https://doi.org/10.56079/20222/4

Unemployment is a social-economic status  in a society in which a part of the population wishing to work cannot find a job that they are able to  do.

       The main negative economic consequence of unemployment is the  non complete usage  of the economic potential of the society, which results reduction of the ability to produce GDP  in the country and a number of other negative economic and socio-psychological events.

      Since 2020  after  transition to a new methodology of employment statistics, the numbers of employment-related indicators such as: labor force, Employees, the self-employed, the unemployed,  the level of employment, the level of unemployment have changed significantly in Georgia. Its evident, that  in view of the above, the conclusions reached in the study of a given problem in  future would be different than they would have been being studied by  the old methodology of employment statistics.

    The difference between the new and the old methodology of employment statistics is  that according to  the new methodology calculation  of employees and unemployment rate  is being performed  differently.   According to the new methodology , the share of which is quite high altogether among the employed people. Persons who produce their own agricultural and household products are  no longer considered as  employed and they  use   the  agricultural and household products (more than 50%)   for  their own need.

    Georgia  moved to a new methodology of employment statistics in  2020. Earlier employment and unemployment rates were  calculated   by the methodology   which was developed  by  International Labor organization in 1982. According to this  methodology due to the above mentioned reasons, in Georgia official data on population unemployment are in reality was mistaken.

      With a new methodology of employment statistics in Georgia the estimated workforce in 2015 was  increased  by 46.6 thousand people compared to the previous year, and in the following years it gradually decreased, and in 2021 it was amounted to 1533.6 thousand people  (with the exception of 2021 alone, compared to the previous year the number of workers in Georgia has increased by 9900).

       So,  within 2015-2022 years workforce  in Georgia  was reduced by 142 thousand people, or approximately by 8 %.  According to the employment statistics the number of calculated labor force  of employment statistics would be higher in Georgia, which is mainly due to its (old methodology) shortcomings, which were discussed above. For example,  in 2014 and 2019 years  the number  of the amount of workforce  being calculated by the old methodology  was 1911.0 and 1911.2 thousand people, and  according to a new   methodology    the same number  of the same amount  in the same years  was calculated as  1629.0 and 1572.8 thousand people.  So by the above mentioned reason  the number of  workforce in Georgia was reduced  approximately by 18 percent. The number of employees   in 2014-2021 years as the number of workforce was the  highest number in 2015, and the lowest number was in 2021 ( acordingly:2305.5 and 1217.4 thousand people).

   As for the  unemployed  number is concerned introduction of a new   methodology of  employment statistics made a great influence as well.   By this reason  the level of unemployment was increased significantly, which   reduced the level of employment. For example, in Georgia in 2019  the number of  unemployed people calculated by a new methodology was 276.9 thousand people    and the level of unemployment was 17.6%. In the same year the number calculated by the old methodology was 221.0 thousand people and 11.6%.

  In 2012-2021   the highest distance  among of unemployment level in cities and villages   was: in 2016 (7.9 percentage points, and  the lowest was in 2019 (1.5percentage points).  The numbers of unemployment in cities and villages  was much  more distance  when calculating the employment statistics by  the old methodology.   All of this was  mainly caused by  defect of self-employed calculation.  As for the level of unemployment rate is concerned, according to  the  age interval,  it is   the highest 15-19; 20-24 and 25-29  the  age interval in active population ( according to 53.2,, 41.0 and 27.8 percent) and the lowest 60.64 and 65 and  more age in active population (accordingly, 13.0 and 6 %). 

       The main reason  of unemployment in Georgia  is considered  to be the lack of investment in the economy and the resulting – a small economy, due to which there are not as many jobs in the country as there are job seekers.  Besides that, there are  such reasons for unemployment, as:  law qualification of  workforce, non-stable political and  social-economical environment, low technological level of  production,  lack of  production means ( roar materials, energy and others);

In order to reduce the unemployment  level  it is necessary to  implement the following measures:

1.    To devote a special attention to  economics of the country, especially, to  development of industry and agriculture. All this will support to resolve the two main tasks:  First:  the country should produce  a product of enough amount,  which has   great demand on the inner market of the country,  and  foreign market as well and the second:  to create  new work places  of  a great number. which will  reduce unemployment level.

2.    In the sphere of employment the government should implement  macro economical policy providing   demand on goods and services, which will cause   increasing workforce and reduce unemployment.

3.    To  grow the role of government as a legislative subject and one of the great employer.

4.    To attracted much attention to the issues of  state policy of employment .

Keywords: Employment statistics, employment and unemployment, labor force, unemployment rate.

JEL Codes: J21, J23, J64