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An effective ways of calculating unemployment and types of it - Essay Example
Unemployment arises when there is no work for a person who is seeking work and is available for work. Unemployment rate is the method used to measure the prevalence of unemployment, and is defined as the percentage of those who are unemployed in labor force…
Unemployment can be due to various reasons, some of which are, seasonal layoffs, racial discrimination, technological advancements and changes in the industries, fluctuations in economies, and lack of required skills by the worker. Seasonal layoffs occur in the field of agriculture. The increased focus on automation due to growing technology has also increased the level of unemployment.
Unemployment in developing countries is usually caused urban migration that leads the industrial development required to employ these migrants. In developed industrial nations the main cause of unemployment is due to depressions and economic recessions. "The Great Depression brought massive impoverishment. At its depths in 1933, the unemployment rate skyrocketed to over 25 per cent, a dramatic increase from the unemployment rate of slightly over 4 per cent four years earlier" (Frager and Patrias 80).
Different policies of unemployment are suggested by different schools of economic thought. For example, Monetarists believe that employment will increase in the long run if inflation is controlled and growth and investment is encouraged. Keynesians believe that emphasis should be given to smoothing business cycles by controlling aggregate demand.
Frictional unemployment arises when a person is searching for a job after quitting one job. ...