types of unemployment 3wk
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As previously discussed in week one’s lesson Unemployment occurs when the number of people who are willing and able to work exceeds the number of jobs on the job market. The entire population isn’t taken into account when calculating unemployment rate, the ratio is based upon the number of unemployed people versus the number of people in the labor force however based on information grasp from week one’s lesson economist do not include everyone in the labor force, only those who are actively seeking employment. The three types of Unemployment are Structural unemployment; this occurs when there’s a mismatch between worker’s skills and the skills required for available jobs, Cyclical unemployment also known as deficient demand unemployment occurs when the demand for goods and services decreases forcing employers to lay workers off in order to stay in business and Frictional unemployment is a result of imperfect information resulting in normal job search according to week’s three lesson, frictional unemployment is sometime refer to as the good type of unemployment because it allows growth and better matches workers for jobs.
Structural unemployment and Cyclical unemployment are undesirable types of unemployment however according to information in this week’s lesson Frictional unemployment isn’t undesirable because it allows growth and better matches with jobs for example a college graduate seeking employment for his field of expert may lack the resources to find a job or jobs may not be available in that field rather than seeking employment in another field he decides to wait until jobs are available that wait time is considered as frictional unemployment. Friction unemployment can be reduced if not eliminated with the introduction of the internet; this option allows future employees to be informed of job opening of their choice. This can be done through numerous websites including social media.
Reference:
ECON102, LESSON 1: Measuring Aggregate Output.
ECON102, LESSON 3: Unemployment and Inflation
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