What Are the Four Types of Unemployment?

The four types of unemployment include cyclical, frictional, seasonal and structural unemployment. Unemployment is a situation where people have no job and are actively seeking job opportunities. Unemployment may be caused by several factors, and it is used in measuring the health of the economy of a particular country.

Structural unemployment occurs because of a mismatch of skills in the labor market. This type of employment relies on the social needs and changes of a particular economy. For example, advancement in technology often causes many professionals to lose jobs because they lack the skills required for a particular job.

Frictional unemployment results when people take time to move from one job to another. It also happens when employers lack complete information or if the information provided is incorrect. A good example is when a person quits a job in a company to seek another job elsewhere.

Cyclical unemployment occurs when the economy is below its full capacity. An economy that is in high recession tends to have high levels of unemployment. This happens because of economic breakdown hence fewer job openings and more unemployed people.

Unemployment that results from changes in seasons is referred to as seasonal unemployment. In such a situation, there are job opportunities only during certain seasons and when the season ends, the jobs end too. Good examples include farming and fishing.