Unemployment is a widespread problem that impacts society in many ways. It results in financial instability, emotional distress, and reduced self-esteem for those affected. It also reduces national income, resulting in higher poverty rates and straining government resources. The cause of unemployment is complex, but the solution requires collaboration between government, businesses, and individuals. Policy implementation, education reforms, and a focus on skill development are essential to alleviate the issue.

A key measure of economic health, Unemployment is defined as the percentage of people who are either unable to find employment or who have stopped looking for work. It is a key indicator of an economy’s ability to produce goods and services for sale. The word ‘Unemployment’ is often used interchangeably with “labour force participation rate.” However, the term labour force refers to all people who are employed or are actively seeking employment. This includes those who are able to work but choose not to do so, such as students and those caring for children or elderly family members on a voluntary basis. It excludes those who are permanently unable to work, such as those with serious physical or mental disabilities or those who are ill.

Unemployment can be classified as cyclical, structural, or frictional. Cyclical unemployment is a result of economic downturns that lead to layoffs and cuts in production. Structural unemployment is the result of a mismatch between worker skills and industry demand. Frictional unemployment can occur when workers change jobs or industries, and it is common during periods of population growth.