Question

Write a paragraph.

What are the costs of a high unemployment rate? Do you think providing more generous government benefits to the unemployed would increase these costs, reduce these costs, or leave them unchanged?

Answer 1

Unemployed individuals not only lose income but also face challenges to their physical and mental health. Due to loss of income an unemployed person is unable to fulfill basic necessities of food,. Clothing and shelter in the worst cases. Also it affects the future prospects. A person who remains unemployed for long may find it difficult to find job in future. Societal costs of high unemployment include higher crime and a reduced rate of volunteerism. Governmental costs go beyond the payment of benefits to the loss of the production of workers, which reduces the gross domestic product (GDP).

Providing more generous unemployment benefits will increase these costs. This is because a person will become lazy to find a job due to generous Unemployment benefits. He may become more choosy in finding a job as per his requirements. All this will increase the unemployment rate in the economy thus increasing the different costs associated with it. Also such benefits put additional burden on government by increasing expenditure. No doubt these benefits are of great help during recession. These benefits stabilize economy during recession by boosting aggregate demand. To conclude these benefits must be provided in limits.