Unemployment calculation types causes effects and solutions

Unemployment: calculation, types, causes, effects & solutions

When people are employable and looking for a job however can’t get a new line of work, called unemployment. Unemployment happens when individuals have no jobs and they are ready and looking for work. And unemployment causes workers to suffer financial difficulties that may lead to emotional destruction. But when it occurs, purchaser spending goes down. Which is one of an economy’s key drivers of development, prompting a retreat or even a downturn when left unaddressed.

Unemployment rate calculations

Unemployment rate calculations
Unemployment rate calculations

Furthermore there are 4 distinct techniques for calculation of unemployment rate. Portrays The International Labor Organization (ILO), which are given below:

  1. Social Insurance Statistics
  2. Employment Office Statistics
  3. Labour Force Sample Surveys
  4. And Official Estimates

Types of unemployment

There are basically five types of unemployment

  1. Frictional Unemployment
  2. Structural Unemployment
  3. Cyclical Unemployment
  4. Voluntary unemployment
  5. And Seasonal unemployment

1- Frictional Unemployment

frictional unemployment - types of unemployment

Frictional unemployment refers to labourers who are in the middle of jobs. And it is also called search unemployment. But it’s anything but an unfortunate thing on the grounds that there are a few reasons. For example, youngsters’ training, family and friendly ties, housing issue in another spot. And searching for work that is most appropriate to their abilities.

2- Structural Unemployment

It is caused by a change in the demand for the products of a given industry. However the pace of present day innovation is quick to the point that it makes past systems out of date. And causing unemployment in old businesses. For instance, throughout the most recent twenty years, UK motor vehicle generation has declined. While car creation in the Far East has expanded.

3- Cyclical Unemployment

cyclical unemployment - types of unemployment

Cyclical unemployment exists when people lose their positions because of a downturn in aggregate demand (AD). Both outside and inside components are causes of cyclical unemployment. For example, wars, strikes, population changes, political disturb­ances, floods, dry spells, changes in utilization designs. And speculation, reserve funds, spending, supply of credit, business standpoint and so on achieve this sort of unemployment. And in the latest subsidence of 2008-2010, unemployment levels rose to 2.4m.

4- Voluntary unemployment

Voluntary unemployment happens when a laborer chooses to leave a job since it is no longer financially satisfying. Indeed there are a few purposes behind the presence of Voluntary unemployment including generous liberal welfare advantages. And high paces of personal duty. Voluntary unemployment is probably going to happen when the harmony pay rate is underneath. Therefore the pay important to urge people to supply their work.

5- Seasonal unemployment

Seasonal unemployment exists because of specific businesses just produce  their items at specific occasions of the year. However seasonal unemployment regularly happens in agri­culture, dockyard, hotels, cafés, restaurants and development business.

Causes of unemployment

causes of unemployment
causes of unemployment

Unemployment is caused by different reasons that originate from both the demand side, or employer, and the supply side, or the worker

  1. Inflation
  2. A large number of technological advancements
  3. Because of disability
  4. Overpopulation
  5. A higher literacy rate among men and women
  6. Recessions
  7. The issue of the immobility of the workforce
  8. Rapid changes in technology
  9. Companies prefer hiring a few people on board
  10. Attitude towards employers
  11. Perception of employees
  12. Because of employee values
  13. Discriminating Factors in work place like ethnicity, race, age etc.

Effects of unemployment

Effects of unemployment
Effects of unemployment
Effects of unemployment

The effect of unemployment can be felt by both the labourers and the national economy. And can make a gradually expanding influence. The main effects are:

  1. Increase in crime in the country
  2. Makes the individual feel very depressed
  3. leads to budget cuts and workforce reduction
  4. Affects the economy of a region very negatively
  5. Effect purchasing power
  6. Because of Starvation
  7. It is a cause of distress to the entire family
  8. Causes lowered profits for businesses 
  9. Reduces the spending power of both the employed as well as unemployed

Solutions for unemployment

Malinvaud unemployment typology
Malinvaud unemployment typology

The issue of unemployment is an intense one to be sure, which can’t be handled effectively. Following are the suggestions to solve unemployment problem:

  1. Birth control
  2. The creation of more job opportunities
  3. Industries in co-operative sector
  4. Individuals should be encouraged to enter diverse fields
  5. More importance to employment programmes
  6. Increase in Production
  7. Change in education system
  8. And Change in industrial techniques


Indeed unemployment is a genuine social and monetary issue that results in a colossal effect on everything except for is frequently neglected. A more grounded arrangement of surveying unemployment ought to be set up so as to decide it’s causes and how to address it better. And the growth of population ought to be checked so as to solve the issue of unemployment. Because to increase employment, it is essential to increase production in agriculture and industrial sectors.

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  1. 7
    Lavonia Hoscheit

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