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Unemployment, unemployment rate, and types of unemployment

Unemployment is a situation in which a eligible person searching for the job is unable to find job and Unemployment rate is calculated by dividing the number of unemployed people to all the people in labourforce. Labourforce include employed people as well as unemployed people searching for job and it doesn't include people who are retired or too ill to work or simply not looking for work.
Cyclical unemployment, unemployment rate


Unemployment rate formula 

Unemployment Rate = Unemployed people /  labourforce

Types of Unemployment

There are mainly three kind of unemployment Frictional, Structural and Cyclical Unemployment.

1.Frictional unemployment- Frictional unemployment takes place because people switch over from one job to another. In many cases the tenure of job gets over and worker remain unemployed till they got another job and in other cases workers migrate from one region to another region in search for better jobs in this searching period they remain unemployed for sort term and this unemployment is called Frictional unemployment. 

* It arises because of imperfect information in job market.

2. Structural unemployment- Structural unemployment results from mismatch between demand and supply of the workers in the different kind of job.for Example technology advancement in News Paper industry Now people read news via web or online now most readers no longer buys News paper so due to this structural unemployment arises.

3. Cyclical unemployment- Cyclical unemployment arises due to fluctuations in aggregate demand, When aggregate demand declines, there is simultaneous decline in the demand for labour and consequently increase in Cyclical unemployment. On the other hand, a general boom in the Economy increases demand for labour and Cyclical unemployment decreases.


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