A. In their 2009 working paper Unemployment, Market Work and Household Productio

Question

A. In their 2009 working paper Unemployment, Market Work and Household Production, Michael Burda (Humboldt University, Germany) and Daniel Hamermesh (University of Texas) examined how U.S. workers who lost their jobs between 2003 and 2006 spent their time. They discovered that, during the period they were unemployed, the decline in the number of hours of paid word done by these workers was almost the same as the increase in the number of hours these workers devoted to household production. Do Burda and Hamermesh's findings allow us to draw any conclusion about whether total production in the economy--whether that production is included in GDP or not--fell when these workers became unemployed? Hint: Does your answer depend on whether the household production they carried out while unemployed involved activities that the workers had been paying other people to perform they lost their jobs, e.g., child care?

Explanation / Answer

The unemployed may shift to another profession or another work, but it cannot give them 100% positive result.

Assume that I am an Engineering graduate, if I failed to get a job which suits my qualification, I may find any work which paid minimum salary to me.

In the same way, if I got a job which suits my profession I may get a monthly salary of at least $50000,

Now, if I shift to another work I may be paid $15,000 or $20,000 per month.

This is also called as under employment, which is also danger like unemployment.

These types of activities are better in short term, but in long term they won’t work.

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