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Identifying the Type of Unemployment

EconEye Admin

Jasmine Walker recently graduated and is applying for marketing jobs but hasn’t found one yet.—bbc.com

Aaron Diangienda has spent more than a year searching for a suitable job and plans to return to college to complete his sports diploma.—bbc.com

Dean Grey, an entry-level software engineer, struggled to find work as the tech market shifted toward AI-related skills. He is now retraining for the changing labor market.—businessinsider.com

Patrick Ciriello, a 60-year-old IT professional, lost his job several times during his career amid the dot-com crash, the 2008 financial crisis, and the COVID-19 pandemic—the guardian.com

Answer the following questions to check your understanding of the story.

Which of these workers have experienced frictional unemployment?

Wrong! - Does Dean Grey have the right skills for the labor market? Is he frictionally unemployed? Why was Patrick Ciriello unemployed?

Nice Work! - Frictional unemployment is the unemployment that arises from normal labor turnover. Jasmine is frictionally unemployed. Aaron may be frictionally unemployed, but we don’t know for sure.

Which of these workers have experienced structural unemployment?

Wrong! - Does Jasmine Walker face a mismatch between her skills and the jobs available? Why was Patrick Ciriello unemployed?

Well Done! - Structural unemployment is the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the locations of jobs. Dean Grey is structurally unemployed. Aaron may be structurally unemployed, but we don’t know for sure.

Which of these workers have experienced cyclical unemployment?

Wrong! - Are Jasmine Walker and Dean Grey unable to find a job because of a recession?

Good Job! - Patrick Ciriello was cyclically unemployed because he was laid off during three recessions.

How does Aaron Diangienda’s labor-market status change when he returns to college?

Wrong! - Is someone who attends college and has no job employed? Before Aaron returns to college, is he out of the labor force?

Correct! - Aaron Diangienda is unemployed while actively looking for work. When he returns to college and stops looking for work, he is out of the labor force.

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