Econ 100 Group 6
How to tackle the
unemployment
problems in Hong
Kong?
Introduction
What is unemployment?
 Unemployment rate
pool of unemployed people
=
Labors force

Voluntary unemployment
Involuntary unemployment
3 major unemployment :
Structural , Frictional , Cyclical
Unemployment situation in HK
Unemployment rate


Unemployment
 Recovery after economic storm
 Unemployment rate decreased
 2005 : the unemployment rate went down to
5.6%
Underemployment
 2004 : 3.3%  2005 : 2.8%
 most affected by underemployment
less educated and lower-skilled workers
Unemployment rate
Seasonally adjusted unemployment rate
Underemployment rate
8
6
4
2
Q3
20
05
Q1
20
05
Q3
20
04
Q1
20
04
Q3
20
03
Q1
20
03
Q3
20
02
Q1
20
02
Q3
20
01
Q1
0
20
01
Percantage
10
By education
higher educational levels
lower unemployment rate
 tertiary education : 3.2%
 lower secondary education or
below : 8.5%

By skills
higher-skilled workers
lower unemployment
higher-skilled workers : 2.4%
less-skilled workers : 6.4%
By occupations
By Gender
unemployment rate (%)
Unemployment rate by gender
10.0
8.0
6.0
Male
4.0
2.0
Female
0.0
2000
2001
2002
2003
year
2004
2005
By age
unemployment rate (%)
Unemployment Rate by Age
40.0
15-19
30.0
20-29
20.0
30-39
10.0
40-49
0.0
50-59
2000
2001
2002
2003
Year
2004
2005
60 or above
Compare the Unemployment rate with other
countries
Rank
Country
Unemployment rate
(%)
Date of
Information
1 Andorra
0.00
1996 est.
2 Norfolk Island
0.00
NA
38 China
4.20
2004
40 Taiwan
4.20
2005 est.
42 Japan
4.30
2005 est.
44 United Kingdom
4.70
2005 est.
45 Macau
4.80
2004
49 United States
5.10
2005
55 Hong Kong
5.80
October 2005
92 European Union
9.40
2005 est.
Structural Unemployment
Cause of Structural
Unemployment


Changing in relative demands and
supplies in different sectors and
industries
Mismatching between the
unemployed skill labour and the jobs.
Cures for structural
unemployment
Stabilizing the relative demand and
supply of different industries and
sectors



Reduce and lower the speed of
structural changes of the economy
Concentrate to develop a structure of
economy
Government should help enhance the
stability of structure in a country
Providing retraining
programme






Due to the changing economy structure
Mismatch of labour skill exists
Unemployment rate will increase
Government provides some retraining
programmes
Help labour to find a new job
Reduces the unemployment rate
Interactive Selective
Placement Service





As disabled people are difficult to find a
job
The number of unemployed people will
rise
Government provides free recruitment
service to employers and free employment
service to job seekers who are disabled
Help them to find a job more easily
The unemployment rate will thus fall
Interactive Selective
Placement Service





It is helpful to the disabled people
But, the amount of them is too small
Even though the unemployment will be
improved
The change of percentage is not
obvious
It is not an effective method to reduce
the unemployment rate
The Youth Pre-employment
Training Programme




The unemployment rate of teenager is high
The programme provide school leavers aged
between 15-19 with a comprehensive range
of employment–related training, workplace
attachment, etc.
Enhancing the employability of them
Decrease the unemployment rate
The Youth Work Experience
and Training Scheme




It provides on-the-job training of 6 to 12
months for young people aged between
15 and 24 with education attainment
below the degree level
Trainees can also enjoy employment
support and off-the-job training allowance
Improve the employment of the
youngsters
The unemployment will fall
Results






These two programmes are decided for the
youth
The target is to reduce the unemployment of the
them
However, these two schemes are failed to
achieve the goal
The major reason is that the economy is at
recession
Even improve the skills of the teenagers
it still can’t solve the problem of unemployment
Upgrading the general
education level






In the recent years, the economy structure of
Hong Kong is changing
The skills of most labour can’t match the need of
new industries and firms
The unemployment rate will increase
But, upgrading the general education level of
public can help them to have better knowledge
Their occupation mobility will be improved
As a results, the unemployment will be reduced
Upgrading the general
education level




During the economy structure changes,
the unemployment rate will be pushed up
The higher the education level of the
public, labour can have higher occupation
mobility
worker can be easier to find a job in other
sector
Unemployment rate will decrease
Frictional unemployment
Cause of Frictional
Unemployment


Dynamics of the labour market flow or the
normal turnover of the labour market
Some pool of temporarily, transitionally
unemployed workers is unavoidable
Cures for Frictional
Unemployment
Labour Department




Labour department providing the information of
labour market such as the latest vacant of
different companies
Increasing the information flow
The time of matching people with the job will be
decreased
The time of searching a new job has been
reduced and lower the frictional unemployment
rate
Conclusion
1) Workers with higher education level have
lower unemployment rate
• Upgrade general education level
2) Unemployment rate still high among the
skilled workers
• Provide re-training programe
3) Frictional unemployment
• provide more information for labor