Unemployment benefit is being provided to an individual who has
lost the job involuntarily. Unemployment benefit has certain impact
on the economy :
- Unemployment benefit increases the rate of unemployment in the
country as people start taking undue advantage and do not want to
lose the incentive received as unemployment benefit.
- It would raise the people's well being as unemployed people
would have certain source of income and thus do not get into a
miserable life.
- It would reduce the productivity of the employees as people
would not get threatened of losing the job.
- It would have a negative impact on the economic growth as more
number of people would prefer to be unemployed rather than
searching for job intensively due to the benefit received in the
form of unemployment benefit.