Unemployed is defined as not working and actively looking for work (so people not looking are not unemployed, they just don't have a job).
There are 3 basic types of Unemployment:
Frictional: the lag between starting to look for work and actually getting a job. Always occurs.
Structural: the mismatch of skills/education between available workers and available jobs (an unemployed plumber can't take a job as a surgeon). Always occurs.
Cyclical: overall lack of jobs due to the business cycle, poor economic climate, recession, etc.
The Natural Rate of Unemployment, also known as full employment is considered to be when there is no Cyclical Unemployment, only Frictional and Structural. Basically, it means that there are plenty of jobs for everyone and the only reason people are unemployed is because of the lag in searching, or no jobs in their area match their skills.
· 6 years ago