To put it very simply, unemployment means ’without a job’. However, this definition is too simplistic, as there may be many reasons why people don’t have a job. Babies don’t have jobs for example, are they unemployed?
For this reason, economists refer to someone who is unemployed as a person who is actively seeking a job but is unable to find one.
When countries refer to their unemployment rate, this is also age dependent and only measures people who are of working age according to the laws of that country.
Icons made by Freepic and Photo3ideastudio from www.flaticon.com
Key terms:
Cyclical unemployment – increasing unemployment throughout an economy due to falling levels of demand for all goods and services.
Structural unemployment – unemployment which is the result of a change in the structure of an economy such as jobs being replaced by automated machines.
Unemployment rate – the percentage of the working age population which is classified as unemployed.