A Closer Look

Employability And The Economy

Employability is based on a set of individual characteristics. It is not equivalent to employment, but rather a prerequisite for (gainful) employment. It pertains to someone’s relative ability to obtain and maintain gainful employment, as well as make successful transitions from one job to the next, either within the same company or field or to a new one as the individual choices, circumstances or economic conditions may dictate. Employability will vary with economic conditions, although there are some exceptions in professions “insulated” from economic fluctuations, such as healthcare, education, defense, etc.

Definition of Employability

An amalgamated definition of employability views it from a narrow and a broad perspective. Narrowly defined, employability is a product consisting of a specific set of skills such as soft, hard, technical, transferable etc. The broad perspective includes the narrow definition and enhances it further by viewing employability as a life-long, continuous process of constantly acquiring experience, new knowledge (purposeful learning) and skills that contribute to improving one’s marketability and subsequently ability to obtain and maintain gainful employment in the various labor markets. Further, employability can be defined both as a product – a set of skills – that “enables” and as a process that “empowers” an individual to acquire and improve marketable skills that can lead to gainful employment.

Employability and Its Impact on the Labor Force

Employability applies to almost everyone who is part of the labor force, as the ability to obtain, maintain and switch employment over time is imperative to anyone’s survival as well as success in life, thus one has to be able to possess a set of skills that are either prerequisites or requisites in the labor market.

Employability and the Economy

Each factor of production is used differently, and labor or human capital can be used either in the process of manufacturing a product or providing a service within an economy…

From a macroeconomic perspective, a lack of or a lower employability contributes to frictional unemployment, to structural unemployment and affects the productivity of the labor force, which subsequently impacts a country’s standard of living measured by the GDP per capita and its potential for economic growth measured by the aggregate demand and the GDP. The component that has the largest impact on GDP and economic growth is consumer spending, because if consumers are not spending on purchases of goods and services, businesses do not invest in capital and labor or try to expand to meet the consumer demand. This translates into an economic slowdown and increasing unemployment, conditions that set the stage for the creation or deterioration of an economic recession…

Choosen excerpts by Job Market Monitor from

via Employability, The Labor Force And The Economy – SFGate.

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