Causes of unemployment

Cyclical unemployment 

Structural unemployment 

- Regional unemployment 

- Technological unemployment 

Frictional unemployment 

- Search unemployment 

- Seasonal unemployment 

- Casual unemployment 

Cyclical unemployment: Unemployment arises from a lack of aggregate demand 

Demand deficit unemployment 

In this case, demand for most products will be low and unemployment may be high. 

Structural unemployment: unemployment caused by the decline of certain industries and occupations due to changes in demand and supply.

May be job vacancies, employers might not be willing to employ those people who apply because they lack the right skills. 

It might also be that there are jobs in one part of the country but the unemployed live in another part.

These problems of occupational and geographical immobility are characteristics of structural unemployment. 

Regional unemployment: structural unemployment that is concentrated in a particular geographical area. 

Technological unemployment: unemployment that arises when workers lose their jobs because of advances in technology. 

Type of structural unemployment.

Frictional unemployment: Short term unemployment occuring when workers are in-between jobs. 

Less serious than structual or cyclical unemployment 

Lasts for a shorter period of time 

Some level of frictional unemployment is always likely to exist in an economy. 

Search unemployment: Unemployment arises when some unemployed people do not take the first job offered to them but spend time searching around for what they consider to be a good job. 

Type of frictional unemployment 

Seasonal unemployment: their labour is only demanded at certain times of the year e.g. fruit pickers, ice cream sellers. 

Type of frictional unemployment 

Means that they are out of work in-between irregular periods of employment e.g. builders and actors. 

Type of frictional unemployment