Most governments strive to achieve low levels of unemployment. However, the types of policies differ depending on what type of unemployment they address.
Frictional Unemployment
Frictional unemployment is the period between jobs in which an employee is searching for or transitioning from one job to another. It exists because the labor market is not perfect and there may be mismatches between job-seekers and jobs before workers are hired for the right position. If the search takes too long and mismatches are too frequent, the economy suffers, since some work will not get done.
Governments can enact policies to try to reduce frictional unemployment. These include offering advice and resources for job-seekers and providing clear and transparent information on available jobs and workers. This can take the form of free career counseling and job boards or job fairs. The government can provide facilities to increase availability and flexibility - for example, providing daycare may allow part-time or non-workers to transition into full-time jobs, and public transportation may widen the number of jobs available to somebody without a car. The government may also fund publicity campaigns or other programs to combat prejudice against certain types of workers, jobs, or locations.
On the other hand, some frictional unemployment is a good thing - if every worker was offered, and accepted, the first job they encountered, the distribution of workers and jobs would be quite inefficient. Many governments offer unemployment insurance to both alleviate the short-term hardship faced by the unemployed and to allow workers more time to search for a job. These benefits generally take the form of payments to the involuntarily unemployed for some specified period of time following the loss of the job. In order to achieve the goal of reducing frictional unemployment, governments typically require beneficiaries to actively search for a job while receiving payments and do not offer unemployment benefits to those who are fired or leave their job by choice.
Structural Unemployment
Structural unemployment is due to more people wanting jobs than there are jobs available. The unemployed workers may lack the skills needed for the jobs, or they may not live in the part of the country or world where the jobs are available.
Public policy can respond to structural unemployment through programs like job training and education to equip workers with the skills firms demand. A worker who was trained in an obsolete field, such as a typesetter who lost his job when printing was digitized, may benefit from free retraining in another field with strong demand for labor .
Job Training Programs
Many organizations seek to minimize structural unemployment by offering job training and education to provide workers with in-demand skills.