What are the different types of unemployment? There are four types of unemployment: Structural unemployment – depends on the social needs of the economy and dynamic changes in the economy. Frictional Unemployment – caused because unemployed workers may not always take the first job they are offered because of wages and the necessary skills needed. Cyclical Unemployment – an economy has the capacity to create jobs which increases economic growth. An expanding economy usually has lower levels of unemployment. Seasonal Unemployment – there are certain types of unemployment that tends to concentrate in a particular time of the year and this is known as seasonal unemployment.
How do they affect the economy in terms of growth, labor force, and price of labor? Structural unemployment-. Example; advances in technology and changes in market conditions often turn many skills obsolete, this typically increases the unemployment rate. Frictional Unemployment – this type of unemployment can also be caused by failing firms, poor job performance, or obsolete job skills. Usually someone out of work, it takes time to find future employment, the time spent out of work is frictional unemployment. Cyclical Unemployment – an economy that is in a recession faces higher levels of unemployment. Seasonal Unemployment – is most common in industries such as tourism, hotel, catering and fruit picking. Any type of unemployment is important to the labor force and economic growth. A person who is actively searching work, but unable to find work is classified as unemployed. The size of the labor force is used to determine the unemployment rate.
Cite specific examples to support your response. Structural unemployment- example – laborers who worked on cotton fields found their jobs obsolete with Eli Withney’s patenting of the cotton gin. Another example, the invention of the computer made many jobs obsolete such as the typing pool and the way bookkeepers were replaces by computer programs. Frictional Unemployment – example – a college student quitting their fast-food job to get a job that fits in the field they studied in college and graduate in. Cyclical Unemployment – example – due to a recession, many company layoff workers and individuals loose their livelihood. There are more individuals looking for work than there are job openings due to the breakdown in the economy. Seasonal Unemployment – example –Christmas time is when some stores hire extra helpers for the busy season, then lay them off. Economy Watch (2010), Unemploymnet types, retrieved January 9, 2012 from, http://www.economywatch.com/unemployment/types/
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