unemployment types

• Evidence for cyclical

  During covid, many people lost their jobs, particularly in service and travel industries because of lockdowns. This caused 36% of jobs in Air and Space Transport to be lost in Australia, illustrating the significant increase in cyclical unemployment due to the pandemic.
• Cyclical unemployment occurs when demand is deficient. It is associated with the downturn or trough phase of the business cycle, and is always involuntary. When the economy is slowing, demand for goods and services decline due to the lack of consumer confidence and decreasing incomes. As a result of this, businesses need to cut production costs as profit falls - this includes employees, who will now be unemployed.
• Frictional unemployment refers to people who have willingly left their job before finding another. This is the only type of voluntary unemployment and tends to be shorter in duration. It is usually higher in upswings or booms as confidence levels are high, meaning that workers will deliberately leave their job to find another that might be better suited to their skills or have a higher pay, because they feel more confident that they will be employed.
• Evidence Frictional

  Across Europe, 60% of talent managers in 2023 say that they can’t fill their skills gap as a result of younger workers quitting, who left to seek higher paying jobs to accommodate to the remaining high levels of inflation due to Covid.