• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Causes of Unemployment

Extracts from this document...


b) There are many causes to unemployment, which are split into categories. Frictional unemployment is transitional unemployment due to people moving between jobs such as workers entering the labour market, such as university graduates. It may take time to find an appropriate job. Many are only unemployed for a short time while looking for work. Structural unemployment occurs when people are made unemployed because of capital-labour substitution or when there is a long run decline in demand in their particular industry. ...read more.


Seasonal unemployment happens because certain industries see seasonal changes in demand and employment. Such examples include leisure and catering, retailing, tourism, agriculture and construction. Cyclical unemployment is involuntary unemployment due to a lack of aggregate demand. This type of unemployment is associated with the transition of the economy through the business cycle. When there is an economic recession, we expect to see a rising level of unemployment because of plant closures and worker layoffs. ...read more.


The diagram below illustrates the effect of the national minimum wage. Before the national minimum wage, demand was for 75 workers. After the introduction of the minimum wage rate, supply is 100 but the demand is only 50 leading to excess supply and unemployment increases. The supply of labour increased because more works make them selves available for higher paid employment. Technological unemployment is when unemployment is caused by technological progress. Machines replace the once labour intensive industries, as they are more efficient. Voluntary unemployment is workers who chose not to work at the going wage rate. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Macroeconomics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Macroeconomics essays

  1. Budget 2004-05 and Economic Analysis of Pakistan

    External debt and liabilities as percentage of foreign exchange earnings declined from 297 percent in 1999-2000 to 181 percent in 2002-03 and further to 169 percent by end-March 2004. EDUCATION: The education is becoming one of the defining enterprises of the 21st century with the emergence of globalization and increasing global competition.

  2. Identify the causes of unemployment and suggest suitable remedies

    If, however, as practice shows, the market does not clear, there is unemployment. One of the reasons for this is that incomes/wages/salaries fail to fall adequately to clear the market. Diagram showing the wage/quantity division: Wages are, initially, too high, so the result is the unemployment of 'ab' (supply is greater than demand).

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work