Question

Discuss the differences between frictional, structural, and cyclical unemployment. As a member of the labor force, are you employed? Unemployed? Explain the basis of your answer.

Answer 1

Frictional unemployment arises from the time it takes to switch from one job to another or to get the first job once someone graduated from college. i.e the time takes to search for jobs gives rise to frictional unemployment.

When technological advancement or due to the demand deficiency of certain industry forces someone to lose his/her job, it gives rise to structural unemployment. It is not caused by adverse economic situations which happen in the case of cyclical unemployment. This unemployment results basically from skill deficiency.

Unemployment that happens due to some adverse economic situations such as recession, where overall lack in demand forces firms to lay off workers is known as the cyclical unemployment. It depends on the movement of the business cycle from expansion to recession and so on.

Employed worker means someone who is getting paid for a job or who used to work but currently not working due to some illness. Hence as I am working in a school, I am employed.