What are different types of Unemployment?

There are several types of unemployment as discussed below:

Open or Visible Unemployment

The worker is willing to work and he has the necessary ability to work yet he does not get work. He remains unemployed for full time and fails to get any work, casual or full time. The mismatch between manpower of the country and other factors of production (land, capital etc.) causes open employment. India is facing this type of unemployment due to rapid increase in population.

Frictional Unemployment

It’s a temporary phenomenon resulting when workers are temporarily out of work while changing jobs. The strikes and lockouts are also one reason of frictional unemployment.

Structural Unemployment

Structural unemployment is caused by a decline in demand for particular product(s) in a particular industry. It results in reduction in its manpower requirement.

Cyclical or Mass Unemployment

Cyclical unemployment is generally found in Capitalist countries. Capitalist advanced countries face trade cycles. Trade cycles especially recessionary and depressionary phases. During depression or contractionary phases, the aggregate demand falls, leads to disinvestment, decline in production and thus causes unemployment. It is sometimes also known as Mass Unemployment and is most serious kind of unemployment because it is due to general deficiency of demand and affects nearly all the industries at the same time. However, capital producing industries are most severely affected by cyclical unemployment.

Seasonal Unemployment

In seasonal unemployment, a person gets employment only in a specific season of the year and he/she remains idle during remaining period of the year. This form of unemployment exists particularly in rural areas as agricultural labourers in most parts of the country get employment during a few months of the year. Further, in some occupations, there is a demand for labour only at certain periods of the year, as in potato-lifting, cotton picking, ice-cream factories, woollens factories and fruit gathering. In most seaside resorts demand for many kinds of labour is restricted to a few months of the year. Seasonal unemployment also exists in industries such as sugar, wool and soft drinks.

Disguised or Hidden Unemployment

In disguised or hidden unemployment, the person is employed but his / her marginal productivity is zero. It is most commonly found in agriculture whereby the increased pressure of population on land results more members of family working in same field without adding anything to the productivity of the land. Imbalanced occupational distribution of the working population is key reason to hidden unemployment.

Residual Unemployment

This form of unemployment covers unemployment due to all other causes, and includes those people regarded as unemployable on account of physical or mental disability. A large number of educated unemployed is also included in this category.