Three Types of Unemployment - Assignment Example

Frictional unemployment is a form of unemployment that occurs due to the voluntary job search by employees for better opportunities. Frictional unemployment occurs as job seekers tend to look out for the desired options by ignoring the available options. For example, an accountant would not be interested in a job vacancy published by a hospital. Structural unemployment refers to the loss of employment due to changes in technological demands and changes in the operational process (Oswego, 2014). For example, the automation of machine systems in factories may lead to structural unemployment due to a loss of demand for labor.

Desirability of unemployment
The unemployment scenario is considered to be undesirable as it leads to a substantial gap between the potential GDP and the real GDP of the country. The reduction in the volume of products and services produced within the geographical boundary leads to the gap between the supply and demand in the market which finally leads to inflation in the economy (Schenk, 2014). However, all forms of unemployment are not undesirable as it has beneficial effects in the long run. For example, the loss of demand for the existing labor force may occur due to structural unemployment that results from the introduction of new technology and automated systems in the production process. Although it increases unemployment in the short run the gradual adaption of the workforce to the technologically improved processes leads to improvement in the operational efficiency and enhancement of the production volumes. In this view, a structural form of unemployment is not undesirable.

Effect of internet
The advent of the internet has the potential to eliminate frictional unemployment. This is because the spread of the internet and the World Wide Web has enhanced the power of voluntary job searches by candidates. Instead of readily available job opportunities, the candidates would look for the desired job opportunity voluntarily which would lead to the loss of jobs in certain sectors. However, there would be other candidates who would look for jobs in these sectors and the Internet would be a useful tool to provide them the information on the desired job vacancies. The activities on the internet comprise job notifications published by employers and searching various job portals by the employees. Thus the Internet would act as the perfect medium for interaction between employers and employees. The candidates would be able to find the right job through voluntary search and the employers would also be able to hire the right candidates by screening the information of the potential candidates. Read More