Employment

Employment refers to the condition in which a resource (especially labor) is actively engaged in a productive activity usually in exchange for an explicit factor payment (such as wage or salary).

Types of employment

1. Full time employment – This is when a person works about 38 hours per week and receive full weekly wages and conditions for working the hour identified in the award and are paid for holding/ sick leave
2. Casual employment – Is the type of employment in which employees are engaged to work on an hourly or daily basis. It is a short-term employment which involves irregular hours and is not paid for holiday/ sick leave.
3. Part time employment – is a form of employment that carries fewer hours per week than a full-time job. Part time employee's area often hired to help with increased work demand or seasonal industry fluctuation that sometimes occurs in certain industry.

Keynesian Theory of Unemployment

This theory was put forward by Lord Keynes to explain the causes of cyclical unemployment. According to him, unemployment is as a result of deficiency in aggregate demand of goods & services. When there is lack of enough demand of goods and services in the economy firms reduce on their production levels. And as a result of this decrease in demand for labor since demand for labor is derived demand.

Keynes suggested a number of measures which can be taken in order to deal with such kind of unemployment and among them are the following:

• Use of expansionary fiscal policy by increase in government expenditure and reducing direct and indirect tax in order to increase aggregate demand for goods & services.
• Use of expansionary monetary policy in order to increase money supply and hence increase in aggregate demand and the level of investment.
• Encourage exportation in order to increase the foreign exchange for domestic goods.
• Improve the investment environment by improving economic infrastructure, provide incentives to invest and so on.

The relevance of the Keynesian theory of unemployment to LDCs

• The increase in government expenditure as suggested by Keynes, will instead result into inflation since in many LDCs there is instead deficiency of supply of goods & services.
• Keynes only looked at cyclical unemployment but however in LDCs unemployment is more than that e.g. seasonal unemployment, structural unemployment.
• Keynes did not put into consideration the structural and institutional problems in LDCs that contribute to unemployment in LDCs such as poor transport & communication network, poor land tenures.
• Increase in money supply in LDCs will not necessarily result into increase in aggregate demand in LDCs due to the fact that many people in LDCs have a tendency of holding money.
• Investment in industry in LDCs has helped so little to reduce unemployment since many industries are capital intensive. However to a small extent the Keynesian theory of unemployment has some relevance to LDCs on the following ground.
• In many LDCs domestic demand of goods is still very low due to a high level of poverty and hence contributing to unemployment.
• The export sector of LDCs is still very poor and hence low demand of the domestic goods in the foreign country.