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What Are The Causes of Unemployment

Causes Of Unemployment

Blame for the causes of unemployment is a subject of dispute that is influenced by an economists approach to the market.

For a Keynesian economist, joblessness is the result of lacking effective demands for the goods and services that are available in the economy. This is known as cyclic unemployment.

Other economists have different explanations for the causes of unemployment. An economist who believes in structural unemployment identifies joblessness as a mismatch that develops between demand for laborers and supply of laborers who possess the necessary skill-set to fill the job. This mismatch may be blamed as having developed from technology or from globalization.

To a classical or neoclassical economist, their searches for the main causes of unemployment prefer to focus more strictly on outside forces which act on the labor market, identifying unionization, minimum wage laws, taxes, and other regulatory measures as factors that will discourage workers from being hired. This is known as classical unemployment.

Economists who subscribe to the idea of frictional unemployment believe that the major causes of unemployment is due to voluntary choices made by individuals who compare the value workers assign to their own work in comparison to the current rates of wages and the investment of time needed to find a new job.

Behavioral economics highlights the concepts as sticky wages and efficiency wages as two primary factors that can be the causes of unemployment.

Joblessness is one of the primary concerns of economists since the causes of unemployment often involve a combination of all of these factors.

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