Unemployment

When a resource is not being used in conjunction with other resources to produce either a tangible or intangible product, it is said to be idle or unemployed. Unemployment may be either voluntary or involuntary.

Unemployment is a state in which any type of productive resource or factor of production, for example, labor, land, capital, or entrepreneurial ability, may find itself, although the social problem of unemployment is considered more acute for labor than the other resources. Consequently, governments and private sources collect and report more information with greater frequency on the employment status of labor than the other resources, and governments often design and implement policies to reduce unemployment of labor.

Statistics are calculated and reported on capital employment, which is provided in terms of “capacity utilization” rates and land-use data are also kept. [Page 2133]Determining the state of employment or unemployment of machinery and land is problematic given their multiple uses and the need for repair, replacement, and regeneration. Government policies can also enhance and encourage the use of capital and land and make some use choices more or less favorable—for example, through land-use zoning laws.

Due to problems of measurement, an unemployment rate for entrepreneurs or others self-employed does not exist. Measuring and observing entrepreneurial ability and capacity independent of the individual involved are currently impossible.

Treating unemployment as a yes-no or binary variable may also obscure the fact that some resources at some time may be underemployed—that is, working, but either not in their preferred field or occupation or not working for the number of hours per week they would prefer, or both.