Definition Of Unemployment

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Definition of unemployment:economy making a mismatch between the job and
Unemployment refers to the number of people whothe job seekers a good example is the advancement
are jobless in an economy; unemployment isin technology lendering current workers to be
measured in terms of unemployment rate which isunemployed because they lack necessary skills for
derived from the number of people who arethe job. The introduction of modern technology such
unemployed divided by the total labor force.as computers will result to unemployment of old
Unemployment has been a concern to governmentsemployees who may be computer illiterate.
as they apply policies that aid in reducingDisguised unemployment:
unemployment.Thios is another type of unemployment whereby it
Unemployment means a condition in which ancan be termed as under unemployment, it involves
economy has idle resources that are not beingemployment that does not the equilibrium wage rate,
utilized, labor is a factor of production and if aexample a person who spends the whole day herding
country does not utilize this labor to the fullest thenonly one sheep yet he can manage to take care of a
we have unemployment of labor which is a factor ofhundred goats, this is termed as disguised
production.unemployment.
Unemployment however can be termed as a state inCauses of unemployment:
which an individual is looking for a job but not gettingCyclical unemployment:
one, however unemployment does not includeCyclical unemployment is caused by business cycles
students, retired people or even children. There arewhich result from reduced aggregate demand; the
three types of unemployment namely cyclicalreduction in aggregate demand will discourage
unemployment, frictional and structuralinvestment leading to unemployment.
unemployment, there are two types of frictionalFrictional unemployment:
unemployment and this include seasonalThis type of unemployment is caused by people who
unemployment and wait unemployment.are in between jobs or are looking for better jobs.
Measurement of unemployment:Seasonal unemployment is caused by changes in
Types of unemployment:seasons while wait unemployment is caused by the
Cyclical unemployment:few available high paying jobs.
This type of unemployment exist where we haveStructural unemployment:
inadequate aggregate demand, its name is derivedThis typoe of unemployment is caused by changes in
for varying business cycles, business cycles refers tothe structural forms of an economy where by the
varying of aggregate demand which when aggregatecurrent employees will lack the necessary skills for
demand falls this discourages investments leading tojob resulting to unemployment.
unemployment, this business cycles are broughtDisguised unemployment:
about by high tax levels, under consumption, lowThis type of unemployment is caused by
government spending and a decline in exports.underemployment whereby the person is employed
Therefore this type of unemployment will result duebut under employed, it is caused by lack of resources
to low aggregate demand which will cause a decline into produce and poverty.
investment leading to lower employment levels.Cost of unemployment:
Frictional unemployment:Measures to reduce unemployment:
This type of unemployment results from people whoCyclical unemployment:
are between jobs or temporarily looking for newAccording to the Keynesian theory this type of
ones, this type of unemployment is usually seen asunemployment can be solved through stimulation of
voluntary unemployment because people search foraggregade demand whereby this can be done
new jobs, however this type of unemploymentthrough increased government spending or an
allows workers to get the best jobs that meet theirexpansionary monetary policy.
wants and skills.Frictional unemployment:
There are two types of frictional unemployment andThis type of unemployment cannot be solved
they include the wait unemployment and seasonalthrough stimulation of aggregate demand as in the
unemployment:case of cyclical unemployment, this type of
Wait unemployment:unemployment can be solved through the provision
This is one type of frictional unemployment wherebyof more and better information to employers and the
workers will wait to achieve the few high paying jobsemployees about a particular job.
in an economy, this results to what is termed as waitStructural unemployment:
unemployment.This type of unemployment results from the
Seasonal unemployment:structural changes in the economy, this type of
This type of frictional unemployment is as a result ofunemployment therefore can be resolved through
seasonal occupations that results from seasons,the retraining of workers for their present jobs.
some enterprises provide jobs only during certainDisguised unemployment:
seasons and when the season is over they causeThis type of unemployment can be reduced through
unemployment which is termed as seasonalgovernment and monetary policies, because it results
unemployment.from poverty strategy that help erradicte poverty
Structural unemploymentwill play a major role in reducing this type of
Structural Unemployment results from the changes inunemployment.