Types of Unemployment

Definition: Unemployment is a situation when a person who is able to work and is actively seeking a job but could not find suitable employment for him/her. In other words, people who are without work despite the continuous search for the employment is called as unemployment.

It is measured in terms of the unemployment rate, which is calculated by dividing the total number of unemployed workers by the number of currently employed individuals in the labor force.

Types of Unemployment

There are several types of unemployment categorized on the basis of their nature, i.e. how the unemployment occurs, what are its consequences and what can be done about it.  These are:

Unemployment types

  1. Structural Unemployment
  2. Frictional Unemployment
  3. Cyclical Unemployment
  4. Voluntary Unemployment
  5. Casual Unemployment
  6. Seasonal Unemployment
  7. Technological Unemployment
  8. Disguised Unemployment
  9. Chronic Unemployment

There could be several reasons for unemployment, such as:

  • An individual has left the job and is looking for a new job.
  • The company has laid off its employees due to the economic slowdown.
  • The latest technology has replaced the manpower.
  • The individual has returned from the maternity leave or some education leave and has not been assigned any position yet.
  • The employees were retrenched due to lack of work.
  • The skill set of an individual has become outdated and must possess new skills to get hired.

Thus, the unemployment situation is grim and adversely affects the overall growth of the economy.

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