Types of Unemployment Explained

Cyclical unemployment

Unemployment due to a downturn in economic activity (recession)

Structural unemployment

Unemployment caused by changes in industry structure or technology

Frictional unemployment

Short-term unemployment when people are between jobs or entering the workforce

Seasonal unemployment

Unemployment in industries with seasonal patterns (e.g. tourism, agriculture)

Hidden unemployment

People who are unemployed but not actively seeking work, and thus not counted

Underemployment

Workers employed part-time or in jobs below their skill level, desiring more hours

Long-term unemployment

When a person is unemployed for more than 12 months; often due to skill mismatch or economic conditions

Natural rate of unemployment

The unemployment rate that exists even when the economy is at full employment (includes frictional + structural)