Types of Unemployment

Unemployment is perhaps a most frustrating thing for any individual because when a person is able to work but he or she does not get the work it can be a quite depressing. Everyone is acquainted with the word unemployment, however many do not know that there are many types of unemployment let’s look at some of them –

1. Structural Unemployment – It refers to unemployment which is caused due to structural changes in the economy of the country, these changes though create new jobs but at the same time it eliminate jobs and render certain category of workers jobless. For example a technology related boom led to many people who did not knew computers jobless.

2. Frictional Unemployment – It refers to the time period between jobs when an employee moves from one job to another. Frictional unemployment is always present in an economy as certain percentage of workforce keep changing jobs. The reason for such type of unemployment is when a person decides to move to a new company, or to other city, or shifting to other industry.

3. Cyclical Unemployment – This type of unemployment arises during economic downturn, as in a downturn companies to produce lower goods due to falling demand for goods, they lay off the workers as there is no need for extra workers and also the emphasis of the company during such business conditions shifts to cost reduction and therefore they resort laying off the workers.

4. Seasonal Unemployment – It refers to the unemployment which results because of seasonal change. This type of unemployment is a common occurrence in the agricultural industry, where during harvesting season there is a need for more number of workers as opposed to other months during a year.

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