Types Of Unemployment

The following are the various types of unemployment:

FRICTIONAL Unemployment

  • Normal type of labor market turnover
  • Made up of those temporarily out of job in search for new ones
  • For example those who are constantly changing their economic activities, those who were laid off temporarily due to seasonal demand or school leavers joining the labor force


STRUCTURAL Unemployment

  •  Arising from a change in the structure of the economy
  • Example: decline of one industry and the rise of another.
  • Unemployment arises as the unemployed needs to learn new skill sets in the new industries or need to relocate to a different areas for the new industries.

CYCLICAL Unemployment

  • Arising from a slowdown in the pace of economic expansion like recession, depression
  • When the economy is contracting like in a recession, cyclical employment can become extremely high

SEASONAL Unemployment

  • Common in many countries where certain seasons during the year require more workers.
  • Due to seasonal unemployment, the labor cannot be utilized fully the whole year round.
  • Example, during rainy seasons the fishermen and construction workers become unemployed.



  • Improvement in technology reduce the demand for manual labor
  • Example: Automation in banking industry where they employ lesser clerical level

DISGUISED Unemployment

  • Arises when people are working but not contributing to the productivity.
  • For example, 15 workers are doing a job and it can be done by 7 workers


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.