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Chapter 6: Problem 4

How does structural unemployment differ from frictional unemployment?

Short Answer

Expert verified
Frictional unemployment is temporary and due to the time it takes to find a new job. Structural unemployment is longer-term and caused by a mismatch in the skills of the unemployed and the skills required for existing jobs.

Step by step solution

01

Define Frictional Unemployment

Frictional unemployment is temporary in nature and intrinsic to the work force. It refers to the period of time between jobs when a worker is searching for, or transitioning from one job to another. It's also seen when workers are voluntarily transitioning between jobs, often as a result of disparate conditions, wages, hours, or physical locations.
02

Define Structural Unemployment

Structural Unemployment is a longer-lasting form of unemployment caused by fundamental shifts in an economy. It occurs when a labor market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of the workers and the skills needed for the available jobs.
03

Identify Differences

Both frictional and structural unemployment occur when a worker is between jobs. The main difference lies in the reasons for which they are jobless. Frictional unemployment is voluntary and short-term, while structural unemployment is involuntary and requires workers to learn new skills to do available jobs, causing it to be a longer-term problem.

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