Unemployment reduces productivity, increases fiscal burden, and strains government finances.
The consequences of unemployment on the welfare state involve the loss of productivity and the increase in the fiscal burden.
Unemployment leads to a decrease in the overall output of goods and services in the economy, reducing the country's productivity. This results in lower tax revenues for the government and an increased need for social welfare programs to support those without income.
As more individuals rely on government assistance due to unemployment, the state's budget faces pressures, leading to higher government spending and a heavier fiscal burden on taxpayers.