(a) Unemployment can be defined as a situation where those who are capable and willing to work cannot find jobs.
(b) Types of Unemployment are:
(i) Frictional unemployment: It arises when able bodied people are temporarily out of work due to lack of information about existing employment opportunities somewhere else, or time consumed in changing jobs.
(ii) Cyclical unemployment: This is unemployment attributed to the deflationary phase of a business cycle. It is caused by a general decline in the demand for goods and services.
(iii) Structural unemployment: This type of unemployment arises when there is a change in the industrial structures of a country or technological progress whereby some types of labour/services become irrelevant in production process.
(iv) Seasonal unemployment: Demand for some labour services exists only during certain season, e.g. farming during rainy season while demand for labour in road construction exists only during dry season.
(v) Disguised unemployment: This is a situation when manpower or any other factor of production is not efficiently utilized. (vi) Residual unemployment: This refers to the unemployable, e.g. handicaps.