
increases poverty, limits labor mobility, and promotes social unrest and conflict.
Below I have emphasized the consequences of unemployment in three parts:
Individual: People who are unemployed cannot earn money to meet their financial
obligations. Unemployment can lead to homelessness, illness, and mental stress. It can
also cause underemployment where workers take on jobs that are below their skill level.
Social: An economy that has high unemployment is not using all of its resources
efficiently, specifically labor. When individuals accept employment below their skill level
the economies efficiency is reduced further. Workers lose skills which causes a loss of
human capital. Unemployment has a negative effect on people’s perception of the
success of the market economy.
Socio-political: high unemployment rates can cause civil unrest in a country. The
microeconomic consequences of unemployment are also serious. Unemployment
means that someone without work and without an income is dependent on someone
else. During periods of unemployment not only are laborers idle, but machinery and
equipment also stand idle. This also affects suture production.
STUDENT NUMBER :
MODULE CODE : OTE2601
TASK TYPE : EXAM
DATE : 15/09/2021
, Question 1
1.1. Unemployment has both individual and social consequences that require public policy
interventions. For the individual, unemployment can cause psychological distress, which
can lead to a decline in life satisfaction. It can also lead to mood disorders and substance
abuse. Some people even have to sell their homes and/or their personal possessions. It is
therefore clear that unemployment has a bearing on the individual and his or her family
Unemployment can affect one’s social status ascription as well, which manifests through
stigmatisation, labelling, unfair judgement, and marginalisation. When unemployment rates
are high and steady, there are negative impacts on the long-run economic growth.
Unemployment wastes resources, generates redistributive pressures and distortions,
increases poverty, limits labor mobility, and promotes social unrest and conflict.
Below I have emphasized the consequences of unemployment in three parts:
Individual: People who are unemployed cannot earn money to meet their financial
obligations. Unemployment can lead to homelessness, illness, and mental stress. It can
also cause underemployment where workers take on jobs that are below their skill level.
Social: An economy that has high unemployment is not using all of its resources
efficiently, specifically labor. When individuals accept employment below their skill level
the economies efficiency is reduced further. Workers lose skills which causes a loss of
human capital. Unemployment has a negative effect on people’s perception of the
success of the market economy.
Socio-political: high unemployment rates can cause civil unrest in a country. The
microeconomic consequences of unemployment are also serious. Unemployment
means that someone without work and without an income is dependent on someone
else. During periods of unemployment not only are laborers idle, but machinery and
equipment also stand idle. This also affects suture production.
