Unemployment

Unemployment occurs when a person is available to work and seeking work but currently without work. The prevalence of unemployment is usually measured using the unemployment rate, which is defined as the percentage of those in the labor force who are unemployed. 

The unemployment rate is also used in economic studies and economic indices Conference Board's Index of Leading Indicators as a measure of the state of the macroeconomics. Most economic schools of thought agree that the cause of involuntary unemployment is that wages are above the market clearing rate.

However, there are disagreements as to why this would be the case: the economists argue that in a downturn, wages stay high because they are naturally sticky, wages and union activity keep them high. Keynesian economics emphasizes unemployment resulting from insufficient effective demand for goods and services. 
 
Others point to structural problems, inefficiencies, inherent in labor markets structural unemployment. Classical or neoclassical economics tends to reject these explanations, and focuses more on rigidities imposed on the labor and other regulations that may discourage the hiring of workers classical unemployment.