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http://econsecondyear.wordpress.com/
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I will be putting all notes, useful resources
and links to you tube clips on this
wordpress site.
This will be an important resource for your
exam !
 What
is unemployment in
economic terms
 What
are the different types of
unemployment

The term unemployment in an economic
sense refers to people who are willing
and able (i.e. not sick) for work, but
whom are not currently employed (e.g.
people on jobseekers allowance).

In short: Not working but seeking work

The unemployment rate measures what
fraction of the labour force cannot find
jobs. The unemployment rate rises during
recessions and falls during expansions.
This category include
students, homemakers and retired
people.
* Therefore not taken account in
unemployment figures. This is a common
misconception.
Frictional unemployment is the time period
between jobs when a worker
is searching for, or transitioning from one job
to another. It is sometimes called search
unemployment and can be voluntary
based on the circumstances of the
unemployed Individual.
* You may be considered frictionally
unemployed when you leave college. For
example : the time it takes from finishing
college and getting a job could be a
month or two.
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
Structural Unemployment :
A longer-lasting form of unemployment caused
by fundamental shifts in an economy.
Structural unemployment occurs for a number
of reasons – workers may lack the required job
skills, Or they may simply be unwilling to work
because existing wage levels are too low. So
while jobs may be available, there is a serious
mismatch between what companies need
and what workers can offer.
Structural unemployment is often influenced
by extraneous factors such as technology,
competition and government policy.
E.g. Many builders in Ireland are now out
of work due to changes in demand for
the economy. Many jobs that are
available require I.T. skills which many
builders may not have. So there is a
mismatch in what the employers want
and the skills that a potential labour
force have.
 Structural Unemployment is a longer term
issue than Frictional Unemployment.

Periodic unemployment due to seasonal
trends.
 Example: People who work in Tourism are
often affected. Many hotel workers are
laid off for the off season times.
 Industries such as
construction that are affected by the we
ather.

Unemployment due to contractions in
the economy
 When the economy does well there are
lots of jobs – this usually results in low rates
of unemployment
 When the economy does poorly – less
demand for employees and the
unemployment rates increase


Example : The post- boom recession in
Ireland
Cyclical employment is problematic
because no two cycles/recessions are
the same. So it is difficult to tell when
employment levels will increase.
Unemployment in an economic sense
refers to – people who are actively
seeking and able for employment, but
who have no job at present.
 People not considered unemployed:
Students, pensioners, homemakers.
 Four common types of unemployment:
Frictional, structural, seasonal, and
cyclical.
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