Natural Unemployment Essay

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With the use of examples name and explain three types of Natural Unemployment Unemployment is the number of unemployed people defined as people in the economy who are actively looking for a job, but can’t find one. There are three types of natural unemployment: structural, frictional and seasonal. They’re called natural unemployment, because they prevail even if the labour market is in equilibrium. Structural unemployment can be caused by improvement in technology, when workers are replaced by technology that is faster, cheaper and more efficient. It also occurs when certain goods and services are not needed in the economy anymore, such as film cameras and typewriters, and the people who work in these declining industries lose their jobs. And when they want to find a different job, their skills are usually outdated and/or mismatched. Hence, this is the most serious type of unemployment, because people are still unemployed in the long run. The second type is frictional unemployment. This is unemployment in between jobs and occurs when a worker either is fired, or quits their job to find a better one. Another case is when students just graduated from university and are looking for a job; they are considered also unemployed. This type of unemployment isn’t as serious, because it is usually only in the short run and people usually eventually find jobs. One problem, however, is that there is not enough information between workers and employers and even though there are suitable jobs available, the unemployed people can’t find them. The third type of unemployment is seasonal unemployment. This, as the term already implies, occurs during off-season for certain jobs. For example, during summer, not so many people are willing to go skiing and the ski instructor can’t do his job anymore. He therefore loses his job in the summer and becomes unemployed. But since

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