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.