Impact of Unemployment Rate on Growth in Vanuatu & Solomon (1999-2019)

This literature review examines the impact of unemployment rates on economic growth in Vanuatu and Solomon Islands from 1999 to 2019. It defines the unemployment rate as the percentage of the labor force without a job and discusses its effects on individual income, mental and physical health, and government payments. The review highlights that unemployment is a major problem in these Pacific Island nations, leading to poverty, reduced GDP, and migration to rural areas in search of job opportunities. Furthermore, it identifies challenges such as a lack of skills, inadequate human resource development, and the impact of political instability on unemployment rates. The study concludes that addressing unemployment is crucial for improving the lives of people in Vanuatu and Solomon Islands.

Dissertation & PHD
Thesis

Contents
LITERATURE REVIEW................................................................................................................1
Introduction............................................................................................................................1
Concept of Unemployment rate..............................................................................................1
Impact of Unemployment rate in growth rate in Vanuatu ad Solomon from 1999 to 2019...2
Conclusion..............................................................................................................................3

LITERATURE REVIEW
Introduction
The wide range summary of the earlier research regarding the topic which assists in
defining objectives is called as literature review. It is known as a component of academic writing
that clarifies understanding and acknowledges academic literature on a specific topic. The review
of scholarly sources aids in the provision of an overview of current knowledge by enabling
relevant theories, methods, and gaps in existing research. The review is based on the impact of
unemployment rate in growth rate in Vanuatu ad Solomon from 1999 to 2019 (Armstrong, and
Read, 2021). It will cover the research objective associated with unemployment rate and its
impact in growth rate in Vanuatu ad Solomon. The Vanuatu ad Solomon is island of south
Pacific Ocean.
Concept of Unemployment rate
In accordance to Anderson Somer (2022), the unemployment rate is defined as the
percentage of labour force without a job. It leads to rise or fall in the wake of changing economic
condition instead of anticipating them. It is considered most commonly used indicator in order to
have the understanding of conditions in labour market. The reason of occurring unemployment is
when someone is willing and able to work but not having any paid job. In order to measure the
unemployment rate needs identification who is in the labour force which involves people who
are either employed or unemployed. There are mainly three types of unemployment such as
cyclical, structural and frictional unemployment (Campbell, and Connell, 2021). The
unemployment rate is calculated at the national, state, and regional levels using labour-force
surveys conducted by each country's national statistical institute. In the Solomon Islands and
other countries, the unemployment rate is defined as the number of unemployed people
expressed as a percentage of the labour force. People in the labour force are either employed or
unemployed; that is, they do not have a job but are actively looking for one. People who are not
looking for work, children, and the elderly are not included in the labour force. Even in times of
prosperity, the unemployment rate rarely falls below 4-5 percent. People are constantly moving
between different sectors of the economy or between cities. Most of the people in Vanuatu today
were unemployed. People do not have good qualifications to get highly paid jobs (David, 2019).
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Impact of Unemployment rate in growth rate in Vanuatu ad Solomon from 1999 to 2019
As per according to Nanau, and Labu-Nanau, (2021), the unemployed individual not only
lose income but also face challenges to their mental and physical health. The unemployment rate
for 2018 was 1.81% in 2019 it was 1.80 % that 0.01 % was decline. Whereas in the Solomon the
unemployment rate in 2018 was 0.72% and in 2019 it was 0.76% with the increase of 0.03%.
The unemployment is considered the main issue for several Solomon islander’s especially young
people. The 80% of youth lack jobs. The women sit for the long hours during day and night to
sell food in order to earn income (Palinkas, 2020). The people move towards rural area in search
of job opportunity. But due to the global economic slowdown in 2009 there were few jobs left. In
this the high unemployment was seen to potential trigger for conflict. Vanuatu experienced an
average value of 1.79 percent during that time, with a minimum of 1.59 percent in 1994 and a
maximum of 2.18 percent in 2021. Unemployment may result in higher payments from the state
and federal governments for things like food stamps because unemployed people tend to spend
less and may accumulate more debt. Political instability has impacted unemployment rates in
Vanuatu ad Solomon (Pradhan, 2021). Confidence in the private sector was shaken and tourists
were discouraged from visiting, which resulted in businesses closing or shrinking in the
immediate aftermath of the coups in 1987, 2000, and 2006. An unemployment rate might not
reflect the true percentage of the population that is unemployed. In actuality, the level of
unemployment in the nation would be overstated by a conventional unemployment rate. The
impact of unemployment creates the health problem on the people of Vanuatu ad Solomon
(Qureshi, M.S. and te Velde, D.W., 2008). It increases the risk which further declines the health
and they are less likely to spend money on health-related expenditures. Due to unemployment,
there were several sectors which were affected such as accommodations, constructions, transport
and forestry. In Vanuatu, only 20% of the workforce is employed in the formal sector, and there
are only a few hundred jobs available there each year. Among other things, the low level of
formal employment has been attributed to inadequate human resource development and a general
lack of adequate and pertinent skills. In Vanuatu, one of the issues affecting the majority of
today's youth is unemployment. People in the Pacific Island nation of Vanuatu find it very
challenging to land a well-paying position (Wang, and Li, 2021). Thus, it becomes very
challenging to make enough money to survive. Paying for necessities like food, clothing, school
supplies, and other household items comes to mind. In addition, the majority of people lack a
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quality education because they cannot afford to attend school. Sometimes a child is eager to
learn, but their home environment lacks parental support and labours are unskilful (Yang, 2011).
Conclusion
From the above study it is being concluded that, Vanuatu ad Solomon is the pacific island
nation in which unemployment is considered as the major problem for the people. the
unemployment affects the lives of people due to having low income and lack of quality
education. The labours are unskilled in which they move towards the rural area for having job
opportunity. The unemployment leads to poverty and reduce in GDP. The percentage of the
labour force that is unemployed but looking for work is mentioned as unemployment.
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References:
Books and Journals
Armstrong, H.W. and Read, R., 2021. Tourism and sustainable growth in small (island)
economies. In Shaping the future of small islands (pp. 93-108). Palgrave Macmillan,
Singapore.
Campbell, Y. and Connell, J., 2021. Introduction: COVID-19 and Small Island States. In COVID
in the Islands: A comparative perspective on the Caribbean and the Pacific (pp. 1-39).
Palgrave Macmillan, Singapore.
David, G., Vanuatu‘s 40th anniversary: Review of the first decade of political independence
from 1980 to 1990. Pacific Geographies, p.15.
Nanau, G.L. and Labu-Nanau, M., 2021. The Solomon Islands’ Social Policy Response to
Covid-19: Between Wantok and Economic Stimulus Package.
Palinkas, L.A., 2020. Fleeing flooding: Asia and the Pacific. In Global Climate Change,
Population Displacement, and Public Health (pp. 99-125). Springer, Cham.
Pradhan, R.P., 2021. The Effect of Infrastructure and Taxation on Economic Growth: Insights
from Middle-Income Countries. In Applied Advanced Analytics (pp. 187-197). Springer,
Singapore.
Qureshi, M.S. and te Velde, D.W., 2008. Working smart and small: The role of knowledge-based
and service industries in growth strategies for small states. Commonwealth Secretariat.
Wang, Q. and Li, L., 2021. The effects of population aging, life expectancy, unemployment rate,
population density, per capita GDP, urbanization on per capita carbon
emissions. Sustainable Production and Consumption, 28, pp.760-774.
Yang, J., 2011. The Pacific islands in China's grand strategy: Small states, big games. Springer.
Online
Anderson Somer, 2022 Unemployment rate [online] Available through <
https://www.investopedia.com/terms/u/unemploymentrate.asp>
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