4 Types of Unemployment

Unemployment refers to a situation when all able and willing persons of a country do not get suitable opportunities to work. In this post, we have added the 4 most important Types of Unemployment.

Types of Unemployment in India

4 Types of Unemployment

Various types of unemployment are prevailing in the world. Of these, the most important types of unemployment are

4 Types of Unemployment #1

Seasonal unemployment:

Agriculture is a seasonal occupation. There exists a time lag of approximately 5 to 7 months between the cultivation of two crops. During this time, due to a lack of alternative employment opportunities, farmers remain without any jobs. Similarly, people who engage in post-harvesting activities, find work for only some part of the year. These are examples of seasonal unemployment. Thus, seasonal unemployment refers to the situation in which people are not able to find jobs during certain months of the year.

4 Types of Unemployment #2

Frictional unemployment:

This type of unemployment occurs due to imperfections in the mobility of labor. Sometimes it happens that a person wishes to change his job. However, in the process of searching for a new job, he may remain temporarily unemployed. Similarly, a person might wish to remain voluntarily unemployed for some time. For example, a female worker might take a sabbatical for a few weeks or months on account of her marriage, maternity, etc.

4 Types of Unemployment #3

Disguised unemployment:

An entire family (or even, an extended family) working on a single farm is a common enough sight in rural India. Even if some of the family members were to be removed from the farm, the agricultural output would not be affected. This suggests that the number of workers engaged in farming is more than what is actually required.

For example, let us say that a piece of land can be cultivated by five people efficiently. However, eight people are engaged in cultivation. Now, if we were to remove three of these people, then there would be no change in the farm produce. In this case, we can say that three of the eight people are in disguised unemployment.

Thus, disguised unemployment refers to the situation in which the number of persons engaged in work is more than what is actually required to complete the work.

In India, disguised unemployment is prevalent due to the following reasons.

  • Joint family system: In a rural joint family system, almost every member of the family is engaged in farming activities on the family farm, irrespective of the requirement. Thus, most of the members remain in disguised unemployment.
  • Lack of alternative employment opportunities: In rural areas, there is a lack of non-farming employment opportunities. As a result, many people remain engaged in agriculture and allied activities even when they do not contribute positively to the output.

4 Types of Unemployment #4

Structural unemployment:

This type of unemployment refers to the situation in which individuals are unable to find jobs due to structural changes in the economy. Structural changes can be of two types.

  • Changes in technology: With the development process, the industrial sector in a country tends to switch to modern techniques of production. People who are not able to adapt to these technological changes are rendered unemployed.
  • Changes in demand patterns: Over time, people’s tastes and preferences change with respect to different commodities. In other words, the demand patterns of consumers undergo changes. Industries that adapt to changing market demands and modify their products accordingly are able to survive in the market. On the other hand, industries that are not able to operate in accordance with changing demands are closed down. Consequently, the people engaged in these industries lose their jobs and become unemployed.

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