July 20, 2024 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
RISK POOLING: Combining the uncertainty of individuals into a calculable risk for large groups. For example, you may or may not contract the flu this year. However, if you're thrown in with 99,999 other people, then health-care types who spend their lives measuring the odds of an illness, can predict that 1 percent of the group, or 1,000 people, will get the flu. The uncertainty is that they probably don't know which 1,000 people, they only know the number afflicted. This little bit of information is what makes risk pooling possible. If the cost is $50 per illness, then an insurance company can insure your 100,000-member group against flu if they collect $50,000 ($50 x 1,000 sick people), or 50 cents per person. By agreeing to pay the cost of each sick person in exchange for the 50 cent payments, the insurance company has effectively pooled the risk of the group.

Visit the GLOSS*arama


Unemployment attributable to relatively regular and predictable declines in particular industries or occupations over the course of a year, often corresponding with the climatic seasons. Unlike cyclical unemployment, which may or may not occur at any given time, seasonal unemployment is an essential part of many jobs. For example, a regular, run-of-the-mill, department store Santa Clause can count on 11 months of unemployment each year. Seasonal unemployment is one of four unemployment sources. The other three are cyclical unemployment, frictional unemployment, and structural unemployment.
Because seasonal unemployment is relatively regular and moderately predictable, it is generally considered part of the "conditions of employment." Construction workers can expect unemployment during the winter months or periods of inclement weather. School teachers regularly face unemployment during the summer. The employment of farm workers varies in a predictable manner with the end of seasonal planting and harvesting activities.

Workers accepting employment in these occupations and industries are generally aware of these conditions, and wages are often paid accordingly. In fact, it is not unreasonable to think of seasonal unemployment as vacation time. For these reasons, seasonal unemployment is largely ignored in the study of the macroeconomy that is concerned with business-cycle instability and cyclical unemployment.

As might be expected, Shady Valley, a thriving hypothetical community with four distinct climatic seasons every year, runs rampant with seasonal unemployment. Here are a few examples:

  • Harold "Hair Doo" Dueterman, the superstar outfielder of the Shady Valley Primadonnas baseball team is officially employed from April through September of each year. He is then seasonally unemployed from October to March. This particular employment schedule works out just fine for Hair Doo, as he spends the "off season" vacationing in the Bahamas with his family and members of his superstar entourage.

  • Spunky and peppy Alicia Hyfield is employed during the summer months to operate the Monster Loop, Death Plunge Roller Coaster at the Shady Valley Amusement Park. This is her job and she is very good at it. But from September to May, Alicia is out of work, she is seasonally unemployed. This also works out fine for Alicia, because she uses her "off season" to attend Shady Valley High School.

  • Duncan Thurly is employed as an assistant professor at the Ambling Institute of Technology during the nine-month academic semester from September through May. He occasionally picks up summer employment at the Institute teaching a class or trimming the President's grass. However, during most years, he has no summer employment and is seasonally unemployed. This is not such a bad deal for Duncan, who uses his "off season" repainting his kitchen cabinets.

  • Dan Dreiling is a self-employed drywall installer. During the spring and summer months, when home construction is booming, Dan is quite active. However, during the winter months, when cold, inclement weather keeps construction down, Dan generally finds himself seasonally unemployed. Dan would rather be working during these slow periods, but he manages to get by and he earns enough during the booming months to maintain a suitable lifestyle. Like Duncan Thurly, he also using his "off season" repainting his kitchen cabinets.

The Bad

The bad of seasonal unemployment is the same as that for any type of unemployment. Unemployed workers suffer personal hardships and the economy in general loses production.
  • Personal hardships, however, are a matter of degree. While some seasonally unemployed workers might prefer to remain employed, others use the unemployment as vacation time. Dan, the drywall guy, does NOT want unemployment. Hair Doo, the baseball guy, needs the off season to recover from the exertion of the season. And spunky Alicia, the roller coaster gal, would find high school exceedingly difficult if not for seasonal unemployment. All in all, personal hardships are not THAT bad for seasonal unemployment.

  • However, like other forms of unemployment, lost production is important. Hair Doo, Alicia, Duncan, and Dan are NOT producing consumer-satisfying goods when they are seasonally unemployed. Society has fewer goods and less satisfaction.

The Good

The good of seasonal unemployment results because it is part of the "conditions of employment." In much the same way that weekends, holidays, and two-week vacations are "part of the job," so too is seasonal unemployment for most jobs. Seasonal unemployment can actually be considered "built in" unpaid vacation time. Many people seek out occupations and industries that have periods of seasonal unemployment. Alicia Hyfield would NOT care to work at the Amusement Park if it meant year-round employment. Duncan Thurly actually chose a career in academia because it included summers off.

And The Policies

Given the "conditions of employment" associated with seasonal unemployment, there is not really a lot that needs to be done, at least not from a public policy standpoint. It might be possible for the government to make bad weather illegal, but short of that, seasonal unemployment is an excellent example of the saying "the best government is the least government."

However, this is not to say that productive innovations might not reduce and or eliminate seasonal down times and unemployment. For example, an indoor doomed baseball stadium would let Hair Doo Dueterman remain employed 12 months a year (if the public is willing to pay to see his baseball services). In a like manner, pre-fabricated housing, manufactured in an indoor factory, could eliminate Dan Dreiling's seasonal unemployment. Year-round classes would keep Duncan Thurly employed as a professor during the summer.

The key with such changes largely rests with the buying public. Should the public demand 12 months of baseball and education, then the producers would likely find ways to accommodate. If the demand for housing by the buying public is such that producers can afford to make use of pre-fabricated buildings assembled in factories, then they are likely to accommodate. While seasonal climates can and do play a role in some seasonal unemployment, much of it is merely the result of seasonal changes in demand. Should demand change, then come rain, snow, sleet, or hail, producers are likely find ways to undertake the production that keeps resources employed.


Recommended Citation:

SEASONAL UNEMPLOYMENT, AmosWEB Encyclonomic WEB*pedia,, AmosWEB LLC, 2000-2024. [Accessed: July 20, 2024].

Check Out These Related Terms...

     | unemployment sources | cyclical unemployment | frictional unemployment | structural unemployment | natural unemployment | unemployment rate | Current Population Survey | labor force | unemployment problems | employment-population ratio | alternative unemployment rates | unemployment reasons |

Or For A Little Background...

     | unemployment | factors of production | full employment | business cycles | contraction | recession | circular flow | macroeconomic goals | macroeconomic problems |

And For Further Study...

     | labor force participation rate | unemployment, production possibilities | full employment, production possibilities | macroeconomic sectors | Bureau of Labor Statistics | real gross domestic product | macroeconomic markets | resource markets | inflation | stabilization policies | government functions | inflation |

Related Websites (Will Open in New Window)...

     | Bureau of Labor Statistics |

Search Again?

Back to the WEB*pedia


[What's This?]

Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club trying to buy either a T-shirt commemorating the second moon landing or a coffee cup commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki. Be on the lookout for small children selling products door-to-door.
Your Complete Scope

This isn't me! What am I?

A scripophilist is one who collects rare stock and bond certificates, usually from extinct companies.
"When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left, and could say, I used everything you gave me."

-- Erma Bombeck, writer

Human Development Index
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback

| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2024 AmosWEB*LLC
Send comments or questions to: WebMaster