Unemployment is the share of people of working age who are not employed and who have actively sought employment in the past four weeks. This figure is an important economic indicator, as a high unemployment rate implies that the economy is struggling.
In order to measure unemployment, governments conduct monthly surveys that ask individuals about their job search activities. These surveys are conducted by trained interviewers using standardized questions. The data from these surveys are used to calculate a country’s unemployment rate.
There are several types of unemployment, including structural unemployment (jobless workers with skills and education matching those of available jobs), cyclical unemployment (unemployment caused by changes in the economy), and seasonal unemployment (unemployment related to a change in demand for goods and services). Governments also count workers who receive unemployment insurance benefits as being unemployed.
The most common statistic that is reported is the headline unemployment rate, U-3, which counts those who are out of work and looking for a job. Other statistics, such as U-6, add to that number by counting those who are marginally attached to the labor force, those who want a job but have stopped looking for one because they believe there are no jobs available, and those who are working part-time but would prefer full-time work.
Unemployment has many negative effects, both on the individual who loses his or her job and on society as a whole. This is because unemployed people do not produce the goods and services that they could be producing. The fact that so many people are unemployed can lead to economic stagnation or even recession.
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