Please discuss cases of cyclical, frictional and structural unemployment and identify groups that bear unusually heavy unemployment burdens.

Please discuss cases of cyclical, frictional and structural unemployment and identify groups that bear unusually heavy unemployment burdens.

 

 

Answer:

Cyclical uneployment-

This type of unemployment occurs due to business cycles in the economy. In the expansionary phase of economy employment increases due to excess demand of goods and sevices which is financed by cheap money. But when debt burden increases then central bank tighten the monetary policy and cycle reverse to the other side which is contractionary phase. In contraction phase due to less demand of goods and services the businesses are forced to reduce their employee base to survive. In this phase government steps in and spend on public works which creates jobs for unemployed people. Government sometimes run various benefit programs for these type of unemployed people.

Frictional unemployment-

This type of unemployment occurs when a worker left a job and to find other job it takes some time , so between these period person become unemployed which is known as frictional unemployment types.This types happened when worker is unaware of job market and was unprepared from the beginning.

Structural unemployment-

This is due to mismatch between skills employees have and skills company required. This type of unemployment happened when their was major technology shift and training and learning new stuff takes time.This type of unemployment is major phenomenon in current scenario because technology have changed many things and still changing so to be in the game worker must have to learn new stuff.

I think most dangerous types is cyclical and when economy is in recession or depression, this type of unemployment occurs at very large level and effect major people in the economy.Famous examples are mass unemployment in great depression of 1929 and after 2008 financial crisis.

Asked on February 15, 2018 in economics.
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