Seasonal unemployment

Seasonal unemployment is a short term, temporary type of unemployment which is common in certain industries producing goods and services related to seasons of the year. Seasonal unemployment is the result of fluctuations in the demand for labour causing a temporary mismatch between the demand and supply of labour at particular times of the year.

Given that the demand for labour is derived from the demand for goods and services, the clue too seasonal unemployment lies in the changing pattern of demand throughout a year.

The construction and tourism sectors are particularly susceptible to seasonal unemployment in their 'off' seasons - generally, the winter months, or technically the 1st quarter of the year. Agricultural production is also seasonal, again with demand for labour falling during the winter months.

For example, data from Eurostat indicates that, between 2015 and 2020, EU unemployment in the 1st quarter was around 12% higher than the peak of employment in the 3rd quarter. [1]

Is seasonal unemployment a problem?

Given the seasonality of demand, it is not surprising that many labour markets exhibit a degree of seasonality. This is the main reason why labour market statistics are 'seasonally adjusted' to strip-out the effects of seasonal changes.  While seasonal unemployment is viewed as a minor type of unemployment in comparison with structural or cyclical unemployment, it can be problematic for particular locations (such as coastal towns) or in certain countries (such as those relying on seasonal tourism.)

The problem is most acute in developing countries which rely on tourism and agriculture.

Seasonality can particularly affect younger workers who may not have settled on a particular career and are job-hopping or working in the gig economy. [2]

On the positive side, seasonal work may provide employment to those who cannot find stable employment, and in this respect seasonal unemployment is a function of seasonal employment. Just as full-time jobs come typically come with a two-day weekend, seasonal jobs come with extended periods of unemployment.

It can also be argued that seasonality in the labour market adds to labour market flexibility, and, in turn, helps improve the competitiveness of an economy in international markets.

Structural unemployment

What is structural unemployment?

Structural unemployment

How can taxes regulate consumption?

Supply-side policy

How effective is supply-side policy?

Supply-side policy

[1] As reported by PESNetwork-