Causes of Unemployment

Causes of unemployment


There are many causes of unemployment but I want to discuss seven main causes of unemployment.  Four major reasons create   Frictional Unemployment this kind of unemployment occurs when an employee wants to replace his/her job for a better opportunity. The other two reasons generate Structural Unemployment. This kind of unemployment occurs when employees cannot survive in relevant income or skill and the Last cause is due to cyclical unemployment.   This kind of unemployment arises when the demand for goods and services decline and employer feel no more requirement of employees.

Frictional Unemployment:

The first cause of frictional unemployment is due voluntarily leaving jobs by employees mean employees leave their job voluntarily because they have better job opportunities rather than the old ones.  The second cause occurs when an employee wants to relocate from one place to another. They will be unemployed for joining their new job.

The third cause arises when a new workforce arises in the market mean fresh graduates from school, college, or universities come to search for their first job.  The fourth cause of unemployment arises when job seekers re-enter in the job market after leaving the job, meaning they left their jobs due to their personal reasons.

Structural Unemployment:

This cause of un-employment is neither short-term nor voluntary, these two reasons lead to a long period of unemployment.  The factor behind those kinds of unemployment is due to the replacement of human services with computers.  Most of the workers required to upgrade their skills to perform duties like computer operators replace the office clerk.

Cyclical unemployment:

This type of unemployment occurs when jobs are less than demand.  Cyclical often happen in a recession when the economy of a country falls down.  A decrease in consumer demand encourages cyclical unemployment, an example of this kind the financial crisis of the financial year (FY) 2008.

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