Different types of unemployment
Unemployment is when a person is looking for a job but is currently not able to get one; it may also be used as a measure of the health of the economy. Unemployment is something that governments always try to avoid since it brings down the economy and the life expectancy of a country. However, there are many types of unemployment. At a basic level we can break down into voluntary unemployment and involuntary unemployment.
Voluntary unemployment occurs when a person willingly left his or her previous job and is now looking for a new one; while involuntary unemployment is a type of unemployment due to people getting fired from their last job and having the necessity to get a new one.
Another kind of unemployment is the frictional unemployment, this occurs because sometimes it takes time for a worker to look for a job when he or she just left the last one. During this period of time, the individual is considered unemployed but most of the times is only for a short time, which is why it is not specifically problematic from an economic standpoint. Frictional unemployment may also occur when a graduate student moves into the work force for the first time or when a person moves from a different city and needs to find a new job.
Cyclical unemployment is another kind of unemployment. This type refers mainly to the economic situation happening at the moment. Not surprisingly, unemployment is higher during depressions and recessions, and lower during high economic growth, so when the economy is going through a depression some companies have to fire workers in order to reduce expenses. These fired workers are called cyclical unemployed workers.
Structural unemployment is the last type that we will go through. Structural unemployment refers to inefficiencies in the labor market. There could be many reasons for this type of unemployment to happen. One of the reasons could be the geographical immobility, which...
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