Macroeconomics 4.2b Frictional, Structural, and Cyclical Unemployment

structural unemployment

people out of work for long periods of times because they do not have right skills

frictional unemployment represents

represents People who quit old jobs to look for new ones People who take a week or so to move or go on vacation before starting a newly found job People who enter occupations, such as construction work, in which temporary layoffs are frequent but year round earning are good

frictional unemployment

short term, largely voluntary unemployment spells needed to match jobs and workers.

structural unemployment rates are higher for

some minorities

Workers without high school education are particularly susceptible to

structural unemployment

natural rate of unemployment

structural unemployment + frictional unemployment

If cyclical unemployment is in expansion or peak,

unemployed falls below normal, and cyclical unemployment is negative

If cyclical unemployment is in contraction or trough,

unemployed is higher than normal, and cyclical unemployment is positive

cyclical unemployment

Difference between actual rate of unemployment and natural rate of unemployment (within business cycle)

structural unemployment represents

People with few skills and without work experience needed to find steady work.