Question

List and briefly explain the main types of unemployment..

Answer 1

The three main types of Unemployment in an economy are

1) structural unemployment

2) frictional unemployment

3) cyclical unemployment

Structural Unemployment - it can be mentioned that structural unemployment can actually be caused vendor required employer skill set is not matched with that of the employee and this happens because the world changes in a dynamic fashion from day to day and for instance consider an employee has to work on a particular programming language which is outdated and currently the market requires another programming language that the employer doesn't know as a result of which he might be removed because the skill set required is different for the role he is in now and this is an example of structural unemployment

Frictional unemployment- this type of unemployment exists due to the process of a person moving from one job to another result of which jobless rate in a particular industry can increase and for example if name of the workers in a particular City from their job to another City frictional unemployment is created in the city because the person who has moved from one job to another is the cause of it due to which many vacancies remain and it is not easy to find the person immediately for the vacancy and more the time the organisation takes to find the right employee more the frictional unemployment duration would be and that is the reason why you can observe there are many vacancies at the same time there are many jobless people because it takes time for organisations to find their right match

Cyclical Unemployment - this is similar to that of business cycles where you have to understand the fact that during an economic recession the unemployment rate increases in cyclical unemployment and during expansion the unemployment rate decreases