Unemployment

Frictional unemployment

Short-term unemployment that occurs when people are between jobs or entering the labor market for the first time.

Frictional unemployment diagram

Structural unemployment

Unemployment caused by changes in the economy that reduce demand for certain skills, making some jobs obsolete. Happens when there is a miss-match between worker skills and available jobs. Some of the causes may be technological advancements, change in preference or mobility of jobs

Structural unemployment diagram

Cyclical unemployment

Unemployment resulting from a lack of aggregate demand during periods of economic downturn or recession.

Cyclical unemployment diagram

Diagram

Seasonal unemployment

Unemployment due to regular and predictable seasonal changes in labor demand.

Seasonal unemployment

Diagram

Hidden unemployment

Unemployment not reflected in official statistics, including discouraged workers and underemployed individuals.

Technological unemployment:

Unemployment caused by technological advancements that replace human labor with machines or automation.

Regional unemployment

Unemployment that occurs in specific geographic areas due to regional economic decline or lack of investment.

Real-wage (classical) unemployment:

Unemployment that occurs when wages are kept above the market equilibrium, leading to excess supply of labor.