Frictional - This is a type of voluntary unemployment. It is made up of people transfering from one job to another, and people looking for their first job. Another group of people involved in frictional unemployment is the peple looking for the "right" job, not just any job. It is unavoidable and cannot be eliminated. Because of Canadas good Employment Insurance (EI) people may also not look as hard for a new job after they have been laid off. In Alberta you can be on unemployment for 19 weeks. It is much higher in the states at 99 weeks, just shy of 2 years. (1)
Seasonal - This is unemployment caused by the ending of temporary jobs that revolve around the seasons. For example unemployment goes down around christmas as retailers hire more people to help handle the christmas rush. Other jobs like farm labour jobs are only around during the planting and harvest times. These kind of jobs are also affected by location. Atlantic Canada tends to have the most seasonal unemployment. In order from highests to lowest the top 4 provinces for seasonal unemployment are PEI, NB, NL, and NS. The top 4 industries with seasonal unemployment from highest to lowest are agriculture, forstry, fishing, and construction. (2)
Structural - This is type of unemployment is caused by changes in the structure of industry and changing demand patterns. It is the longest lasting type of unemployment.(3) Things that cause it are things like employees being replaced by new technologies,employees skills do not match the jobs available, there is achange in the type of goods and services that are produced and employees being replaces by outsourcing. When people loose their job in a "sunset" industry (industries that are shrinking and are at the end of their life cycle) they may have to go back to school and gain new skills in order to fill a job in the new industries or move to fine a job that sutes their old skills. This is the longest lasting type of enemployment. Sunset industries are the auto industry and oil and natural gas. Sunrise industries are education, healthcare, and financal services. A interesting fact about structural unemployment. (4)
Cyclical - This type of unemployment is caused by business cycle( we produce less goods and services); it's only present in the contraction phase of the business cycle.(5) It is caused by the increase in layoffs and lack of available jobs. When cyclical unemployment is present it is not unusual for there to be less jobs available that the number of people lookign for work. A decrease in real GDP causes layoffs which in turn increases cyclical unemployment, and a increase in real GDP does the opposit. Full employment occures when there is only small level of frictional and structural unemployment. The unemployment rate when full employment is present it called the natural rate of unemployment and there is no cyclical unemployment at full employment. It it the lowest rate of unemployment achievable without inflation. It is between 4 to 6.4% by the Organization For Economic Development (OECD). The natural rate of unemployment can change if employment insurance benefits change, the average job search time changes, and/or the labour-force participation changes. (6)
(1) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(2) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(3) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(4) textbook
(5) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(6) textbook
There are 4 types of unemployment.
(1) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(2) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(3) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(4) textbook
(5) Powers, Stephanie, Red Deer Collage Donald School of Business, February 27, 2012 9:00am.
(6) textbook