Adverse effects of unemployment are:
(i) Loss of valuable human resources Unemployment means that some able and willing persons have not been able to get work. Since labour is an important agent of production, unemployed labour means unused human resources and consequently less than full production. This means lower national income and smaller per capita income.
(ii) Increase in poverty.
Unemployment and poverty go together when some people are unemployed and hence unable to contribute to production and income, they become dependent upon others. Sharing other peoples income in low income groups pushes people below the poverty line.