Unemployment in Singapore: Microeconomic Concepts and Government Policies

Running Head: ASSIGNMENT 1
Assignment
Name
Institution

ASSIGNMENT 2
Assignment
Introduction
In a news article “Retrenchments fall to near 7-year low, unemployment rate declines,”
the author, Rahman (2018) discusses various microeconomic concepts in Singapore. By and
large, the article discusses microeconomic events in the economy among them the demand for
labour by firms and supply of labour by individuals in Singapore. Notably, labour economics is
an important aspect in microeconomics. According to the article, the joblessness rate in
Singapore dropped down to 2 percent in the first quarter of this year from 2.1 percent in
December last year. In addition, the number of retrenchments in the country also dropped by
about 2,100. Mainly, this is attributed to a decrease in number of work permit holders in the
marine shipyard and construction industries in the country. What’s more, service sectors such as
insurance, finance, information and communications. transportation experienced an increase in
the level of employment. All in all, the employment conditions in the country have improved in
the recent past.
Economic Concepts and Models
It is imperative to note that labour economics is one of the main microeconomic
concepts. In this case, it discusses labour economics in terms of demand and supply of labour by
individuals and firms in the economy. As such, unemployment refers to the condition where
people who are able and willing to work and are actively looking for employment opportunities
cannot secure a job under the current economic conditions. Today, there are various forms of
unemployment. They comprise of frictional unemployment, cyclical unemployment and

ASSIGNMENT 3
structural unemployment. By and large, cyclical unemployment arises due to changes in the
business cycle of the economy. As a result, the level of cyclical unemployment increases
significantly when the economy is experiencing a recession and reduces when there is economic
growth. On the other hand, frictional unemployment occurs when the individual is in between
jobs. As such, when a person leaves a current job, it takes time to get a new job, thereby
experience frictional unemployment. Contrariwise, structural employment occurs due to a
mismatch between the skills of the workers and the skills needed for a particular job.
Specifically, it arises when the skills of the workers do not correspond to the skills that
employers seek for the job. In turn, this results in structural unemployment.
Aside from these main forms of unemployment, there are other forms of unemployment
that comprise of seasonal unemployment, under-employment, natural rate of unemployment and
disguised unemployment. Seasonal unemployment occurs in industries that are seasonal such as
tourism and agriculture. When the season is off-peak, individuals working in the sector remained
unemployed until the peak season. On the other hand, underemployment occurs when people
have a job but is either temporary or part-time. Therefore, even though they would like to work
full time and exploit their skills and expertise, they do not have the opportunity to work full-time
and earn only a part time income.
Discussion of economic concepts
As noted earlier, unemployment is a major economic problem in most modern economies
today. Therefore, a reduction in the rate of unemployment within an economy is always
welcomed. According to the article, the level of unemployment in the Singaporean economy
dropped in the first quarter of this year. Additionally, the rate of retrenchment in the country has