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Types of unemployment

Types of unemployment
  • Unemployment is a term that remain attached to every economy, irrespective of what the market scenario is.
  • Unemployment could either be forced or taken voluntarily.

In volunteer unemployment, person willingly quit the job and stays unemployed, whereas in forced unemployment a person is asked to leave the job and the reason could be any, for example, change in market demands has created the skill gap, or the domain or area in which a person is working becomes mundane due to various external factors.

There arises a situation when a person willingly give up working and the reason behind this could be many, be it the health issues one is facing or the jobs are not motivating or interesting enough to attract a person.

Unemployment is of many types of, let’s discuss here few of them.

Cyclical unemployment

In this type of unemployment, the person loses the job due to the downfall in the aggregate demand. The cyclical unemployment is also termed as general, Keynesian unemployment or the demand deficient.

Unemployment rising due to demand deficient

Unemployment prevailing due to the deficiency in demand is the situation when demand becomes insufficient and can’t generate the enough employment for the people.

Regional unemployment

When the impact of structural unemployment starts showing the affects on local areas and markets of economy, then the regional unemployment occurs.

Structural unemployment

Changes in the conditions of the market that prevails for long term, lead to the downfall of a particular industry, hence structural unemployment arises. Globalisation is another reason why some countries faces structural unemployment.

Classical unemployment

Classical unemployment is also termed as real wage unemployment, occurs due to the high wages. In this scenario the cause of the unemployment is the job rejection by a person due to the lower wages, or when high wages are demanded by them.

Changes in the conditions of the market that prevails for long term

Frictional unemployment

Frictional unemployment is the situation when a person lose their job and is looking for a new one. Though not much of a help is provided to curb the frictional unemployment, but yes, better information is one possible way to minimise the tenure of job searching. Full employment is not a possibility, because there might be people who will always be looking forward to change the jobs.

Seasonal unemployment

The reason behind the existence of seasonal unemployment is that there are some firms that are engaged in production in a particular season of the year. Construction, tourism, farming are few of the examples of seasonal unemployment.

Reasons behind the unemployment

  • As the competition increases in the local market, chances of unemployment also increase
  • Globalisation is another biggest reason of unemployment
  • Third reason behind the unemployment is immobility of labours

Labour immobility is a situation that arises when companies ask a person to leave or displace them, during their downfall and are unable to provide them the employment when their growth phase starts.LabourImmobility also arises when a person refuses to change the place, reason could be any, be it their family ties or the education of their children getting disrupted. Monetary aspects also plays a major role in labour immobility because as the place changes expenses too increase and maybe a person is not ready to bear that.

So when it comes to unemployment, there are the factors and scenarios that are out of our control. No matter how much efforts we make, unemployment won’t be reduced fully, but it could be minimised through proper research and efficient brainstorming.

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