Refers to people of working age who are actively looking for a job but who are not employed. To calculate: $\frac{numberofunemployed}{labourforce}$

Hinderances to accuracy

• it does not include discouraged workers, those who are unemployed but dont want to look anymore
• no distinction between part time and full time
• underemployment
• black market
• Does not account for distribution by age, gender, groups.

Costs of unemployment

Economic costs

• Loss of real output
• Loss of income
• loss of revenue for government
• Exacerbates inequality by making rich richer and unemployed harder to find jobs

Social costs

• self esteem
• crime, violence.

Types of unemployment

• Structural unemployment: Changes in demand for labour, changes in geographical location of jobs.
• Frictional unemployment: Switching between jobs.
• Seasonal unemployment: Occurs when demand for labour changes on seasonal basis. Lifeguards, gardeners, farmers.
• Cyclical unemployment: occurs on the downturns of the Business Cycle. Also known as demand-deficient unemployment.

However, there are still Upsides of Unemployment