Types of unemployment

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  • Unemployement
    • Real wage
      • -Brought about by substantial and frequent wage rises
    • Demand deficient (cyclical)
      • -Relates to business cycle and how AD fluctuates              -When there is a slowdown in the economy, AD begins to fall. This leads to firms cutting back on production, therefore reducing the labour force
    • Frictional
      • The time searching between one job for another
    • Structural
      • Long term decline in a particular industry e.g. coal. Workers then have problems with geographic and skills immobilty
    • Hidden
      • People missed from LFS. They may be long term unemployed so may have become discouraged to find work; excluding them from the definition
    • Voluntary
      • People who choose to not work at the current market wage- often as benefits are too widely avaliable


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