What is Unemployment, Causes & Types of Unemployment

Sun, 09/18/2011 - 02:06 -- Umar Farooq

What is Unemployment

Unemployment takes place when people have no jobs and they are willing and seeking for work. Some People give importance to the number of unemployed individuals but Economists focus on rate of unemployment which can be measure as dividing unemployed workers divided by all individuals in the labor force.

Unemployment Rates = Unemployed Workers  / Total Labour Force

The International Labor Organization (ILO) describes 4 different methods for calculation of unemployment rate.

  1. Labour Force Sample Surveys
  2. Official Estimates
  3. Social Insurance Statistics
  4. Employment Office Statistics

Types of Unemployment

Below are the types of unemployment

  1. Normal, Transitional Unemployment
  2. Casual and Seasonal Unemployment
  3. Frictional Unemployment
  4. Structural Unemployment
  5. Cyclical Unemployment

1. Normal, Transitional Unemployment

According to economists this exists at all times at a rate of 2-3 percent and harms no one. For individuals or groups, it lasts for a few months when people move from job to job for better wages or wait for better opportunities.

2. Casual and Seasonal Unemployment

Some occupations are adversely affected by weather conditions and workers in these trades expect a certain amount of casual unemployment. Seasonal unemployment often occurs in agri­culture, dockyard, hotels, restaurants and construction business. Such unemployment is inevitable and tends to be overcome by casual labour.

3. Frictional Unemployment


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