Question

What is meant by seasonal unemployment?

Answer 1

Seasonal unemployment occurs when people are unemployed at particular times of the year when demand for labour is lower than usual. Seasonal unemployment refers to a temporary window of time where the number of available employment opportunities decreases.

1. Seasonal Unemployment or Cyclical Unemployment name is derived from the frequent ups and downs in the business cycle.
2. When the business cycle is down, fewer workers are needed, due to reduced production, this is due to reduced demand for goods and services. Since only a few workers are needed, it results in unemployment.

Unemployment – Meaning

Unemployment is measured by the unemployment rate, which is the number of people who are unemployed as a percentage of the labour force.

As per OECD (Organisation for Economic Co-operation and Development), unemployment is defined as the number of persons above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the reference period.

Unemployment – Causes

1. Policies of the government
2. New inventions and advancements made in new technologies.
3. Increased competition caused by increasing international trade and globalization.
4. Market and Regulation
5. Recession in the economy of a nation.

Unemployment – Different Types

1. Frictional Unemployment
2. Structural Unemployment
3. Classical Unemployment
4. Involuntary Unemployment
5. Cyclical Unemployment or Seasonal Unemployment

Involuntary Unemployment

1. Economists have several theories like disequilibrium theory, implicit contract theory, explaining the possibility of involuntary unemployment.
2. When a person is willing to work at the prevailing wage yet is unemployed is known as Involuntary unemployment .
3. In an economy when there is surplus of labor at the current real wage it leads to involuntary unemployment.

Frictional Unemployment

1. In this type of unemployment, a person may be looking for a job change due to dissatisfaction in the earlier job or for better salary, services, opportunities, and wages.
2. It is time spent between jobs when a worker is transferring from one job to another or searching for a job.

Structural Unemployment

1. When a labour market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills needed for the available jobs and the skills of the unemployed workers, it leads to Structural unemployment.

Classical Unemployment

1. Number of job-seekers exceed the number of vacancies, when real wages for a job are set above the market-clearing level. This situation results in Classical, or real-wage, unemployment.