Unemployment

Types of Unemployment

Frictional Unemployment: Unemployment caused when people move from job to job and claim benefit in the meantime The quality of the information available for job seekers is crucial to the extent of the seriousness of frictional unemployment

Types of Unemployment

Structural Unemployment: Unemployment caused as a result of the decline of industries and the inability of former employees to move into jobs being created in new industries

As the coal industry declined, many miners had difficulties utilising their skills to find work in new industries such as IT and service sector work. An example of structural change in the economy leading to unemployment.
Title: On Duty. Copyright: Getty Images, available from Education Image Gallery

Types of Unemployment

Seasonal Unemployment: Unemployment caused because of the seasonal nature of employment tourism, skiing, cricketers, beach lifeguards, etc.

The demand for lifeguard services tends to exist in the summer but nothing like as much in the winter an example of seasonal unemployment. Copyright: Swiassmautz, http://www.sxc.hu

Types of Unemployment

A fall in aggregate demand can lead to a decline in spending forcing businesses across the economy into closing with damaging effects on employment as a result. Copyright: Beeline, http://www.sxc.hu

Demand Deficient: Caused by a general lack of demand in the economy this type of unemployment may be widespread across a range of industries and sectors Keynes saw unemployment as primarily a lack of demand in the economy which could be influenced by the government

Types of Unemployment

Technological Unemployment: Unemployment caused when developments in technology replace human effort e.g in manufacturing, administration etc.

Look: No workers! Robots rule where humans once stood! Titles: Assembly Line Workers, Electronic Factory. Copyright: Getty Images, available from Education Image Gallery

Unemployment

Short run and long run unemployment:

Classical theory short run unemployment is a temporary phenomenon; wages will fall and the labour market will move back into equilibrium Long run unemployment will be voluntary

Unemployment

Keynesian Unemployment: Unemployment in the long run may remain stubbornly high because of imperfections in the market sticky wages

Widespread unemployment in some parts of the UK during the 1930s seemed to contradict the assumptions made by classical economists. Post 1945, Keynesian demand management put full employment through government intervention in the economy as a policy priority. Title: Poverty in Wigan. Copyright Getty Images, available from Education Image Gallery