Structural Unemployment and Cyclical Unemployment in the...

Introduction: The high and persistent levels of unemployment in the United States have become one of the most debated topics among economists, policy makers and the unemployed for more than a decade; especially its impact and best approach to resolving the increasing unemployment rates. It is important to note that as much of a global phenomenon unemployment it is, unemployment occurs in numerous forms, economists have broken down unemployment into three main types: Frictional, structural and cyclical. The in-cooperation of these forms is significant to this paper for better understanding of current trends and identifying characteristics of structural unemployment. ï‚ · Frictional Unemployment arises from the ever-present movement of†¦show more content†¦Ã¯â€š · Cyclical unemployment or Keynesian unemployment occurs when there is deficiency or decrease in the demand for goods and services in an economy5. It occurs when aggregate demand reduces and there aren’t enough jobs for people that wish to work. Cyclical unemployment is affected and caused mostly by market forces6; reduction in the demand for goods and services in an employer’s mind usually means fewer workers are needed so they adjust by temporarily laying off workers and cutting hours of employees retained to fill reduced product demand. Professor Feld man in his unemployment lecture said â€Å"Employers usually don’t start hiring immediately when demand begins to rise until they are confident that economic growth will continue the recall experienced workers or hire new ones† this is because of the fear of market instability or market fluctuations in a weak economy. 3 Ehrenberg,R.G.and Robert S.S. (2012).Modern Labor Economics:Theory and Public Policy,11thEdition.Boston,MA:Pearson Education,Inc. p 508 4 Valletta R. and Kuang K.â€Å"Is Structural Unemployment on the Rise?,†FRBSF Economic Letter, No. 2010-34, November 8, 2010, p. 3 5Nickell, S., (1987).A Historical Perspective on Unemployment: A Review Article.Journal of Political economy. Vol. 95, No. 4, p 857-869Show MoreRelatedThe Four Types Of Unemployment754 Words   |  4 PagesFour Types of Unemployment One of the scariest word for many individuals among the United States can be unemployment. Many families across America have had to deal with the hard blow that can come with losing a job, or not being able to find a job. Unemployment will always be around to snatch the job from any unwilling victim. While unemployment may seem like a broad term, there are actually four categories, or types, of unemployment. 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