What are the Causes of Unemployment | 10 Main Factors Explained

Unemployment is a widespread problem and is seen in almost all the countries in the world. The global recession is one of the leading causes, but there are other causes too.

The main causes of unemployment are

  • Financial aid from the government
  • Technological advancement
  • Lack of education
  • Overpopulation
  • Lack of resources
  • Corruption in the government and regulatory bodies
  • Health issues
  • Work habits or conditions
  • Lack of guidance
  • Personal reasons.
What are the Causes of Unemployment

Unwanted Financial aid from the governments

  • Many governments worldwide offer freebies like unemployment grants, food rations, widow pensions, etc.
  • These are considered good for the people who benefit from them. But, due to these benefits, they lose interest in hard work and taking up jobs.
  • Instead, they spend time with themselves and their family.
  • This fact is also known to the governments and is also a burden to the state. Yet, the parties in power wish to continue it for fear of losing votes.
  • Hence, you might have noticed few developed countries have gone into financial turmoil due to these schemes.

Technological advancement

  • The advancement of technology is one of the prime causes of unemployment. This has happened in two ways

a) Decrease in need for the human workforce.

b) Change in habits and mindset of people.

  • Due to technological advancement, many jobs that man did have decreased.
  • This is mainly related to physical jobs and, to some extent mind related jobs.
  • Due to the development of heavy machinery like excavators, road cleaners, and crop harvesters, the smaller jobs of laborers have declined.
  • This would further reduce in the future due to robotics and other advancements.

Due to computers, ATMs, and mobiles, the work of many clerks and technicians is decreased.

What are the Causes of Unemployment
  • Besides this, due to the technological use of automobiles, mobile phones, television, and cooking ware, man has become physically weak and lazy.
  • Due to this weakness and laziness, he is unable to take up heavy work. Even if he is willing, he will suffer from health issues.

Lack of education

  • Education is one of the prime factors which enables a person to work in many types of jobs anywhere in the world.
  • Education has lifted many families out of poverty in a very short span of time.
  • Lack of education leads to inhibition of communication and confidence in the individual to take up well-paid and comfortable jobs.


  • If you notice, the rate of unemployment is low in countries with less population.
  • This is because every state has certain limits on the availability of resources that need to be worked on.

Lack of resources

  • As mentioned in the previous point, the presence of resources is essential to generate employment.
  • In the past, the main resource was agriculture, mining, office jobs, etc.
  • But still, this requires education, and the resource can get overfilled quickly unless the population is limited.

Corruption in the government and regulatory bodies

  • This is the cause of unemployment due to corruption and irresponsible people in positions. Let us take an example of this.
  • A college or educational institute needs to hire sufficient staff corresponding to the students enrolled.
  • However, the college enrolls students but does not hire faculty to save money.
  • Here the lack of employment occurs genuinely out of greed from the owner.
  • The authorized inspecting officers keep approving the college by accepting bribes from the college.

Health issues

  • A person cannot work if he is not healthy, both physically and mentally.
  • Even if he is disabled, he will find it difficult to get into desired employment.

Work habits or conditions

  • The environment at the workplace plays a great role in deciding employment.
  • If the work environment is comfortable, then employees would not like to work there.
  • Sometimes, there would be extra work without pay as governments do not enact strict labor laws.

Lack of guidance

  • Many young people require proper guidance in planning their careers.
  • Some of them, due to wrong steps taken, would end up having no job.
  • Guidance in a career or education would be an important step toward employment.

Personal reasons.

  • Many do not opt for employment for personal reasons like spiritual life, family demands, incompatibility with work habits, etc.

Frequently asked questions and answers.

What are the causes of graduate unemployment?

Graduates with higher education tend to find it hard to perform mean jobs. On the other hand, they might not have sufficient skills to land their desired jobs.

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