Unemployment

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    Unemployment

    Definition

    Frictional Unemployment: Occurs as workers change jobs and spend time without jobs during this

    period.

     

    Seasonal Unemployment: Occurs when consumer demand for certain goods and services are seasonal, and as a result people are only employed during periods of time.

     

    Cyclical Unemployment: Occurs when there is too little demand for goods and services in the

    economy during a recession, and firms are producing less as a result,

    employing less labour as a result.

     

    Structural Unemployment: Occurs when the labour market is unavailable to provide jobs for all

    workers because of a mismatch between the worker’s skills and the

    skill requirement of the jobs. It arises from long-term changes in the

    structure of the economy, as entire industries close down due to lack of

    demand for goods and services they produce. Workers who become

    unemployed and have skills no longer needed are occupationally

                                                      immobile.

     

    Voluntary Unemployment: Voluntary unemployment includes workers who reject low wage jobs

    whereas involuntary unemployment includes workers fired due to an

    economic crisis, industrial decline, company bankruptcy, or

    organizational restructuring.

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