What is Unemployment? | Meaning & Definition | Akrivia HCM

Unemployment refers to a situation where people are actively looking for work but cannot find employment opportunities. In other words, unemployment occurs when there is an excess labor supply compared to the available jobs in the market. To calculate the unemployment rate, divide the number of people who are unemployed by the total number of people in the workforce. Unemployment can have various causes, such as economic downturns, technological changes, lack of necessary skills, and structural factors in the labor market. It can have significant economic and social impacts on individuals, families, and society.

Types of Unemployment 

 Some of the most common types of unemployment include:

1. Frictional unemployment: This type occurs when people are looking for a new job. Temporary factors such as seasonal work, economic changes, or personal circumstances often cause underemployment.
2. Structural unemployment: Jobless workers who do not have the skills or experience required for available jobs are said to be out of work. Technological change, changes in the economy, or changes in the demand for certain types of workers can cause it.
3. Cyclical unemployment: Unemployment resulting from a downturn in the economy or a recession is characterized by decreased demand for goods and services, which, in turn, reduces demand for labor.
4. Seasonal unemployment: This type of unemployment is related to seasonal fluctuations in demand for specific goods or services. For example, seasonal workers in the agricultural or tourism industries may be unemployed during off-seasons.
5. Voluntary unemployment: This type of unemployment occurs when individuals choose not to work, often due to personal reasons such as attending school, caring for a family member, or pursuing other interests.