Three Causes Of Unemployment

727 Words3 Pages
Unemployment is one of the most profound issues a nation or an economy may face on a macroeconomic level. At an individual level, unemployment may cause severe impact on the living standard followed by psychological distress as well. Economists tend to focus on the causes of unemployment to reduce its repercussions and find solutions for the unemployed workforce.
Different reasons and causes could lead to unemployment, and therefore the economists have divided unemployment into three main types. If it is caused by the time it takes to find a new job or a graduate student looking for his first position, then it is called frictional unemployment. The second and more harmful unemployment type is the cyclical one which is induced when the "overall demand for goods and services in an economy cannot support full employment" like in a case of economic contraction (Study.com, (n.d)). This type although critical is not the subject of my essay which will focus on the third kind of unemployment called structural. "This one exists when there are jobs available and people willing to do work, but there are not a sufficient number of people qualified to fill the vacant jobs." In other words, when there is a mismatch between the available jobs and the skills of the workers. Structural unemployment arises when the structure of a nation 's output changes and the demand for the specific type of roles change as well. Moreover, a change in technology is one of the main reasons that cause

More about Three Causes Of Unemployment

Open Document