The unemployment rate is an indicator that, in the Economy, allows us to know the unemployment rate, that is, the number of people who, having the necessary conditions of age, health, and willingness to work, are not currently occupying a job. So it is very important to calculate the Unemployment Rate.
In other words, this rate is the economic index that shows what is the percentage of unemployment of the economically active population of a country or a society.
Thus, it can be inferred that the unemployment rate allows determining the number of people who have the condition to be employed in a job and are actively looking for it, but who are still unemployed.
Knowing the level of unemployment in a country is extremely important in any country since it will allow designing and developing the necessary measures to minimize this rate and provide support to the population that manifests this condition.
This is a term that usually varies according to the definition given to the concepts of occupation and unemployment, in the same way, it is also determined by the way in which each country collects the data for its calculation, but generally its variation not very relevant.
Causes and consequences of unemployment
Before knowing its formula and explaining how it is applied, it is important to know what are the causes of unemployment for people with conditions necessary to work, these are:
Each one of these causes makes a socioeconomic problem in the country and even in the region, which, if not properly and timely addressed, can generate serious consequences.
In the economic field, it can generate an unnecessary waste of scarce and very valuable resources, in the social aspect, the problem can include family matters, which include a feeling of suffering, pain, and discomfort, due to the impotence of not obtaining sufficient income to maintain the quality of life they want or expect.
Types of unemployment
However, these conditions can generate various types of unemployment, including the following:
Calculate the Unemployment Rate
This indicator is calculated very easily, it only requires identifying the following values:
The sum of both values makes up the value of the economically active age population, or Active Population.
Formula to calculate the unemployment rate
The formula to calculate the unemployment rate is:
Unemployment Rate = (No. Unemployed / No. Active Population) * 100
For example, for:
No. of Employed Workers: 35,000,000
Active Population Number: (10,000,000 + 35,000,000) = 45,000,000
Applying the Formula to Calculate the Unemployment Rate
Unemployment Rate = (10,000,000 / 45,000,000) * 100
Unemployment Rate = (0.2222) * 100
Unemployment Rate = 22.22%
In other words, 22.22% of the population of this country is unemployed, while 77.78% have active work.