Types of Unemployment

Seasonal Unemployment:

Occurs when people are temporarily out of work due to regular seasonal fluctuations in demand for certain industries or jobs, such as agricultural or tourism-related jobs during off-seasons.

Structural Unemployment:

Arises when there is a mismatch between the skills and qualifications of workers and the requirements of available job opportunities. It often results from long-term changes in the economy, like technological advancements or shifts in industries.

Frictional Unemployment:

Refers to the temporary unemployment that occurs when individuals are in the process of transitioning between jobs or entering the workforce for the first time. It's a natural part of the job search process.

Cyclical Unemployment:

Tied to the economic cycle, it occurs when there is a downturn in the business cycle, leading to reduced demand for goods and services and, consequently, layoffs and job losses.

Real Wage/Voluntary Unemployment:

Happens when individuals choose to remain unemployed because they believe the available jobs don't offer wages or working conditions that meet their expectations or needs.

Disguised/Hidden Unemployment:

This type of unemployment occurs when people are employed but not productively engaged in meaningful work, often due to underemployment or working in jobs below their skill levels.

Residual Unemployment:

Refers to a category of unemployment that cannot be classified under the main types mentioned above. It often includes a mix of various factors contributing to unemployment, making it challenging to categorize.

Erratic/Casual Unemployment:

Occurs when individuals are temporarily unemployed due to irregular, unpredictable factors like sporadic work opportunities or occasional layoffs in certain industries. It's not a consistent form of unemployment.