Four Types of Unemployment


FourTypes of Unemployment

Thereare four types of unemployment, which include seasonal, cyclical,structural, and frictional. All these four types of unemployment havean impact to the economy. Seasonal unemployment is a kind ofunemployment that results, when there is a limited need forperforming a certain type of work during given times of the year(McEachern,2012). Individuals that experience this kind of unemployment do notwork during certain seasons for example, a person that is employedas a lifeguard is likely to experience this kind of unemploymentbecause he is not likely to work during the cold season. Frictionalunemployment is a kind of unemployment that results from employeesseeking job opportunities that best fits them (McEachern,2012). For example, employees that seek job opportunities aftergraduation or employees that seek job opportunities because they wantto move from one job to another suffer from this kind ofunemployment.

Onthe other hand, structural unemployment entails a form ofunemployment that results due to changes in the demand patterns or asa result of technology obsolescence, leading to retraining ofemployees and vast investments in new capital equipments (Nellis&ampParker,2004). Conversely, cyclical unemployment is as a result of thechanging business cycles. During recessions, this kind ofunemployment may be very high and decrease during expansion periods.

Thefour types of unemployment have an impact on employees and theeconomy at large. When the economy is performing at its natural rateof unemployment, frictional and structural unemployment can stilloccur and have an effect on the economy. However, cyclicalunemployment cannot be considered a factor that can negatively impactthe economy during full rate of employment. For an economyexperiencing a prolonged period of recession, cyclical unemploymentmay have a great impact and may send a sign that the economy is notperforming (McEachern,2012). Besides, structural and cyclical unemployment may have immensenegative impacts to unemployed and to an economy that is facingrecession, and that has not adopted new technology


McEachern,W. A. (2012).&nbspEconomics:A contemporary introduction.Mason, OH: South-Western Cengage Learning.

Nellis,J. G., &amp Parker, D. (2004).&nbspPrinciplesof macroeconomics.Harlow: Financial Times Prentice Hall.