Appl Ex 10n

Application Exercise 10n

Types of Unemployment


Seasonal unemployment

Where the jobs that people do only exist for a certain part of the year. E.g. ski instructor – only have a job for a few months a year. E.g. someone who gets a job just for the Christmas retail rush period.

Hidden unemployed

Also referred to as discouraged job seekers – these are people who would like a job but have stopped looking for one because they’ve had no luck after searching for a while.

Structural unemployment

Where job seekers’ skills don’t match the jobs that are available. E.g. a company decides to close its factory and move the factory overseas, so all the workers lose their jobs. E.g. a company decides to replace its workers with technology e.g. robotics.

Hard core unemployment

Where someone has personal characteristics that restrict their ability /disposition to seek and be able to keep a job.

Long term unemployment

When a person is unemployed for more than one year they are experiencing this type of unemployment.


Not technically unemployed, this happens when someone is employed, but is working fewer hours than they would like. For example, they may be working part-time but want to work full-time.

Cyclical unemployment

Where there aren’t enough jobs for people because the economy is growing too slowly. This happens when there is not enough Aggregate Demand (spending).  This type of unemployment happens during an economic downturn, such as the recent example of the slowing down of the economy during the COVID-19 pandemic.

Frictional unemployment

People are between jobs e.g. someone quits their job and is looking for another job but hasn’t found one yet.