7 Types of Unemployment

An extreme view on unemployment is that there is none. The classical and extreme monetarist view of labor markets is that the labor market is like any other market. If the quantity demanded for labor is too low, then the price must fall until the market clears.

1. Transitional Unemployment:

A teacher in an international school might end his contract in one school and be starting at another school at the end of the long summer vacation. For eight weeks they may not be working. This sort of unemployment is called transitional unemployment

2. Frictional unemployment:

Unemployment due to time lost in changing jobs rather than a lack of job opportunities. Frictional unemployment would not be reduced significantly even if there were on increased demand for workers, but might be reduced by improving the information available to job seekers about vacancies.

Some people may lose their jobs by being made redundant or by quitting voluntarily. This group may not as yet have another job to go to and it might take time to find another job.

3. Cyclic Unemployment:

The portion of unemployment that is due to the business cycle and thus rises in recessions but then disappears eventually after the recession ends.

4. Structural unemployment:

Structural unemployment is so called because it is caused by the changing structures of industry in a country.

5. Technological unemployment:

This sort of unemployment is caused by change in technology and can lead to a reduction in demand for workers with particular skills.

6. Regional unemployment:

Often industries are concentrated in a particular area of a country so that when structural and technological unemployment comes, it creates pocket of unemployment in one area

7. Seasonal unemployment:

This occurs when demand for labor is high at certain times of the year. The tourist industry is notoriously seasonal. School holidays and weather patterns mean that demand is higher at certain times of the year. With the increased demand for holidays comes an increased demand for labor and vice versa.


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