Unemployment is understood as a socio-economic situation when part of the working-age population is not involved in the production of goods and services. In total, there are five types of unemployment.
Instructions
Step 1
Frictional unemployment is caused by the natural time spent looking for a job. It lasts from one to three months, takes place as a phenomenon due to the dynamism of the labor market. Frictional unemployment affects both newcomers to the labor market and people who have left their previous jobs.
Step 2
Structural unemployment is caused by technological changes in production. At the same time, the sectoral or territorial structure of the demand for labor changes. For example, there was a drop in demand for workers in a particular profession.
Step 3
Specialists in an area that has lost demand cannot retrain so quickly that they can immediately find another job. They cannot move to another place where the demand for their specialty is higher. People have a desire to work, but they cannot get a job.
Step 4
The first two types of unemployment exist constantly, because fluctuations in supply and demand are characteristic of a market economy. People will look for better jobs, and firms for better employees. Many economists do not distinguish between frictional and structural unemployment.
Step 5
The combination of frictional and structural unemployment in the economy is called natural unemployment. If there is only natural unemployment in a country, one speaks of full employment. Full employment means that the unemployment rate is minimal.
Step 6
Seasonal unemployment is caused by seasonal fluctuations in the output of specific industries. If the firm is in seasonal demand, it is more likely to lay off workers before the next season. People agree to such work if the wages are high enough and there is confidence in further employment.
Step 7
Cyclical unemployment occurs during a downturn and a lack of demand. Cyclical unemployment is characterized by a drop in the aggregate demand for manufactured products and labor, and the inflexibility of wages.
Step 8
Institutional unemployment indicates an ineffective labor market. there is limited information about vacancies. People do not know about the availability of certain opportunities, and firms do not know about the person's desire to take the proposed position. The size of the unemployment benefit also plays a role.
Step 9
When benefits are high enough, many people fall into a trap. They would rather receive benefits than go to low-paying jobs. This is a problem in many countries with inflated unemployment benefits.
