In each of the following cases, classify the person as cyclically unemployed, st

Question

In each of the following cases, classify the person as cyclically unemployed, structurally unemployed, frictionally unemployed, or not in the labor force. Explain your answers. a. Maya just graduated from a top medical school and is cur- rently deciding which hospital emergency room job she will accept. b. Hector lost his job as an assembly line worker at Chrysler due to the recession. c. Alejandro, an advertising executive in Seattle, quit his job one month ago to look for a more prestigious advertising job in New York City. He is still looking for a job. d. Yvonne got laid off from her job as a financial analyst 3 months ago and has not looked for a new job since then. e. Taylor lost his job as a welder due to the introduction of robotic welding machines. f. Ruby quit her job as a hotel concierge to become a full-time student at a culinary school.

Explanation / Answer

A) Frictional B) Cyclical C) Frictional D) Sructural/ Not in work force E) Structural F) Not in Work Force Description of the above type of Unemplyments: Economists describe cyclical unemployment as the result of businesses not having enough demand for labor to employ all those who are looking for work. The lack of employer demand comes from a lack of spending and consumption in the overall economy. Structural unemployment is a form of unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. Even though the number of vacancies may be equal to, or greater than, the number of the unemployed, the unemployed workers may lack the skills needed for the jobs, or they may not live in the part of the country or world where the jobs are available. Frictional unemployment exists because both jobs and workers are heterogeneous, and a mismatch can result between the characteristics of supply and demand. Such a mismatch can be related to skills, payment, worktime, location, attitude, taste, and a multitude of other factors. New entrants (such as graduating students) and re-entrants (such as former homemakers) can also suffer a spell of frictional unemployment. Workers as well as employers accept a certain level of imperfection, risk or compromise, but usually not right away; they will invest some time and effort to find a better match.

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