Unemployment Structural Unemployment

Topics: Unemployment, NAIRU, Keynesian economics Pages: 3 (642 words) Published: July 23, 2011
types of unemployment
There are 4 types of unemployment:
1.Frictional Unemployment
2.Structural Unemployment
3.Cyclical Unemployment
4.Seasonal Unemployment

Frictional Unemployment
Frictional unemployment is due to the normal working of the labor market. That is frictional unemployment results from job search activities. Arises because of the time needed to match qualified job seekers with the available job openings. For e.g. the short span of time you spend unemployed after your graduation, may be because you need to travel to your new employers location.

Structural Unemployment
Structural unemployment is the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the location of job. For e.g. Typist who are skilled in using typewriters have to train themselves to use word processors………………… Cyclical Unemployment

Cyclical unemployment are unemployment that arise due to deficient in aggregate demand, it fluctuates with the business cycle, cyclical unemployment increases during recessions and decreases during expansions. Seasonal Unemployment

Seasonal unemployment is the unemployment that arises because the number of jobs available has decreased because of the season for e.g. sugar cane farmers.

Unemployment Rate
Now moving on to unemployment rate. As stated before unemployment rate is one of the key labor force indicator. The unemployment rate is the % of the people in the labor force who are unemployed. UR = U/LF x 100

Problems with the way Unemployment Rate is Measured
However I would like to take this opportunity to also discuss 2 problems with the way the unemployment rate is measured: The problem of:
1.Discouraged workers
2.Under- employed workers
Discouraged workers are workers who have in effect drooped out of the labor force because of lack of success in finding jobs. This does not appear in the unemployment statistics. Under-...
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