Question

discuss the differnet types of unemployment (structural, natural rate, cyclical and frictional) that are likely to be affected by this pandemic in kuwait.

Answer 1

Unemployment is a situation of being jobless and actively searching for job. Cyclical, structural , frictional and natural unemployment are the main types of unemployment

Cyclical unemployment occurred as a result of deficiency in aggregate demand. During recession, demand for goods and services decreases results in decline of production. As production declines, fewer workers are need.

Structural unemployment is a situation when labor market failed to provide jobs for everyone. It is because of the mismatch between the skills of workers and skills required for jobs.

When individuals searching for work or the period of transition from one to another job is referred to as frictional unemployment

Natural unemployment refers to the combination of structural and frictional unemployment.Natural unemployment is always present in every economy.

Covid-19 badly affects the individuals who are searching for work. New employment opportunities are not creating in Kuwait economy leads to high level of frictional unemployment.

Covid-I9 Pandemic situation created huge unemployment in Kuwait. As a result of low demand for commodities other than essential items results in lowering production. This leads to unemployment in Kuwait economy especially goods and services other than essential items. Thus Kuwait economy is now facing the problem of cyclical unemployment.

The entire production structure changed as a result of the prolonged pandemic situation. The lock down of Kuwait economy creates high unemployment among unorganized workers and workers from other countries.

The pandemic situations may move the economic to a recessionary situation. Deficiency in aggregate demand combined with low production and mounting government expenditure will reduce the employment opportunities.