Introduction:Unemployment shows the number of people in the workforce who wants to work but do not have a job (unemployment rate=number of people unemployed/labor force). All countries will face unemployment and it will cause an impact to the country’s economy.There are several types/causes of unemployment; first, frictional unemployment. It is caused when a worker is temporarily unemployed to find a job. In order to fix frictional unemployment, job vacancies might be lowered so workers can apply and get accepted to the job. Second, it is cyclical unemployment; it is caused by a fall in demand for goods and services in the economy during recession. Cyclical unemployment can be fixed through expanding output which can be achieved by increasing the demand or aggregate demand (C + G + I + (X-M)). Third, structural unemployment is caused by permanent fall in demand of goods. It can be reduced by providing government training programs to the structurally unemployed. Fourth, seasonal unemployment is caused because the demands for the goods or services are season like travel agent, skiing, and etc. Fifth, geographical unemployment is caused because the jobs are too far. Sixth, technological unemployment is caused by replacement of technologies to human labors. Seventh, occupational immobility is caused because workers cannot move from one job to another due to lack of skill. Eighth, regional unemployment is caused because jobs are not available in the workers area. Year2007200820092010201120122013201420152016Unemployment(% of labor force)18.104.22.168.22.214.171.124.96.25.5FIG 1 As we can see figure 1 above, the unemployment rate was high (9.1%) at 2007, it then started to decrease until 2012 (6.1%), there was a slight increase at 2013 by 0.1% and it decreased by 0.3% at 2014. It rose by 0.3% (6.2%) and it decreased at the year 2016 (5.5%). This figure shows that the unemployment rate was high at 2007; the governments were able to decrease the unemployment rate by; reducing job vacancies, increasing demand, providing more educations to the citizens, supporting infant and sunset industries and cutting down imports. When a country’s unemployment rate decrease it means that it is a good sign for the economy because it increases the productivity of the business leading to BOP surplus, it will cause the firm to expand as their productivity increases. It also increases the tax revenue for the governments so they can improve the infrastructure, provide more merit goods and public goods. The living standard of Indonesia will be improved because more peoples are able to get more health and education service, improved infrastructure and etc. FIG 2 As we can see the graph above, overall the unemployment rate of Indonesia is reduced which is a positive sign. In the other hand, if there was a high unemployment rate at Indonesia, it would have been a bad sign for the economy. High unemployment leads to increased in government spending because the governments have to provide unemployment benefit to the jobless workers and at the same time it will cause anopportunity costs because they could have used the money to improve infrastructures, investments, and etc. it also reduces the productivity of the business as they have less workers, it will reduce productivity, reduce competition which would lead to lower quality and inefficiency and BOP deficit because they will export less. The disposable income will reduce because they have to pay tax to the governments for the unemployment benefits and it is unfair for the peoples who are working hard for it. The unemployed workers will rely on the benefit; it will also cause a huge gap between the rich and poor. Conclusion:As a conclusion, the unemployment rate of Indonesia decreased a lot. It is a good sign for the economy because it increased productivity that leads to more consumer satisfaction, more competition, increase in export that leads to BOP surplus. It also increases the tax revenue and the government can use the money to improve the infrastructures, help sunset and infant industries, invest in health and education service. Most important thing, it helps the country a lot, as we can see Indonesia is a developing country, increased in employment rate leads to increase in exports, increase in living standard and it allows Indonesia to be one step closer to being a developed country. Government don’t have to spend a lot of money on unemployment benefit, instead they can use the money at more important things.