Investopedia explains 'Unemployment'
Many different variations of the unemployment rate exist with different definitions concerning who is an "unemployed person" and who is in the "labor force." For example, the U.S. Bureau of Labor Statistics' commonly cites the "U-3" unemployment rate as the official unemployment rate but this definition of unemployment does not include unemployed workers who have become discouraged by a tough labor market and are no longer looking for work.
The various schools of economic thought differ on their explanation of the cause of unemployment. Keynesian economics proposes that there is a “natural rate” of unemployment because the skills of laborers and the positions available are slightly out of sync even under the best economic conditions. Neoclassical economics postulates that the labor market is efficient if left alone, but that various interventions, such a minimum wage laws and unionization, put supply and demand out of balance.
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