Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What characterizes seasonal unemployment?

1. It arises from permanent job losses

2. It is caused by fluctuations in labor demand throughout the year

3. It involves long-term industry changes

4. It affects individuals only in specific regions

The correct answer is: It is caused by fluctuations in labor demand throughout the year

Seasonal unemployment is characterized by fluctuations in labor demand that occur throughout the year, tied to specific seasonal activities or events. Various industries, such as agriculture, tourism, and retail, see significant variations in hiring needs based on the time of year. For example, agricultural workers are often employed during planting and harvest seasons, while the tourism sector might see spikes in demand during summer or holiday seasons. As these seasons change, the demand for labor can rise and fall, leading to periods of unemployment for workers who are unable to find jobs outside of those peak times. This understanding highlights how seasonal employment is inherently linked to the cyclical nature of certain industries, rather than suggesting permanent job losses or long-term changes in industry structure, which are characteristics of different forms of unemployment such as structural or cyclical unemployment. Additionally, while seasonal unemployment might affect individuals in particular regions where these seasonal jobs exist, it is not exclusively restricted to certain geographic areas. It is actually a widespread phenomenon across various economies depending on the seasonal cycles of the industries present.