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Type of
unemployment

Data (if applicable)

Causes of this type

Problems this type
causes

Possible solutions

Problems with the
solutions!

Frictional

There is always some
transitional unemployment
due to frictional factors,
e
...
it takes time for the
unemployed to find a new
...
Some
people get married
and move nearer
their spouse's job
...

Some have saved
enough money so
they can quit
unfulfilling jobs
...


Not needed - both
unavoidable and (to
an extent) desirable
for an economy
...
g
...


Takes time to write
good CVs and
searching/applying
for jobs too
...


Under Margaret Thatcher’s
conservative government,
80% of miners in the UK
lost their jobs as the cost
of foreign oil and gas
decreased
...


Exists where there is
a mismatch between
the labour force’s
skills and the
requirements new job
opportunities (e
...

through technology)
...
g
...


Mass unemployment,
increase in income
inequality, poverty,
greater
mental/physical
health problems (e
...

caused by “instant
gratification”
strategies like
alcohol/drugs/smokin
g) and potential
increase in crime
...


Where are they going
to get the funds for
this training, if
companies have
enough workers then
they won’t want to
provide this training
...

Makes loans and

Structural

Cyclical

For example, during the
2008/09 recession levels
of unemployment rose to
5
...


Paying subsidies to
firms that provide
training to displaced
workers to help
relocate them to
areas where jobs
exist
...

Could lead to too
many loans being
given which could
lead to a recession

Technological

For example the US
business Kodak went bust
in 2013, causing 140,000
people to become
unemployed
...
This meant that
the vast majority of
workers remained
unemployed
...
g
...
Most likely to
occur when there is a
negative output gap
...
If young
people are out of
work for a long time
in a recession, it can
be difficult to get
back into
employment because
of lack of job
experience and
decline in motivation
...


mortgages more
affordable
...

They may be
replaced by
machinery or even
robots
...


Not all workers are
trained to the highest
level and it is these
people who are most
likely to be displaced
when technology
advances, in order to
avoid their
displacement training
could be provided
...

Able to export more
...


Innovations can be
banned in order to
stop their effect on
employment

such as in 2008-09
where too many
loans were given but
unable to be paid
back
...

Companies could
move out of countries
if they want to
change their

workforce
...

Seasonal

One-fifth of total
unemployment in the
United States is seasonal
...


Seasonality refers to
fluctuations in output
and sales related to
the season of the
year
...

Therefore some
workers will only be
employed at specific
times of year (e
...

fruit pickers in
Summer)
...
g
...


Trying to diversify the
economy would
mean that more jobs
are needed
throughout the year
...

Government creating
jobs in the offseason
...

Companies avoid
paying the workers
...


Real wage

Occurs when wages
are set above the
equilibrium level
causing the supply of
labour to be greater
than demand
...

However wages are
sticky-down, so
wages are above the
equilibrium mark,
causing classical
unemployment
...

For example,
lowering the national
minimum wage
would decrease real
wage unemployment
as it means
businesses are more
likely to be able to
afford to employ
more people, causing
unemployment rates
to decrease
...




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