Table of contents1. Introduction2. Unemployment in Australia3. Types of Unemployment3.1 Cyclical Unemployment3.2 Frictional Unemployment3.3 Structural Unemployment4. Cost of Unemployment5. Policies Implications6. Conclusion

Introduction:Unemployment is the indicator that reflects the heath and prosperity of economy, in other words if unemployment in any country has increasing trend, countrys economic condition would not be sound as compared to economy which has low rate of unemployment. Unemployment refers to the stage where one individual is rationally looking for a work, but not able to find it. Indicator that is used to measure the unemployment is unemployment rate. Unemployment rate is calculated by number of persons who are unemployed divided by the total number of work force. The purpose of this report is to understand the different aspects of the unemployment and its impact on economy and an economic decision that has to be taken to reduce the unemployment rate which in turns can be prove to be a better off of the countrys growth.Unemployment in Australia:Unemployment in australia is always a key issue for policy makers, unemployment rate is defined as percentage of workforce who are unemployed and willing to do paid jobs, this rate is one of the most sought after statistic rate because a increase in rate is considered as weak economic activities and in turns impact the growth of the country and vice versa. As per bureau of statistics, unemployment rate have seen a rise from 6 percent to 6.4 percent in July 2014, which was at its 12 year high, this was the worst unemployment data since august 2002. On the same time the youth unemployment data have also seen drastic increase and hit 14 percent. This level was also highest since october2001, and the data from department of social services for august shows that since the end of 2012 the number of new start recipients have increased by 36 percent to record level of 500000 approx, it is almost double since 2008. Even as per the article by IMF have also estimated that Australia can have worst unemployment rate in asia pacific region over next two years and have prediction of unemployment rate of 6.2-6.4 in 2014 and 6-6.1 in 2015, presently the jobless data by Australian bureau of statistics revealed that unemployment rate have surged to 6.3 in November 2014.

Major types of Unemployment:Cyclical unemployment:Cyclical unemployment refers to the stage where work force tend to lose their work due to aggregate fall in the economy, when this fall persist for a long term then it can lead to long term unemployment. Cyclical unemployment occurs when there is decrease in economic activity in any country, for example in case of recession and depression, unemployment will be high and unemployment will be lowest in case when economy is booming. For examples in the years 2000 to 2001 and 2005 to 2007 the Australian and global economy was booming so more jobs were available, demand for labor was quite high, and in vice versa case in years 1992-93 and 2009-08 there was great recession, fall in aggregate demand and demand for labor decreased hence results in cyclical unemployment.Structural unemployment:Structural unemployment exists when labor market is not able to provide the work to everyone who wants it because of mismatch between the jobs available and the skills of individuals looking for jobs, there, in other words the unemployed individuals have the skills that are not highly demanded and the people does not have those skills that are highly demanded by respective industry. Structural unemployment generally has a long term phase, as providing each and every individual with the training for specific job is not so easy. Seasonal unemployment is no doubt a kind of structural unemployment when the skills of an individuals are in high and low demand as per the season for example pool lifeguards etc. Frictional unemployment:Frictional unemployment happens when a individuals have lost their jobs and are in the process of searching a new job for them. There is not much that can be done to reduce this type of unemployment. This is quite evident with this type of unemployment that there can never be full employment in any economy as there will always be some workers who are changing their jobs at some point in time. As in this case of unemployment there is only short time that individuals take to change their jobs hence this is a short term unemployment.Cost of unemployment:Unemployment is one thing that anyone in this whole world would never like to see, as losing a job not only affect the individual and their family but society and country equally. So basically there are below mentioned types of costs that comes into picture when there is unemployment.Cost to Individual:The cost of unemployment to individual is not hard to think, there is generally a instant impact on the standard of living of any individual as after losing job, he wont be able to survive for large amount of time on the savings. Family of individual gets affected drastically, at one point of time, savings of individual will be spend and live peacefully and with required standard of living. Even if some of unemployed individuals who are eligible for unemployment benefits of other government benefit (such as food benefits) are hardly able to fulfill their normal routine desires. Long term unemployment also results in loss of skill set and during the phase of unemployment individuals tend to lose their focus on their future planning.Cost to society:The cost of unemployment to society is not easy to measure, but it can be observed in the way people react to any individual who is unemployed. As per general studies ofter a unemployed is less likely to involved in social activities and more likely in crimes, which can further distress the society as a whole.Cost to country:The economic cost of unemployment is very much common aspect that one can relate to cost that country will bear. Because of unemployment there will be higher spending by government in terms of unemployment benefits, food assistance and Medicare benefits. And on the other hand government is no longer collecting the same amount of tax from the individual who have lost his job.Policy implications:Policy formulation is important to tackle the problem of unemployment, but these policies can be differentiated based on the types of unemployment that has to be addressed. Below mentioned are the policies that can be made to reduce unemployment in an economy: The policy that can be made to reduce cyclical unemployment is to increase in government spending i.e. expansionary fiscal policy or monetary policy should be infused in the economy. Structural unemployment can be addressed by providing job training and equips them with the qualities required by the marketplace so that jobs those are available in economy can be utilized by them and improve their future prospects. Frictional unemployment can only be reduced by providing free, transparent and clear information about the individuals and match them with the jobs available, by providing amenities to increase the flexibility, availability and locations. Conclusion:Unemployment is the major issue that every country has to tackle. As per the economic data, Australia has also seen record high levels of unemployment in past few years, in nutshell unemployment is detrimental to individuals as well as to economy as a whole, so to control the unemployment rate government has to take all possible measures like expansionary fiscal or monetary policy, providing education and training and connecting individuals with the employers.