Unemployment caused by the recession of 2008-2010 is an example of which of the following types of unemployment?

Question

Question

This question was previously asked in

SSC MTS (2022) Official Paper (Held On: 03 May 2023 Shift 2)

Answer 1

The correct answer is cyclical unemployment.

Key Points

Unemployment occurs when there are changes to an economy’s business cycle is termed Cyclical Unemployment.
Cyclical unemployment is termed as demand deficiency i.e. unemployment starts to rise when demand falls.
Causes for Cyclical Unemployment
- The decline in Demand contributes to less investment in business hence requiring fewer employees.
- Negative multiplier effects when demand falls this affects stores, farmers manufacturing workers,s and also those investing in transporting these goods and products which results in further affecting multiple areas.
- A bad Market Crash can cause a recession by instilling a loss of confidence in an economic decline in employers looking to hire and expand can be seen.
Therefore, Unemployment caused by the recession of 2008-2010 is an example of Cyclical Unemployment.

Additional Information

Structural unemployment occurs when there is a mismatch between available jobs and available workers' talents. Many people in India struggle to find work because they lack the necessary skills, and training them is difficult due to a lack of knowledge.
Frictional unemployment is the result of employment transitions within an economy where workers voluntarily leaving their jobs and new workers enter the workforce.