Unemployment and its types

Unemployment and its types:

Unemployment is a phenomenon that occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequent measure of unemployment is the unemployment rate, which is the number of unemployed people divided by the number of people in the labor force.

Unemployment is a common economic problem faced by each and every country of the world, irrespective of their economic system and the level of development achieved. But the nature of unemployment prevailing in underdeveloped or developing countries sharply differs to that of developed countries of the world.

Unemployment can be categorized into the following types:

1. Frictional Unemployment:

Frictional Unemployment is when a person does not have a job due to the process of moving from one job to another. Furthermore, it could also be the time period which the worker is searching for a job. Many people suffer from frictional unemployment such as University graduates who are searching for a job after graduating from university

2. Structural Unemployment:

Structural unemployment is when a person is unemployed because there is a lack of demand for the worker as the firms are looking for a specific worker who has specific skills. Structural unemployment happens for several reasons such as Changes in technology, Changes in tastes, etc. Overall, Structural unemployment is unemployment caused by a lack of skills.

3. Cyclical Unemployment:

Cyclical Unemployment is when there is greater availability of workers than there is of job vacancies. Cyclical unemployment is called cyclical because it is linked to the business cycle of the economy. Demand has fallen for the product and the price level has decreased. This has caused the firms to cut back on their workforce so fewer people are hired for jobs.

4. Regional Unemployment : 

Regional Unemployment is simply structural unemployment occurring in a specific region of a country.

5. Casual Unemployment:

Casual Unemployment is simply when people are able to work but they choose not to work because they have sufficient cash. So, there is no need for them to work. However, this causes some problems because they add to the unemployment figures which make it higher in the economy. Some people who are contractors or self-employed can choose when not to work or choose not to work at the end of their contract because they feel they have made sufficient cash.

6. Technological Unemployment : 

Technological Unemployment occurs when there is a lack of jobs or when people lose their jobs due to technological changes. People are replaced by capital goods and machinery because sometimes it makes the job easier and also quicker.  Furthermore, it also makes the cost of labor and productivity less expensive which would make the firms earn more profit

7. Seasonal Unemployment:

Seasonal unemployment is a working agreement where the worker is employed for a certain part of the year, however, after that time of the year has passed then the worker is left unemployed. Examples of people who suffer from seasonal unemployment are people who work with weather-related jobs such as agriculture, tourism jobs, beach lifeguards or snow-related jobs in a certain region.