What are the four types of unemployment mentioned in general?

Question

Explain unemployment. In terms of how an economy works, one thing leads to another. There are different reasons why people are unemployed; they may not even be looking for work.

Answer 1

Unemployment occurs when members of the labor force seek jobs, but are unable to find employment.  It is generally reported by using the U-3 unemployment rate, which is the percentage of unemployed in the labor force divided by the labor force. Children, prisoners, retirees, full time students and people not seeking work are not considered to be part of the labor force.

Typically, unemployment is broken down by type and these are the reasons workers can not find employment.

Frictional unemployment occurs when workers are between jobs or they just entered the labor force. It can be caused by a person quitting their job, being fired or moving locations and they have yet to find work.

Seasonal unemployment occurs when a worker loses employment during some type of off season.  Typically agricultural workers will experience this type of unemployment when their services are not needed.

Cyclical unemployment occurs when there is a decrease in spending, typically during a recession.  If firms and consumers do not purchase as much, employers will lay off some workers. This type of unemployment is reduced during a recovery or prosperous period in an economy.

Structural unemployment occurs due to long term changes in the economy. These job losses can be caused by new technology, a skills mismatch, global competition or changes in tastes by consumers.

Answer 2

1-Natural unemployment: relates to normality where people are changing jobs, quitting jobs to go back to school or to stay at home with children, etc.

2-Frictional unemployment: It relates to short-term unemployment caused by factors such as changes in demand, closing of a store, change in an industry need for workers, etc.

3-Structural unemployment: minimum wage laws that influence the availability of jobs, where an increase in the minimum wage costs jobs, labor becomes more expensive.

4-Cyclical unemployment: It relates to the cyclical trends in the business cycle; it happens because of low demand in one or more sectors of the economy.