UNEMPLOYMENT IN SINGAPORE : STRUCTURE AND DURATION

Abstract

In 1985 and 1986, the labour market situation in Singapore worsened dramatically. The effects of the reduced economic growth has led to a steep rise in unemployment. This outcome entails a growing concern over the importance of unemployment as a measure of weakness in the economy or misery for the unemployed. The widespread belief that unemployment in the past had been largely short-term (frictional) is now subject to questioning. Loss of a job for any cause results in frictional unemployment if there are other jobs available reasonably well suited to the unemployed’s abilities. It is what prevents one from getting another job now and not what led one to lose his last job that is the cause of a man's being unemployed. This suggests that the duration of unemployment is a possible device for distinguishing frictional unemployment from other types. This academic exercise seeks to explain the structure of unemployment by the various measures of the duration of unemployment estimated from data obtained from the annual labour force survey. Can one contend that if most spells of unemployment are short, then most unemployment is due to short spells? The result of this academic exercise reveals that while most unemployment spells are short, most time in unemployment is spent in spells of long duration. This paradoxical finding implies that the burden of unemployment falls most heavily on those individuals who are unemployed the longest.