Types of Unemployment We begin by categorizing the common definitions of unemployment. Seasonal unemployment refers to changes in employment that follow recurring patterns through the years. Construction workers, people who fish for a living, and lifeguards all face layoffs during the winter months. Consequently, the number of unemployed rises and statistics need to be adjusted accordingly to deal with temporary changes in the number of unemployed. This will prevent needless volatility in the unemployment rate that does not accurately reflect the status of the economy.
Structural unemployment represents a mismatch between supply of labor and demand for workers.
Of all the unemployment categories listed here, structural unemployment represents the most significant long-term problem for economic policymakers. Individuals who fall into this category have trouble finding jobs because of a lack of adequate skills or regional employment problems. These people have the greatest potential to eventually become discouraged workers. Occupational unemployment results from a mismatch between the demand and supply of labor in specific industries. The demand for workers in growing fields such as health care may exceed the supply of available workers, while the supply of labor in declining areas may be in surplus.