Different Types of Unemployment and Their Disadvantages

Distinguish between rural unemployment and urban unemployment

1. Rural Unemployment

Rural unemployment is defined as the percentage of people who are unemployed in rural areas compared to those that are employed in urban areas. Rural areas have a lower unemployment rate than urban areas. This is because many people in rural areas do not want to leave their homes. They prefer to stay where they live instead of moving to other places just to find work. Also, many people in rural areas are self-employed, which means that they do not need to look for employment elsewhere.

2. Urban Unemployment

Urban unemployment is defined as the percent of people who are unemployed within urban areas. Urban areas have a higher population density than rural areas. Main reason for unemployment in urban areas is high competition and lack of practical skills. The number of people who are unemployed in urban areas is much higher than that of those who are unemployed in rural areas. In fact, the unemployment rate in urban areas is twice as high as that of rural areas. This can be attributed to the fact that many jobs in urban areas require a college degree, while only a high school diploma is needed in rural areas. Another reason is that many people move from rural areas to urban areas in search of better paying jobs, which in turn increase competition.

Read: 4 Possible Reasons for Youth Unemployment in Many Countries

Disadvantages of unemployment

1. No income

2. No savings

3. No retirement plan

4. No health insurance

5. No pension plan

6. No job security

Read: Is losing your job the end of the world, unemployed and frustrated?

Different type of unemployment

Different type of unemployment
Different Types of Unemployment and Their Disadvantages 3

1. Frictional Unemployment

Frictional unemployment occurs when people are not working due to lack of skills or education. This can occur if they do not have access to training or education that would allow them to work in their field of interest. Frictional unemployment is a problem that has been around since the beginning of time, but it has become increasingly prevalent in today’s world.

2. Cyclical Unemployment

Cyclical unemployment occurs when the economy experiences a period of economic expansion followed by a recession. This can occur due to several factors including changes in consumer spending habits, government policies, and business cycles. These layoffs may happen gradually over time or suddenly. When this happens, individuals who have been laid off from their jobs are no longer receiving income. As a result, they become unemployed.

3. Structural Unemployment

Structural unemployment is a term used to describe the situation where people are out of work but not looking for employment. This is different from cyclical unemployment, which occurs when people lose their jobs due to economic fluctuations. Structural unemployment can occur when there are structural changes that prevent certain groups of people from finding employment. These structural changes include automation, globalization, and offshoring.

4. Institutional Unemployment

Institutional unemployment is defined as the number of people who are unemployed but have not actively searched for work. This can include those who are discouraged from searching for work, those who are underemployed, and those who are employed but do not want to search for other employment. A large percentage of the population is either discouraged from looking for work or is underemployed. When these individuals stop participating in the workforce, they are no longer contributing to the economy. As a result, the government spends money on programs and services that are meant to help them find jobs.

Read: Why is being educated and unemployed a peculiar problem in India? Unemployment and its types

Open unemployment meaning:

Open unemployment refers to the number of people who are unemployed but are actively looking for employment.

This can occur due to several reasons including:

  • having no access to information about jobs
  • not knowing how to apply for a job
  • People who have been dismissed from their current employment
  • Unemployed people who do not want to register themselves as looking for work
  • People who have stopped actively seeking work

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