Question 1: Unemployment

The fragments from the following article warn for unemployment after the Covid- 19 pandemic is over, and compare this situation with the state of the Russian economy after the collapse of the Soviet- Union:

Russia's post-Soviet transition offers warning on hidden unemployment of coronavirus furlough schemes

"Can the world really press the pause button on the economy for months without mass unemployment? The experience of the Russian Federation as it emerged from the central planning of the Soviet Union nearly 30 years ago may provide some indications of what is to come.

When the USSR collapsed in 1991, many western economists advised the post-Soviet statesto enact a process of "shock therapy" designed to quickly move the centrally plannedeconomies of the communist era, to market-based systems.

Within months the Russian ruble floated freely on exchange markets, barriers to international trade were lifted, and a mass privatisation process of state-owned enterprises had begun. The economic and social stability of the past was replaced by almost immediately by hyperinflation and the influx of western consumer goods.

In a report for the US government published in 1992, the American economist William Moskoff famously asserted that 30 million, or 25% of the Soviet workforce would be unemployed as a result of the transition from central planning to a market economy. But this expected surge in unemployment did not happen. In reality, unemployment never got higher than 13% in 1998 when Russia experienced a financial crisis due to the default oninternational debt payments. Prior to this, unemployment hadn't exceeded 10%, despite thefact that the Russian economy had contracted by 40% between 1991-98.

Officially, between 1993-94, the Russian unemployment rate was 1.5%, lower than nearly every EU country at that time. Others estimate that for every 1% contraction of industrial output, only 0.5% of the labour force was laid off. It appeared, on the surface at least, that the architects of shock therapy and economic transition had performed some kind of miracle, and achieved structural adjustment from communism to capitalism, without mass unemployment.

And yet an unexpected phenomenon was taking place: hidden unemployment".

You can find the complete article here:https://theconversation.com/russias-post-soviet- transition-offers-warning-on-hidden-unemployment-of-coronavirus-furlough-schemes- 140126

2

1. Describe in your own words the link the article is trying to show between the economic situation in Russia after the collapse of the Soviet- Union, and the state of Western societies after the Covid- 19 pandemic when it comes to unemployment. (2p)
2. In fact, all modern economies fluctuate around "full employment", which indicatesthat there always is some level of unemployment. Describe in your own words what is meantby "full employment"?(1p)

Unemployment can be one of the most painful incidences in an economy; its consequences can be severe on both a personal level but also on societal level.

c. Describe the personal and societal costs of unemployment (2p).

d. Finally, unemployment can also be spread differently among different groups in society. Do some research in one of the countries listed below, and construct a table in which you show how unemployment is divided over different groups in society. Think about variables as age, gender, ethnicity, level of education, etc. Only use Eurostat or the national office of statistics of your country (like CBS in The Netherlands). You can choose Spain, Ireland, Finland or Belgium. (5p)

Maximum 500 words