Unemployment

Unemployment

• occurs when someone is willing and able to work but does not have a paid job.

What does it mean to be unemployed?

• Without work

• Currently available for work

• Seeking work; had taken steps to look for a job

• Not seeking for a job because of illness or disability (but willing to work)

• Waiting for a job

• rehire/ recall

Causes of Unemployment

• Fast Population Growth

• Excessive Supply of Labor Force

• Limited Job Opportunities

types of unemployment

Frictional

• Occurs when people voluntarily change jobs. After a person leaves a company, it naturally takes time to find another job.

• This type of unemployment is usually short-lived.

• it is also the least problematic, from an economic standpoint.

• Graduates just starting to look for jobs to enter the workforce add to frictional unemployment.

Cyclical

• The variation in the number of unemployed workers over the course of economic upturns and downturns.

• Unemployment rises during recessionary periods and declines during periods of economic growth.

• Recession - significant decline in the economic activity

Structural

• caused by differences between the skills possessed by the unemployed population and the jobs available in the market

• Technological changes can lead to unemployment among workers displaced from jobs that are no longer needed.

• Retraining these workers can be difficult, costly, and time-consuming.

Structural Underemployment

• Workers who are highly skilled but working in low-paying jobs

• Workers who are highly skilled but working in low-skilled jobs

• Individual is working but not in his full capability

Seasonal

• Seasonal unemployment occurs when people are unemployed at particular times of the year when demand for labor is lower than usual.

• In tourist areas, seasonal unemployment could be a big problem because work is only available for a few months a year.