UNEMPLOYMENT AND TYPES OF

UNEMPLOYMENT
 INTRODUCTION:
Unemployment is a term referring to
individuals who are employable and seeking a job but are unable to
find a job. Furthermore, it is those people in the workforce or pool of
people who are available for work that does not have a job. Usually
measured by the unemployment rate, which is dividing the number
of unemployed people by the total number of people in the
workforce, unemployment serves as one of the indicators of an
economy’s status.

 TYPES OF UNEMPLOYMENT:
As a matter of fact, the
unemployment have many types but mainly three (3) are most
important and other are related to them. Those are explained below:

1) FRICTIONAL UNEMPLOYMENT:
Frictional
unemployment arises when a person is in between jobs. After a
person leaves a company, it naturally takes time to find another job,
making this type of unemployment short-lived. It is also the least
problematic from an economic standpoint. Frictional unemployment
is a natural result of the fact that market processes take time and
information can be costly. Searching for a new job, recruiting new
workers, and matching the right workers to the right jobs all take
time and effort to do, resulting in frictional unemployment.
OR
Frictional unemployment occurs when workers leave their old jobs
but haven't yet found new ones. Most of the time workers leave
voluntarily, either because they need to move, or they've saved up
enough money to allow them to look for a better job.
Frictional unemployment also occurs when students are looking for
that first job or when mothers are returning to the workforce. It also
happens when workers are fired or, in some cases, laid off due to
business-specific reasons, such as a plant closure. Frictional
unemployment is short-term and a natural part of the job search
process. In fact, frictional unemployment is good for the economy, as
it allows workers to move to jobs where they can be more
productive.

2) CYCLIC UNEMPLOYMENT:
Cyclical unemployment is not
part of the natural unemployment rate. It's caused by
the contraction phase of the business cycle. That's when demand for
goods and services fall dramatically, forcing businesses to lay off
large numbers of workers to cut costs.
Cyclical unemployment tends to
create more unemployment. This is because the laid-off workers
have less money to buy the goods and services they need, further
lowering demand.
Government intervention, in the form of expansive
monetary policy and even fiscal policy, is required to stop the
downward spiral. After the stock market crash of 1929, the
government did not step in right away. This led to the Great
Depression, which lasted 10 years and led to a 25 percent
unemployment rate.
OR
Cyclical unemployment is the variation in the number of unemployed
workers over the course of economic upturns and downturns, such
as changes to oil prices. Unemployment rises
during recessionary periods and declines during periods of economic
growth. Preventing and alleviating cyclical unemployment during
recessions is a major concern behind the study of economics and the
purpose of the various policy tools that governments employ on the
downside of business cycles to stimulate the economy.
3) STRUCTURAL UNEMPLOYMENT:
Structural unemployment
comes about through technological change in the structure of the
economy in which labor markets operate. Technological change such
as automation of manufacturing or the replacement of horse-drawn
transport by automobiles, lead to unemployment among workers
displaced from jobs that are no longer needed. Retraining these
workers can be difficult, costly, and time consuming, and displaced
workers often end up either unemployed for extended periods or
leaving the labor force entirely.
OR
Structural unemployment exists when shifts occur in the economy
that creates a mismatch between the skills workers have and the
skills needed by employers. An example of this is an industry’s
replacement of machinery workers with robots. Workers now need
to learn how to manage the robots that replaced them. Those that
don't learn need retraining for other jobs or face long-term structural
unemployment.
A long recession often creates structural unemployment. If workers
stay unemployed for too long, their skills have likely become
outdated. Unless they are willing and able to take a lower-level,
unskilled job, they may stay unemployed even when the economy
recovers. If this happens, structural unemployment leads to a higher
rate of natural unemployment. 

 CONCLUSION:
Unemployment is a serious social and
economic issue that results in a tremendous impact on everything
but is often overlooked. A stronger system of assessing
unemployment should be put in place in order to determine its
causes and how to address it better specially in Pakistan where since
many years we are way behind the world.
 BIBLOGRAPHY:
1) www.wikipedia.com.
2) www.investopedia.com.
3) www.thebalance.com.
4) www.economicsonline.co.uk.
5) www.study.com.
6) Class lectures by Sir Abdul Rehman Nizamani.