Unemployment and it’s Types

TISSNET often ask questions on social issues and its causes.Unemployment is one them.Let’s see what actually unemployment and its various types and causes.


Unemployment occurs when a person who is actively searching for employment and ready to accept work at current wage rate and still unable to find work. It is used as a measure of the health of the economy. It has been a burning problem of modern societies, whether developed or undeveloped. It is measured in terms of unemployment rate = no. of unemployed/ total labour force


Voluntary Unemployment

Frictional Unemployment:

  • Temporary phenomenon
  • Workers temporarily out of work while changing jobs Strikes and lockouts. It is due to difficulties in getting workers and vacancies together.

Casual Unemployment:

  • Where workers are employed on a day-to-day basis
  • Occurring due to short-term contracts, which are terminable any time.

Seasonal Unemployment:

  • Some industries and occupation in which production activities are seasonal in nature.
  • Agro-based industrial activities like sugar mills etc.
  • Offer employment only for a certain period of time in a year
  • Can find in any country, causes wastage of resources

Structural Unemployment:

  • Due to structural changes in the economy, it taken place
  • Decline in demand for production lead to reduction in its manpower requirements
  • E.g. improvement of transportation in Towns, tongas become out dated and tonga operators become unemployed, therefore, they need to search jobs in any other industry.

Technological Unemployment:

  • It arise as a result of technological improvement
  • Due to improvement in machinery, production methods, some workers are replaced by Machines e.g. due to the arrival of computers, typewriters lost their jobs.

Cyclical Unemployment:

  • Trade cycles, recessionary and depressionary phases
  • Deflationary period, demands decline, production decreased and need to reduced workers
  • Unemployment caused by insufficiency of effective demand
  • Short term phenomenon
  • Increasing total expenditure and pushing up the level of effective demand, can reduced this kind of unemployment

Chronic Unemployment:

  • Unemployment tends to be a long-term feature of a country it is called chronic unemployment.
  • Underdeveloped country Vicious circle of poverty High population growth Backward or primitive technology
  • Low capital formation, are causes for this

Disguised Unemployment:

  • Situation of employment with surplus manpower, some workers have zero marginal productivity, removal of them will not affect the volume of total output
  • Suppose, for one work four man work effectively, if there are six people involved with that work they are not contributing anything in additional production their marginal productivity is zero

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