Republic of the Philippines

Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

EFFECTS OF UNEMPOYMENT RATE ON ECONOMIC DEVELOPMENT DUE TO CIRCUMSTANFCES:

AN ANALYTIC STUDY IN THE PHILIPPINES

A Research Paper
Presented to
Mrs. Odessa Bulalacao

In partial fulfillment of the requirements in

Practical Research I
Science, Technology, Engineering and Mathematics

Alamo, Jerson
Villamer, John Geneses
Ampongan, Arianne
Casili, Arden Elizabeth
Estanislao, Princess Mae
GRADE 11-STEM V

JUNE 2021
 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

INTRODUCTION
Employment is an important part of the economic, social and environmental

development process and procedure of any country, it is considered as a basic need

because it allows a person to earn money to meet basic human needs (food, housing,

clothes). People have experienced a variety of issues as a result of their inability to

work. Some of the issues associated with unemployment include crime and prostitution,

as for example.

Unemployment, indicated as joblessness, occurs when people are without work.

It is a situation where a person or a group of people who are seeking for a job but does

not get any work or job. There are some causes of unemployment such as increase in

population, slow economic development, and increase of poverty levels. Most of the

countries all over the world suffers from the unemployment. It occurs when a person

who is actively searching for employment is unable to find work. It is also often used as

a measure of the health of the economy. When unemployment rates are high and

steady there are negative impacts on a long run economic development.

Unemployment is a major source of concern for governments because it incurs

additional economic and social costs, such as social security payments. The political

leadership of every country has to deal with an unemployment problem since it leads to

low quality of life, social, political and economic ills. These economic ills meant to be

that
 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

unemployment wastes resources, generates distributive pressures, and distortion

increases, poverty, limits labor mobility, and promotes social unrest and conflict.

There are some causes of unemployment such as increase in population, slow

economic development, and increase of poverty levels. Most of the countries all over

the world suffers from being having no work. Unemployment occurs when a person who

is actively searching for employment is unable to find work. It is often used as a

measure of the health of the economy.

The impacts of unemployment on families include poverty and hardship, strained

relationships, poorer health (although the causal relationships are not always clear), and

housing stress. Unemployment could also harm children's development and

employment futures. Low unemployment is usually regarded as a positive sign for the

economy. A very low a rate of unemployment, however, can have negative

consequences, such as inflation and reduced productivity.

Unemployment adversely affects the disposable income of families, erodes

purchasing power, diminishes employee morale, and reduces an economy's output. The

unemployment rate provides insights into the economy's spare capacity and unused

resources. Unemployment tends to be cyclical and decreases when the economy

expands as companies contract more workers to meet growing demand. Unemployment

usually increases as economic activity slows.

 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

When unemployment rates are high and steady there are negative impacts on a

long run economic development. It leads to poverty, a decrease in economic

development, low earning capacity of the poor, and limited access to regular and

productive jobs. A very low a rate of

unemployment, however, can have negative consequences, such as inflation and

reduced productivity. The unemployment rate is the proportion of unemployed persons

in the labor force. Behind these are the interconnected root causes of in-work poverty—

poor people's low education and a scarcity of productive job opportunities or job refusal.

The media is constantly reporting on the negative effects of unemployment on

social and cultural factors, but little on the psychological effects on the unemployed. As

a result, the purpose of this study was to uncover the psychological effects of

unemployment. The findings of this study may help municipalities develop services that

help unemployed people cope with job loss and improve their chances of finding work

by teaching them skills such as entrepreneurship and craft skills, allowing them to

compete in the open economy.

This research contains data on the Philippines’ unemployment rate and its impact

on economic development. The goal was to gain a better understanding of those

unemployed people’s experiences. This study was carried out through the use of

surveys and the collection of reliable and accurate sources such us articles, websites,

and books. Another goal of this research is to identify the various factors that influence

the unemployment rate in the Philippines.

 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

REVIEW OF RELATED LITERARURE

This chapter examines the available literature on the subject of unemployment.

Despite the fact that there have been numerous studies on unemployment in various

parts of the world. We were able to gather literature on unemployment in the Philippines

that included other provinces. This data served as a foundation for my analysis of the

impact of unemployment in the Philippine community.

Lawrence H. Summers Not all employment is the same. Unemployment can be

short term or long term. It can be frictional, meaning someone between jobs; or it may

be structural, as when someone's skills are no longer demanded because of a change

in technology or an industry downturn.

Trivedi and Baker (1985) concluded that a rise in unemployment in Australia is

related to rise in real unit labour costs, lagged unemployment and real unemployment

benefits (prior to 1975), and a decline in the rate of capacity utilization.Valentine (1993)

asserted that the growth in real unit labour costs is the main cause for an increase in

unemployment in Australia.

Teo et al. (2004) investigated the unemployment-vacancy relationship in

Singapore, Japan, Hong Kong, and Taiwan and concluded that these countries have
 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
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higher unemployment and lower vacancies. According to the authors, the higher

negative coefficient obtained for the

vacancy rate in Singapore suggests that the Singapore labor market has higher

matching efficiency than the Japanese labor market.

The literature on the detrimental effects of unemployment has tended to focus on

the broader impact of unemployment on mental and physical health or life satisfaction

and not on the specific emotions that are experiencedduring this period (McKee-Ryan et

al., 2005; Paul & Mos.

Changes in the measurement of overall unemployment from the CPS: Corson

and Nicholson (1988) found that changes in CPS measurement of unemployment could

explain from two to ten percent of the decline in the Standard Rate from 1971 to 1986.

A similar study by Felbermayr et al. (2011), utilizing panel data from 20 OECD

countries, found a negative correlation between unemployment rates and economic

openness. This reaffirms the findings of Matusz (1996), who asserted that trade may

improve economy-wide productivity and reduce unemployment rates. The reason is that

trade results in a greater division of labor due to the increase in variety of available

intermediary activities.

In particular, this has concerned the experience of unemployment, and the use of

strategies based on proactive behaviors which positively affect well-being and perceived
 Republic of the Philippines
Region V
Department of Education
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NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
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uncertainty. To explain the active processes of coping with unemployment, several

models have been suggested over many years (DeFrank & Ivancevich, 1986;Gowan &

Gateway, 1997;Latack et al., 1995;Leana & Feldman, 1988;Waters, 2000). Even if

these models differed from each other, a general functional structure of coping with

unemployment may be described.

A coping strategy based on proactive behaviors seems to stabilize or increase

the well-being of unemployed people and reduce their uncertainty about employment

(Mantler et al., 2005). Some reviews have been conducted on coping with

unemployment (e.g., Waters, 2000;Gowan, 2014), but such reviews have concluded

that there is a need for more research, especially analyses of the process of coping with

unemployment (e.g., Kinicki et al., 2000;Waters, 2000;McKee-Ryan et al., 2005;Rudisill

et al., 2010). These models may be helpful for improving our understanding of the

coping process.

Tarriela (2006) The philippines has too few jobs for its population. The

unemployment rate steadily increase from 8.4 percent in 1990 to 12.7 percent in 2003

(BLES 2003)

J Felipe (2006)Unemployment and underemployment are the Philippines’ most

important problems and the key indicators of the weaknesses of the economy.

Poverty is primarily due to low earning capacity of the poor and to their limited

access to regular and productive jobs. Behind these are the two interrelated root causes
 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

of in-work poverty—low education of the poor, and the scarcity of productive job

opportunities. Jan J Rutkowski (2015)

Urrutia et al. (2017) employed similar approach done by Aurangzeb and Asif

(2013) in conducting a time series analysis from 1988 to 2004 to assess the presence of

causal relationship among six macroeconomic elements including population and

unemployment in the Philippines.

Nonetheless, similar with other developing countries with relatively young

population, scholars and stakeholders alike claim that youth unemployment is a for

more serious dilemma for the Philippines than total unemployment (OECD & ADB,

2017).

Unemployment is a perennial development problem faced by the Philippines

which requires collective intervention via public policies (ADB, 2019a; Moya, 2018).

On the supply-side, job-skills mismatch is often cited as the main culprit behind

high unemployment level among young Filipinos (Budharani, D’Amico, & Espiritu, 2018;

Moya, 2018; OECD & ADB, 2017; Canlas & Pardalis, 2009; Esguerra, 2009)

In a news release by The Philippine Star (2015), 656, 284 fresh graduates

entered into the labor force in the past year. Current unemployed individuals will then

face more competition from getting a job.

 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

In a news release by The Philippine Star (2015), 656, 284 fresh graduates

entered into the labor force in the past year. Current unemployed individuals will then

face more competition from getting a job.

 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

DISCUSSION

Unemployment has a negative impact on the unemployed person and his family,

not only in terms of income, but also in terms of health and mortality. Furthermore, the

consequences last decades. Unemployment has a similar impact on the economy.

Because unemployment affects so many aspects of the economy, understanding the

root causes of unemployment will allow the country's government to respond quickly to

fluctuations in unemployment, potentially mitigating the effects of an economic downturn

or maximizing the benefits of an improving economy.

The majority of people in the Philippines want to work or have steady jobs.

However, job openings in the country's industry are scarce, and there aren't enough

jobs to go around. As a result, creating an overabundance of labor forces workers to

travel abroad to seek work. The following problems and issues are being addressed by

government policies aimed at achieving full employment. Despite rapid economic

growth in the Philippines in recent years, unemployment remains a persistent problem

for the sprawling Southeast Asian nation of more than 100 million people.

This results revealed the effects of unemployment on economic development in

the Philippines. One reason is that job creation has struggled to keep pace with an

ever-expanding population. In three of the past five years, the number of people

entering the job market has been greater than the number of jobs created. When

unemployment rates are high and steady, there are negative impacts on the long-run
 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

economic growth. Unemployment wastes resources, generates redistributive pressures

and distortions, increases poverty, limits labor mobility, and promotes social unrest and

conflict. Also, there are some factors affecting unemployment in the Philippines

including overpopulation, oversupply of labour force on certain industries and the

inability to take on available jobs. Overall rapid population growth is one of the reasons

why unemployment in the Philippines remains high despite robust economic

performance.

For several reasons such job creation has struggled to keep pace with an ever-

expanding population. In three of the past five years, the number of people entering the

job market has been greater than the number of jobs created. Unemployment and

underemployment are the Philippines’ most important problems and the key indicators

of the weaknesses of the economy.

Today, around 4 million workers (about 12% of the labor force) are unemployed

and another 5 million (around 17% of those employed) are underemployed.

This Reserve Army of workers is a reflection of what happens in the economy,

particularly because of its incapacity to provide jobs (especially in the formal sector) to

its growing labor force. The social costs of this mass unemployment range from income

losses to severe social and psychological problems resulting from not having a job and

feeling insecure about the future. Overall, it causes a massive social inefficiency.
 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

Unemployment usually leads to a loss of income. On the individual level, this is not so

serious, but on a larger scale, this can be very problematic.

Unemployment occurs when certain factories or companies close down, and this

especially serious when there is a financial crisis where recession and unemployment is

rampant. It has also been shown that rates in the Philippines is related to

unemployment moreover, high poverty rates and hunger rates may be caused by

unemployment too. Philippines is generally more socially affected by unemployment

and less economically affected. The study highlights the difficulty of spreading the

benefits of economic growth and suggests they have yet to trickle down to more

deprived areas. This is partly explained by the high value set on further education in the

Philippines: young Filipinos typically spend some time in college before entering the

labor market, contributing to the lower participation rate. Others in the region go to work

earlier.

Another factor may be the low quality of jobs available. Last year, just 58 per cent

of workers, in both formal and informal employment, were in what were described as

paid jobs. Of the rest, 28 per cent were self-employed, with no guaranteed income, and

11 per cent worked on family-owned farms or other businesses where they typically

receive food and lodging but no actual cash, according to official statistics.

Philippines is generally more socially affected by unemployment and less

economically affected. Philippines' economy is doing well and with high GDP, it is
 Republic of the Philippines
Region V
Department of Education
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NABUA NATIONAL HIGH SCHOOL
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presumed to be one of the top economies in the world in by 2030. Hence, social

impacts are generally more applicable to the Philippines, but not so much on the

economic costs of unemployment. Social Costs, specifically high income inequality, is a

result of unemployment in the Philippines. Philippines has a Gini coefficient of 43.0 in

2009, which shows that its income inequality is rather high since the closer the Gini

coefficient is to 1, the greater the income inequality. It has also been shown that crime

rates in the Philippines is related to unemployment. Moreover, high poverty rates and

hunger rates may be caused by unemployment too.

 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

CONCLUSION

The speed with which a country's economy grows affects its economic well-being.

Employment, unemployment, industrialization, and a variety of other factors all affect a

country's economic development. Because unemployment is a key indicator for economic

growth, it has a negative impact on the Philippine economy. Unemployment has the potential

to reduce overall economic growth by causing less depletion of goods and services.

Unemployment is caused by many factors in a modern market economy. It can be

caused by rapid technological change, business cycle of recessions, seasonal factors in some

industries particularly such as changes in taste and climatic condition which affects demand for

certain product, and service and individual perception and willingness to work and search for

job, their values and attitudes towards some jobs and about unemployed of the benefits of

training and the possibility for them to get a job after the training even though they have a

chance to get a ethnicity, age and class sensitive agricultural products. And also one reason of

increasing unemployment graduates student that the sources they taken from college is not

compatible for the job offer that's why it is hard to find a job and it can cause of increasing

unemployment here in the Philippines.

The problem of structural unemployment in the Philippines is serious. It stands at

almost two times the number of unemployed in Asian countries, despite a relatively strong rise
 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
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in economic growth in recent years. This can mainly be attributed to the poor education system

and the fact that net job creation could not keep up with the rapid population growth and

increased labor force participation in the Philippines.

It could be concluded that the Government should make a radical change in the process

of the approach towards economic growth, based on rule of law. This would affect the

increment of foreign investments in the country, indirectly helping and stimulating businesses

that employ more employees, helping the agriculture business, by changing the approach of

public investments. All these factors would influence unemployment reduction and this

reduction would influence general poverty alleviation and the decrease of emigration.

The research aims to study the effect of unemployment rate in the Philippines due to

circumstances using the analytic strategy of the study. This formulated research is for gaining

and knowing the effect of unemployment rate to economic development and to every person

who are affected by it. In conclusion, while the unemployment situation in Philippines is bleak

at the moment, it can be improved if the government is willing to take firm and decisive action

immediately. This study found that unemployment rate and property crime were strongly

correlated. Other less robust correlations were found between unemployment and

deterioration of skill sets.

 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

CITING OF SOURCES

1. Tejvan Pettinger March 5 2017 Low economic growth and unemployment

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unemployment/

2.Sharmaine Morales REVIEW OF RELATED LITERATURE AND STUDIES

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Chapter_2_REVIEW_OF_RELATED_LITERATURE_AND_STUDIES

3. Edmund S. Phelps September 1992 A review of unemployment on JSTOR

https://www.jstor.org/stable/2728066

4. Felipe J. Lanzona L. (2006) Unemployment, Labor Laws, and Economic Policies in the

Philippines. In: Felipe J., Hasan R. (eds) Labor Markets in Asia. Palgrave Macmillan, London.

https://link.springer.com/chapter/10.1057/9780230627383_7

5. Journal of Physics Conference Series 820(1):012008 March 2017 An analysis on the

unemployment rate in the Philippines: A time series date approach

 Republic of the Philippines
Region V
Department of Education
Division of Camarines Sur
NABUA NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT
Science, Technology, Engineering and Mathematics
S/Y: 2020-2021
San Miguel, Nabua, Camarines Sur | School ID. 302001 | Tel no. (054) 288 3758

https://www.researchgate.net/publication/

315946889_An_Analysis_on_the_Unemployment_Rate_in_the_Philippines_A_Time_Series_Da

ta_Approach

6. Simon Onowa owizy UNEMPLOYMENT PROBLEMS AMONGST GRADUATES OF HIGHER

INSTITUTIONS

https://www.academia.edu/5579970/

UNEMPLOYMENT_PROBLEMS_AMONGST_GRADUATES_OF_HIGHER_INSTITUTIONS

7.Economics ILP 2014 unemployment in the Philippines

http://econsilp2014.weebly.com/impacts.html

8.Unemployment in the Philippines Growth Rate

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unemployment-6778.html

10. Rutkowski, Jan J. (2015)Employment and Poverty in the Philippines

https://openknowledge.worldbank.org/handle/10986/26320
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11. Mastika Falsyah (2011) Determinants of Unemployment in the Philippines 1

https://www.academia.edu/13370811/

Chapter_2_REVIEW_OF_RELATED_LITERATURE_AND_STUDIES

12. Felipe Salvosa(2015) UNEMPLOYMENT

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economic-growth.html

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https://www.econlib.org/library/Enc1/Unemployment.html

Robert E. Hall (1979) A theory of the natural unemployment rate and the duration of

employment

https://www.sciencedirect.com/science/article/abs/pii/0304393279900011

SINGAPORE'S BEVERIDGE CURVE : A Comparative Study of the Unemployment and Vacancy

Relationship for Selected East Asian Countries

https://ideas.repec.org/p/eab/laborw/22578.html