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.

TECHNOLOGICAL Unemployment

• 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