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What are the Major Types of Unemployment

Updated on March 2, 2016
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IRSHAD CV has been a student in Economics. Now he is doing Masters in Economics. He completed B.A. Economics from the University of Calicut.

Introduction

Job is the base for the humanity, because without a good job or earnings no one can survive or lead a better life. Today, the world population is increasing. At the same time the advanced development of medicine reduced the death rate in many countries. Generally both death and birth rates are very less in developed countries. Compared to developed countries, the birth rate of third world countries is in an increasing tendency. Anyhow, when we consider the world as a whole, unemployment becomes a major challenge. Even today many developed countries are suffering the bad taste of recent financial crisis (2008 onwards) in the form of wide spread of unemployment.

When we think apart from politics, it is a debatable topic. The politicians are facing the question or challenge that, how to choose a better policy to eradicate the unemployment. Then only their ideology will be accepted or recognized by the public.

What is actually unemployment? Why unemployment? Generally people understand that unemployment is a situation of lacking of job. By modifying the same thought on unemployment, we can say that unemployment is a situation where the people are willing to do work, but they cannot able to find a suitable work for a given wage rate. Here it is clear that the people are voluntarily ready for doing work but the problems are from the part of economy.

Unemployment is a situation where the people are willing to do work, but they can not able to find a suitable work for a given wage rate

Major Types of Unemployment

So far, it is envisaged that what is unemployment. When we analyze an economy very profoundly, we can meet many unemployed people. But their situation or condition of unemployment may be varying from one person to another person. Someone may be unemployed because of the changes in the economy like deflation and some other one may be unemployed because of the environmental matters like seasonal changes and so on… In fact unemployment of any economy can be in different forms based on its nature. Here following are the brief explanation of different types of unemployment.

a) Seasonal Unemployment

Seasonally unemployed persons are unemployed because of the seasonal variations. We can see demand for some commodities are very high in a specific season. And similarly, the demand may fall rapidly in other season. For example, during summer the products like cool drinks, ice creams etc are highly demanded. So, such industries are more active during summer season. On the other side during winter season the demand for these commodities decline. Then the industry failed to generate employment opportunities because of the reduction in demand. Such unemployment results because of the seasonal fluctuations.

b) Educated Unemployment

Educated unemployment is become a common phenomenon in the world. This type of unemployment refers to the lacking of employment opportunities for educationally qualified persons. If the economic system is failed to provide suitable jobs for qualified persons the educated unemployment exist. The rate of educated unemployment may increase during financial unstable conditions like inflation, deflation etc.

c) Frictional Unemployment

Frictional unemployment is a short term phenomenon. That is the frictional unemployment is a temporary problem and it arose when a person seeking for a new job. In simple words, people have a tendency to shift to a better job from existing job. If when a person thrown his existing job and seeking for a new job, then until the time of getting a new job, the person will be unemployed. Such type of unemployment is actually frictional unemployment. This may exist both from the part of employer and worker or due to the shortage of resources or raw material, labor immobility etc. In such a situation, the people are unemployed temporary until getting a new job.

d) Disguised Unemployment

Disguised unemployment is a phenomenon which generally seen in over populated or labor rich countries. It refers to the system of many persons are engaged in a work which actually required only few workers.

This type of unemployment widely exists in high populated countries like India especially in agricultural field. There are many families whom depends agriculture for livelihood traditionally. Even though the number of family members increasing, the land area never increase. In such a system all the family members are working in the same land even their numbers increased. Here there exist idle unemployment. Numerous persons are working instead of few persons. Such unemployment is regarded as frictional unemployment.

e) Cyclical Unemployment

Cyclical unemployment spread due to the changes in business cycle. Business cycle or trade cycle shows different stages of an economy like boom, recession, depression and recovery. Simply these different stages of a business cycle show the amount of economic activities. During boom the economic arrive in a good condition. In other stages especially during depression, unemployment may increase rapidly since during depression the economic activities are coming down and so the unemployment increase continuously.

f) Technological Unemployment

Technological unemployment arose when innovative technologies are come. That is when advanced machinery used to produce something by replacing the old machinery or technology; absolutely it will reduce the role of human capital. In such a case the rate of unemployment increases. So, technological unemployment is due to the development in existing technology or mode of production.

g) Structural Unemployment

Structural unemployment exist when the existing social-economic structure become changed. This type of unemployment cause by many reasons like rapid technological development and changes in production function etc.

Structural unemployment may arose when the demand for a particular resource increase. Suppose the raw materials are scarce, so naturally the demand will increase, but further production is not possible. In such a condition unemployment prevails in the economy.

h) Occasional Unemployment

This type of unemployment is almost similar to seasonal unemployment. But here this type of unemployment exists only for a very short time. Part time workers are come under occasional unemployment.

i) Voluntary and Involuntary Unemployment

Voluntary unemployment refers to those unemployed persons who are not willing to do work, while involuntary unemployment is a situation where people are ready to work but failed to get suitable job.

Conclusion

In this globalized world unemployment is a general challenge of all. As listed above there are different types of unemployment existing in the world. As a responsible world citizen we and the policy makers must adopt appropriate policy to eliminate the challenge of unemployment.

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    • devesh prajapati profile image

      devesh prajapati 3 years ago from New Delhi

      good one sir

    • icv profile image
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      IRSHAD CV 3 years ago from India, Kerala

      Thanks for reading and for your positive comment

    • teaches12345 profile image

      Dianna Mendez 3 years ago

      A great look at the types of unemployment. I only wish we did not have such a problem in our country.

    • icv profile image
      Author

      IRSHAD CV 3 years ago from India, Kerala

      thanks for your kind respond

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