Problem 29

Introduction

There are three variations of unemployment. They are:

• • Cyclical - This type of unemployment is closely related to the business cycle. When there is a recession, the unemployment level is high and during a boom period, the unemployment level is low.
  • Frictional - This type of unemployment takes place when employees shift between jobs.
  • Structural - This type of unemployment happens because the workers lack the skills required in the labor market. Technological upgradation or structural reorganization could be the factors behind this type of unemployment.