Unemployment In Colombia And The Welfare Of The Population

Unemployment in Colombia and the welfare of the population

Analysis of macroeconomic behavior of unemployment in Colombia in the last five years

Introduction

One of the main problems in the Colombian economy and that occupies more importance in governments for time, is the high unemployment. As a country we must face different economic, political and social problems, and it is important as citizens not to be oblivious to these; Among them are poverty, corruption, discrimination, drug addiction, human rights violation, youth crime and finally unemployment. With unemployment we refer to what is presented when the proportion of financial and technical equipment and resources with which we have as a country are not enough to provide the use of all the force of free work. In this work we want to investigate the relevance of this variable for the economy of our country and we want issue by the authorities of the Nation.

General objective

Study the variable of unemployment in the last five years in Colombia, through research and analysis, to understand how it is affected by different situations and direct or indirect decisions to it.

Justification

We chose the unemployment variable due to our little closeness to the issue and the great importance at the macroeconomic level in our country, we think it is an issue that has the perception that it has little or zero relevance for young people like us at this time, by The reason we usually feel external and zero involved in its transcendence, but on the contrary, we know that it has a great weight about our daily life and therefore we want to get involved and learn about the affectation of this variable in our economy.

Importance of the variable

The unemployment variable is of great importance around the world and in Colombia, since it reflects the well -being and stability of families, rather than economic activity, this variable is also important since it affects parafiscals, capital taxes , among others. In the same way, it is important to have knowledge about formal and informal works, since these affect social security, health coverage and social consideration, in summary, unemployment is a variable that strongly affects the economy; And the greatest reason for what it does is because if there is no market where people offer services, unemployment could not exist.

As a society and more if we are employees we become oblivious to this variable and we believe that it does not affect us at all when in reality if it does and more than all in the long term, so it is important to raise awareness about this and be clear about what forms We could be affected.

Literature review

As for Colombia, it is known that there is an opposition between two specific theories, and each of them has been the authoritarian approach at the time. The dominant approach during the decades that the ISI policy lasted (industrialization by import substitution); It was the structuralist, and was protected by economists such as Albert Hirschman, Wassily Leontief and Raúl Prebisch. Then, as that policy was disarming, the neoliberal approach that proclaimed the Washington consensus was adopted, and this was supporting the neoclassic theory. However, what is promptly what the neoliberal approach means? Santiago Bonilla Cárdenas 102 Society and Economics No. 20, 2011 pp. 99-124 According to Borjas (2002), neoclassical theory establishes that unemployment can be basically 3 types: friction unemployment, seasonal unemployment and structural unemployment.

Frictional unemployment does not have to generate major concerns since it is obtained because workers and firms need some time to be located in a mutual way and get to “click”. Seasonal unemployment is predictable for some sectors of the economy in what, in definite period of the year, companies fire workers for the little demand of their product in that season.

Similarly, after the “unemployment season” occurs, workers return to work in companies. Structural unemployment, which we cannot confuse with the causes of unemployment suggested by the structuralist approach itself, is what is caused either because workers do not have the qualifications desired by companies, or because there is a gap between the number of workers that seek employment and vacancies that companies provide, so that the market does not find balance since the salary is rigid and there is no way to adjust down. In other words. So to reduce the unemployment rate it is essential to make that market more flexible. Therefore, with the right price, the labor market will be balanced.

Opposite the previous vision are the economists of the structuralist approach, that approach implants that the level of employment of a country depends directly on the level of structural development obtained by it, and therefore the level of diversification that presents.

Leontief (1963) is the first to discover a link between the economic structure of a country, measured in terms of the input-product matrix of this, and its level of economic development. His proposal showed that the greater the productive diversification, the greater the fortune of the country, and in the same way the level of employment. Likewise, economists such as Prebisch (1963) and Hirschman (1958) propose that in order to achieve the desired economic growth, a country should overcome exponentially the different stages of structural development with the ultimate goal of ceasing to be a manufacturer of goods ends which does not have a greater degree of complexity to become a widely diversified economy and that all the parties that make up the production chain are connected and articulated among themselves that produce not only final goods but also complex goods such as capital goods for Achieving this is essential that the industrial sector grow because this sector is responsible for an important number of externalities that have to do with the use, appropriation and creation of knowledge and generation of new technologies which largely facilitates that the aforementioned sector becomes leader in the economy, the structuralists argue that the pro Development process directly affects the variable of unemployment since this growth implies a demand for labor that triggers more jobs for population which in turn strengthens domestic demand and simultaneously serves as a solid base that supports growth From GDP, therefore a level of poor development in the structure of production of a country causes it to stop using a large extent available labor in that economy finally generating unemployment (a neighboring analysis and economy no analysis and economics do not. 20, 2011 pp. 99-124 103) In this situation, the low income from families generates a demand deficit on production and seeing this situation is often considered mistakenly measures that make the labor market more flexible when the true cause is much deeper and is of Structural character. Sarmiento (2005) is a renowned professional in economy who states that the above is exactly what has been happening in Colombia, the stiffness present in the Colombian labor market, says Sarmiento, led to the fact that measures were taken that eventually deteriorated even more the rate of employment additionally proposes that labor flexibility is present in salary falls that end that aim with the objective of encouraging demand is taken

 Theoretical framework

Anatomy of unemployment

Investigations on the labor market have revealed five key characteristics of unemployment:

• Unemployment rates vary greatly from some groups according to age, sex and experience
• There is a high rotation in the labor market. Employment and unemployment input and output flows are high in relation to the number of employed or unemployed.
• A significant part of this rotation is cyclical: temporary employment suspensions and layoffs are high during recessions and voluntary casualties are high during expansions.
• Most people who are unemployed in any month only remain unemployed for a short time.
• Most of the unemployed are people who will remain in that situation for a long time.

The unemployment rate and the time of permanence in unemployment

• This permanence is the sum of the unemployment periods, which is calculated from people who experience more than one unemployment period per year. It is important to mention that unemployment is a serious problem when it only affects a few people intensely, instead of affecting only many more people, so unemployment is a serious problem. It should be noted that the unemployment variable in time measurement varies from some groups to another, lengthening even more with age, but on the contrary, unemployment is much higher in the case of young people, than in that of adult people ; Since young people tend to be unemployed for shorter times, while adults remain unemployed for longer times, although it is important to point out that most young people are actually studying or looking for a short -time employment.

Reduction of the natural unemployment rate

• This focuses attention on the highest unemployment rates of adolescents and on the very high proportion of unemployment corresponding to long -term unemployed.
• Many of the young people are people who first enter the active population, this group is also more likely than adults to be people who re -enter into the active population. Therefore unemployment in adolescents could be reduced if the time it takes to find the first job is shortened. According to the above to limit this time, the creation of a youth job has been suggested that will help people who finish the studies to find jobs. Most young people enter and leave the active population, due to the little attraction of certain jobs.

The National Administrative Department of Statistics (DANE) makes known every month the employment conditions of Colombians, the unemployment and occupation rates of the country. The information is collected through the great Integrated Household Survey (GHG), for this the DANE surveyrs visit more than 230.000 homes in 32 capitals and more than 30 municipalities. The main concepts used in this survey follow the guidelines of the International Labor Organization (ILO), the survey allows each of the people of these homes in groups according to their age and activity:

• Population of working age (PET): all the people of the 12 years on the urban area and from 10 years and older in La Rural.
• Economically active population (PEA): Here are two groups, the unemployed population (PD), who are looking for employment and the employed population (PO), which are the people of working age and who are currently doing so. The group of employed must meet any of the following characteristics: that it has worked for a third party for at least one hour with or without remuneration in the week prior to the application of the survey, that they have not worked in that same week of reference, but They did have a paid job.
• Economically inactive population (PEI): People who did not work in the last week, nor are they employed, are available or interested in working. Here are the students, pensioners, retired, people who make home offices, those with permanent disabilities to work or who do not want to work.

Characterizing the respondents and placing them in each of the previous groups, unemployment and occupation rates are calculated, the rates are the relationship of two magnitudes such as the PEA and the PET, thus, with the information obtained from the survey, these are related Magnitudes.

Unemployment rate = (pd / pea) * 100

Occupation rate = (po / pet) *100

 Quantitative description of the variable

The deterioration presented by the current labor market in Colombia is a variable that continues in decline and worries experts from different areas since it completes this year five consecutive months (January 2019 to May 2019) with two -digit figures.

During April of this year, the unemployment rate reached 10.3% nationwide, which represents a significant increase against 9.5% of the same month in the previous year (April 2018), this triggered a fall in the Global participation rate that happened to be 64.2% to 62.2% these analyzes lead to Colombia.000 jobs in the 2018-2019 annual period.

The urban unemployment rate measured in 13 metropolitan areas of Colombia presented levels of 11.1%, but this is not all, the occupancy levels fell in all regions, it must be taken into account that the issue of unemployment is very complex of Address since different variables such as gender and age discrimination play it, the unemployment rate in women reached the worrying figure of 13% and that of men 8.4%, the youth touches the high figure of 18.5%.

In Colombia, according to the DANE figures, there are 9 million people are in the underemployment category and there are more than 2 million unemployed according to statistics of the last year, for the entity the highest reduction of jobs occurred in the sectors of agriculture, hunting and Fishing with a decrease in the number of employees of more than 327.000 people, the highest unemployment rate was presented in cities such as Quibdó (20.8%), Armenia (18.1%) and Florence (17.3%). In others such as Cúcuta, Bogotá and Barranquilla, with strong levels of migration, unemployment figures are 15.9%, 11.9%and 8%, respectively.

In Antioquia the unemployment rate reached 13.5%, in the same period last year the unemployment was at 11.5% which implies that in a few years the figure increased around 2 points which is very demotivating because it translates In thousands of unemployed people.

For the month of August 2019, the unemployment rate at the national level was 10.8% had an increase of 1.6 points, the global participation rate was reduced 1.2 points located at 62.9% and finally the rate of occupation was 56.1% with a decrease of 2.2 points The figures are with respect to the same period of the previous year, the global participation rate was 65.3%, and the occupation rate was 57.9 %. Compared to August 2018, these rates were 65.7% and 59.1%, respectively. (Source: Dane

Information of September 30, 2019)

 Conclusions

It has become visible in the unemployment rate in Colombia, a wide capacity for change, since the unemployment variable is of great importance around the world and in Colombia, since it reflects the well -being and stability of families, plus that economic activity is also important this variable since it affects parafiscals, capital taxes, among others.

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