Question

What are the different types of unemployment? List them, Please discuss in detail.

Answer 1

There are basically four type of unemployment -

• Frictional Unemployment: There is always some level of unemployment that prevail in the country or economy among workers who have voluntarily quit their previous jobs and are searching for new better ones. In this case the amount of time spent in transition from the current to the next job, even if it's an hour the individual is considered to be unemployed. Also those that are looking for employment for the first time that are not able to get one immediately because of lack of perfect information about availability of jobs and lack of perfect mobility on the path of workers. In such a case most workers spend some time engaging in job search, just as most firms spend time searching for a new person to fill a job opening.
• Structural Unemployment: This unemployment arise as a result of mismatch between the job skills of workers and the requirement of jobs. Shifting patterns in the demand for various commodities of industries is also responsible for structural unemployment. Structural unemployment tends to last for longer periods because workers need time to learn and acquire the new skill.
• Cyclical Unemployment : This exist as a result of cyclical fluctuations in the economy. When the economy moves into recession, many industries find their sales falling and as a result cut down their production, as production falls they start laying off workers. This type of unemployment is due to the fact that total effective demand of the community is not sufficient enough to absorb the entire production of goods that can be produced with the available stock of capital.
• Seasonal Unemployment: This refers to unemployment due to factors such as weather variations or other calendar related event that affect some type of works. For example most people who engage in agricultural activities will be in active employment between the planting and harvesting period and will remain idle after harvesting period.