Voluntary unemployment refers to a situation when a person is unemployment because he is not willing to work at the existing wage rate. On the other hand, Involuntary unemployment refers to an unemployment in which all those people, who are willing and able to work at the existing wage rate, do not get work.
The distinction is significant to determine the total unemployment in an economy. Voluntary unemployment is not counted while estimating the size of unemployment. While involuntary unemployment is considered while estimating the total unemployment in an economy.
