Types of Unemployment and Unemployment Benefits

Subject: Employee Management
Pages: 1
Words: 313
Reading time:
2 min
Study level: College

There are two main types of unemployment: involuntary and voluntary unemployment. Voluntary unemployment refers to when a person is unwilling to work anymore. Involuntary unemployment occurs when a person is willing to work but has not had any success in getting a job. There are four kinds of involuntary unemployment namely cyclical, frictional, seasonal, and structural (Dietrich & Möller, 2016). Marcelle worked in an automobile manufacturing firm. However, due to reduced demand for the firm’s products due to low incomes, he has been laid off. This is called cyclical unemployment when jobs are lost due to reduced demand for certain products.

Dominic initially worked full-time as a hair-dresser in Cincinnati. He now wishes to relocate to New York and has thus quit his job. This type of unemployment is known as frictional unemployment since it occurs when a person is in between jobs. On the other hand, Francine worked part-time at a ski resort during winter. During the summer, Francine does not work since there is no snow. This is called seasonal unemployment and occurs when the demand for workers fluctuates during the year. Dominic and Francine do not qualify for unemployment benefits since they are not actively looking for a job.

Lastly, Beauvoir worked full time as a secretary in an office. Though she was good at typing, she was laid off when her boss upgraded the office to have computers. This was because Beauvoir did not have the necessary computer skills to work in the new environment. Beauvoir now has to learn computer skills to remain in the job market. This type of unemployment is called structural unemployment and occurs when people are willing to work but there are either no jobs or they do not have the necessary skills to apply for the available ones. Marcelle and Beauvoir qualify for unemployment benefits since they are actively looking for a job.


Dietrich, H., & Möller, J. (2016). Youth unemployment in Europe–business cycle and institutional effects. International Economics and Economic Policy, 13(1), 5-25. Web.