Cyclical unemployment
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- Unemployment caused by a contraction activity and AD
- generally occurs in the short-term during periods of economic downturn
Structural unemployment
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- structural (long-term) changes causing workers to become redundant or displaced
- (e.g. new technology causing certain labour to be redundant)
Frictional unemployment
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- people who are temporarily unemployed as they move between jobs.
Seasonal unemployment
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- certain work at certain times of the year can create unemployment that changes with seasons
- (e.g. winter/ski jobs or Christmas jobs)
Hidden unemployment
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- people who can be considered unemployed but do not fit the official definition of unemployment
- thus are not reflected in the unemployment statistics.
- those who are unemployed and who have given up actively seeking work
Underemployment
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- part-time or casual workers who would like to work more hours than they are currently offered
- working less than full-time (35 hours per week)
Long-term unemployment
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- unemployed for more than 12 months. This can be linked to structural unemployment if a re-skilling process is not undertaken.
Hard-core unemployment
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- refers to people who are out of work for so long that employers consider them unemployable because of their personal circumstances
- (e.g. mental illness, physical disability, drug abuse and anti-social behaviour.)
- Unemployment is measured by the number of people who are able and willing to work but unable to find employment. In Australia, it is measured through surveys conducted by the Australian Bureau of Statistics (ABS).
- Recent trends in unemployment in Australia have shown a decline in the overall unemployment rate, but an increase in underemployment (people working part-time but wanting to work more hours).
- Unemployment, underemployment, and the underutilisation rate are different measures of labor market slack. Underutilisation refers to people who want to work more hours or in a better job.
- There are several types of unemployment, including structural unemployment (due to changes in technology or industry), frictional unemployment (related to the natural turnover of jobs), and cyclical unemployment (caused by economic downturns).
- Technological change can influence the level of unemployment by automating jobs, leading to job displacement.
- The non-accelerating inflation rate of unemployment (NAIRU) is the rate of unemployment that prevents inflation from accelerating. It is used as a benchmark for economic policy.
- An increase in economic growth can lead to an increase in the participation rate and a decrease in the level of unemployment, but it can also lead to higher wages and inflation.
- High levels of unemployment can have significant economic and social costs, including reduced consumer spending, lower economic growth, and increased poverty and inequality.
- Certain groups in Australian society, such as Indigenous Australians and those living in regional areas, tend to experience higher levels of unemployment.
- Recent policies to reduce unemployment in Australia include the JobTrainer program, which provides funding for training and apprenticeships, and the Jobs and Investment Package, which includes measures to support small businesses and infrastructure spending.️1 Define unemployment and explain how it is measured.