Unemployment is when people actively looking for work cannot find suitable employment. It is a metric that shows the proportion of potential jobless workers. Unemployment is a significant gauge of the job market’s condition and the general well-being of the economy. There are various types of unemployment, which include:
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Frictional Unemployment:
Transitional unemployment is a short-term type of joblessness that happens when individuals are in the process of switching jobs or entering the job market for the first time.
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Structural Unemployment:
Structural unemployment occurs when job seekers’ skills and qualifications do not match the requirements of available jobs, leading to a lack of opportunities. The causes of structural unemployment may include technological advancements, economic changes, or shifts in industries.
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Cyclical Unemployment:
Cyclical unemployment is a type of joblessness arising due to economic cycle changes. When the economy goes through a downturn or recession, companies may lay off workers or shut down their operations, leading to a rise in the number of unemployed people.
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Seasonal Unemployment:
Seasonal unemployment is a form of joblessness linked to particular seasons or industries that undergo fluctuations in demand. A case in point is the agricultural sector, where workers may face unemployment during the period when there is less demand for their services.
It is advisable to start planning for unemployment before earning rather than waiting until you lose your job. This approach helps you achieve financial independence earlier and provides a safety net if you become unemployed.
Losing a job can be a very stressful experience, as it involves the challenges of job hunting and the strain of financial insecurity. Therefore, early planning can help alleviate some of these pressures.
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