Types of Unemployment

There are several kinds of unemployment rate as follows.

Open Unemployment

Open unemployment is a condition in which people have no work to do. They are able to work and are also willing to work but there is no work for them. They are found partly in villages, but very largely in cities. Most of them come from villages in search of jobs, many originate in cities themselves. Such employment can be seen and counted in terms of the number of such persons. Hence it is called open unemployment. Naked unemployment is another term used for open unemployment.

Structural Unemployment

It occurs due to structural changes in the economy. Structural changes can be due to change in technology (from labour intensive technology to capital intensive technology) or change in the pattern of demand. In a developing country like India, structural unemployment exists both in the rural and the urban areas.

Frictional Unemployment

It occurs when a worker is shifting from one job to the other. During the mobility period, he may unemployed for some time. It is a temporary phenomenon. In other words, Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. It is sometimes called search engine and can be voluntary based on the circumstances of the unemployed individual.

Cyclical Unemployment

It occurs because of cyclical fluctuations in the economy. Phases of boom, recession, depression and recovery are typical characteristics of a capitalist economy. In boom phase, high level of economic activity results in high level of employment whereas recession and depression phases marked with low demand results in more unemployment and during the recovery phase unemployment is slowly reduced.


It is a situation under which employed people are contributing to production less than they are capable of. It can be in terms of time (visible under-employment) or type of work (invisible under-employment). Part-time workers come under this category.

Disguised Unemployment

A disguisedly unemployed person is the one who seems to be employed but actually he is not. His contribution to the total output is zero or negligible. When more people are engaged in a job than actually required, a state of disguised unemployment is created. It is mostly seen in rural areas.

Seasonal Unemployment

It occurs only during seasonal months of the year. In India, it is very common in agriculture sector. In certain type of industries also this type of unemployment is found. Disguised unemployment and seasonal unemployment are two most common types of unemployments found in rural India particularly in farm sector.



  • Mrinal Shastry

    Precisely perfect

  • Aadhithya karna

    So concise and crisp…