Unemployment: Meaning, Types and Causes – Transport, Employment, Unemployment and Their Impact on the Economy (Senior 6 General and Religious Studies) | Ganzaa

Transport, Employment, Unemployment and Their Impact on the Economy

Lessons

Senior 6 · General and Religious Studies

Transport, Employment, Unemployment and Their Impact on the Economy

4 lessons

Lesson 3 of 4

Unemployment: Meaning, Types and Causes

25 min

Who counts as unemployed?

Three young people finished Senior 6 together. Aline spends her days searching job adverts and visiting firms in Musanze; she has not worked at all this week. Eric has decided to rest at home for a year before applying to university. Jean is paid to help in a shop three mornings a week; he wants full-time work, but has stopped looking because he believes there is none nearby.

Only one of them counts as "unemployed" in official statistics. Which one, and why does it matter? To measure unemployment, statisticians need exact definitions. This lesson gives them, applies them to Rwanda's latest figures, and then asks why unemployment happens.

Definition

Unemployed person (ILO definition used by NISR): a person of working age who, during the reference period, (1) did not work even one hour, (2) was available to start work, and (3) was actively looking for work.

Unemployment rate: the unemployed as a percentage of the labour force: $\text{unemployment rate} = \frac{\text{unemployed}}{\text{labour force}} \times 100$ .

Time-related underemployment: working fewer hours than one wants and is available to work.

Potential labour force: people who want work but are not counted as unemployed because they are not actively searching or not immediately available, including discouraged job-seekers.

Labour underutilisation: the total unmet need for work: the unemployed, the time-related underemployed and the potential labour force.

Applying the definitions

Aline is unemployed: she did not work, she is available and she is actively searching. Eric is outside the labour force: he is not looking for work. Jean is employed (he works some hours), but he is time-related underemployed because he wants more hours. Had he stopped working altogether, he would belong to the potential labour force, as a discouraged job-seeker. This is why NISR also reports labour underutilisation: in 2025 it stood at 56%, far above the 12.4% unemployment rate.

Figure 3: how the working-age population is divided, Rwanda, 2025 (NISR, Labour Force Survey Annual Report 2025). Drawn by Ganzaa.

Worked example: Rwanda's unemployment rate, 2025

Labour force: $4772705 + 676340 = 5449045$ , which NISR rounds to 5,449,044.

Unemployment rate: $\frac{676340}{5449044} \times 100 \approx 12.4\%$ , roughly one person in eight in the labour force.

Labour force participation rate: $\frac{5449044}{8541210} \times 100 \approx 63.8\%$ .

The trend

Figure 4: unemployment rate in Rwanda, 2019 to 2025 (NISR, Labour Force Survey Annual Report 2025). Drawn by Ganzaa.

Unemployment rose sharply in 2020 and 2021, when COVID-19 lockdowns closed businesses, schools and borders, then fell steadily to 12.4% in 2025. In 2025 it was higher among women (14.2%) than men (10.8%), higher among youth aged 16 to 30 (14.7%) than adults (10.8%), and higher among secondary-school graduates (16.0%) than university graduates (10.2%).

Types of unemployment

Type	Meaning	Example in Rwanda
Frictional	Short-term, while people move between jobs or search for their first job	A new graduate searching for a few months
Structural	A mismatch between workers' skills or location and the jobs available	Secondary-school leavers without the technical skills that firms want
Cyclical (demand-deficient)	Caused by a fall in total demand in a recession or crisis	The rise to 21.1% during the COVID-19 crisis of 2020 and 2021
Seasonal	Work exists only at certain times of the year	Farm labourers between planting and harvest
Technological	Jobs replaced by machines or software	Cashiers replaced by mobile payments and self-service
Disguised	More people in an activity than are needed, so some add nothing to output	Several adults working one small family plot

Causes of unemployment

Rapid growth of the labour force: each year many young people reach working age, faster than formal jobs are created.
Skills mismatch: education that does not match what employers need, which is why technical and vocational training (TVET) matters.
Low investment and a small formal sector: few large firms, and limited access to credit for those who want to start a business.
Economic shocks: pandemics, droughts, conflict in the region, or falls in world prices for exports such as tea, coffee and minerals.
Rural to urban migration: young people move to towns faster than urban jobs appear.
Technology: some routine jobs are automated.
Lack of information and networks: job-seekers do not know where vacancies are, or lack the contacts to reach them.
Attitudes: some graduates wait for an office job rather than take up self-employment or technical work.

Warning

"Not working" is not the same as "unemployed". A student, a retired person or someone not looking for work is outside the labour force, not unemployed. And the unemployment rate is divided by the labour force, not by the whole population. Mixing these up is the most common error in calculations.

Tip

Three tests. To classify a person, ask: did they work at least one hour? If not, are they available? Are they actively looking? Unemployed means no, yes, yes.

Important

Discuss. Rwanda's unemployment rate in 2025 was 12.4%, but labour underutilisation was 56%. Which figure gives the truer picture of young people's situation, and why might a government prefer to quote one rather than the other?

Professor Dave Explains: "Types of Unemployment: Frictional, Structural, Cyclical, and Seasonal". A short explainer of the four main types. As you watch, think of a Rwandan example for each.

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Practice

State the three conditions a person must meet to be counted as unemployed.
Classify Aline, Eric and Jean from the opening story, giving reasons.
A district has 40,000 employed and 6,000 unemployed people, and 30,000 people of working age outside the labour force. Calculate its unemployment rate and labour force participation rate.
Name the type of unemployment in each case: (a) a coffee picker out of work after the harvest; (b) a typist whose job is taken over by software; (c) a factory closing during a recession.
Using Figure 4, describe the trend in Rwanda's unemployment rate from 2019 to 2025 and explain the peak.
Explain why secondary-school graduates had a higher unemployment rate than university graduates in 2025.
"Population growth is the main cause of unemployment in Rwanda." Evaluate this statement.

Show answersHide answers

During the reference period the person did not work even one hour, was available for work, and was actively looking for work.
Aline: unemployed (not working, available, searching). Eric: outside the labour force (not seeking work). Jean: employed, because he works for pay, but time-related underemployed (works a few hours, wants and is available for more).
Labour force $= 40000 + 6000 = 46000$ . Unemployment rate $= \frac{6000}{46000} \times 100 \approx 13.0\%$ . Working-age population $= 46000 + 30000 = 76000$ , so participation rate $= \frac{46000}{76000} \times 100 \approx 60.5\%$ .
(a) Seasonal. (b) Technological. (c) Cyclical.
It rose from 15.2% in 2019 to a peak of 21.1% in 2021, then fell every year to 12.4% in 2025. The peak reflects the COVID-19 crisis, when lockdowns and closed borders cut demand and closed businesses.
Possible reasons: university graduates have more specialised skills that employers seek; secondary leavers compete for fewer suitable jobs and may lack practical or technical skills; graduates have wider networks. This is a sign of structural unemployment.
For: many young people enter the labour force each year, faster than formal jobs are created. Against: other causes matter as much: skills mismatch, low investment, shocks such as COVID-19 (which raised unemployment without any change in population) and limited credit. Unemployment fell from 2021 to 2025 while the population kept growing. Conclusion: population growth adds pressure, but the main causes lie in how fast and in what kind of jobs the economy creates.

Sources and credits

Labour Force Survey Annual Report 2025, National Institute of Statistics of Rwanda, March 2026, for the population counts, the unemployment rates and labour underutilisation.
Video: "Types of Unemployment", Professor Dave Explains, embedded from YouTube.
Definitions of employment, unemployment and labour underutilisation follow the International Conference of Labour Statisticians (19th ICLS, 2013), International Labour Organization, as used by NISR.

Written by Ganzaa: the opening story, Figures 3 and 4, the tables, the worked examples and the exercises.

1Who counts as unemployed?

2Applying the definitions

Worked example: Rwanda's unemployment rate, 2025

3The trend

4Types of unemployment

5Causes of unemployment

Who counts as unemployed?

Applying the definitions

The trend

Types of unemployment

Causes of unemployment