Types of Equilibrium Unemployment

• What are the three types of equilibrium unemployment?

  Frictional, Structural, Seasonal
• What is the full employment level percentage range?

  3% - 5%
• What characterizes frictional unemployment?

  It occurs between jobs and is voluntary
• What are the factors that can make frictional unemployment long-term?

  Geographical and occupational immobility, job vacancies info, JSA
• What does geographical immobility of labor refer to?

  Transport, moving costs, housing costs
• What does occupational immobility of labor refer to?

  Transferable skills
• What is structural unemployment also known as?

  Technological unemployment
• What characterizes structural unemployment?

  Skills do not match available jobs and is involuntary
• What is seasonal unemployment?

  Temporary unemployment due to seasonal work
• What is the natural level of unemployment (NRU) percentage range?

  3% - 5%
• What are the characteristics of structural employment

  • Skills do no match the jobs available

  • Involuntary

  • Long-Term
• What are the characteristics of frictional unemployment

  • Between jobs

  • Voluntary

  • Short-Term
• What are the characteristics of seasonal unemployment

  • Full employment level = 3%-5%

  • Natural level of unemployment (NRU)

  • Temporary
• What is one factor that determines the Natural Rate of Unemployment?

  Availability of job information
• How does the availability of job information affect unemployment?

  It influences frictional unemployment and job search speed
• What role do benefits play in the Natural Rate of Unemployment?

  Generous benefits may discourage job acceptance
• Why might generous benefits discourage workers from taking jobs?

  They may prefer benefits over lower wage jobs
• What factor related to education influences the Natural Rate of Unemployment?

  Skills and education
• How do skills and education affect occupational mobility?

  Quality education influences the level of mobility
• What is another factor that determines the Natural Rate of Unemployment?

  The degree of labour mobility
• How does the degree of labour mobility impact unemployment rates?

  Higher mobility can reduce unemployment levels
• What is a characteristic of the labour market that affects unemployment?

  Flexibility of the labour market
• Why is flexibility of the labour market important for unemployment?

  It allows quicker adjustments to economic changes