Explain the types of unemployment.

The three main types of unemployment –

• Structural unemployment – this type of unemployment occurs when the demand for the particular type of worker is not available. This happens due to the difference between the skills employer is looking for, and the skills workers actually have.

• Frictional unemployment – this type of unemployment occurs when workers leave their job and search for another one. The time gap between this is referred to as frictional unemployment. Example – quitting or termination.

• Cyclical unemployment – this type of unemployment arises when there is a recession and many people lose their jobs. When the economy goes up and down, based on these cycles, people became unemployed. That is why this is called cyclical unemployment.