Definition
- Cyclical unemployment
- Cyclical unemployment is the rise in unemployment that occurs because of a recession, when firms want less labour and wages do not fall to match.
Example
Can you think of an example of cyclical unemployment?
A bricklayer loses work when a recession cuts house-building. When spending recovers and builders start new estates again, he is hired back, because the kind of job he lost has returned.
Test yourself
Can you name five types of unemployment?