Question

For each case below, please state if the person mentioned is unemployed for Frictional, Structural, or Cyclical reasons. Please state your reasoning for each answer.

(a) Pak left the military and is now looking for work as an auto mechanic.

(b) Sue quit her job as a part time college instructor in order to pursue her teaching credential at a local university.

                                                                                                       

(c) John lost his job as a truck driver due to the greater use of self-driving technology.   

(d) Mary lost her job as a high school teacher due a statewide budget reduction.

Answer 1

a. Sometime people quit their current job and search for another job. This type of unemployment is known as frictional unemployment which is otherwise known as search unemployment. Pak left his current military job and is searching for an employment as auto mechanic. Then he is unemployed by frictional reasons.

b. Sue is also frictionally unemployed since he left the current job and is looking for another job. His unemployment is also due to frictional reasons.

c. Structural unemployment occurs when there is a structural change in an industry or the economy. Due to change in technology the skill of a worker does not match the skill requirement of the industry. The use of self driving technology make John unfit for the industry because his skill is not enough for the new industry. John suffers from structural unemployment.

d. Cyclical unemployment is another type of unemployment. This type of unemployment arises out of trade cycle. During times of recession the firms layoff their workers. Mary lost her job due to cyclical reasons.