Difference Between Equilibrium And Equilibrium Unemployment

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Equilibrium unemployment and disequilibrium unemployment are the basic categories of unemployment to apply on the total labor that the whole economy has (Sloman). Equilibrium unemployment is the difference between people that want to take the job they are offered and people that are willing and able to take the job. Disequilibrium unemployment occurs when the aggregate demand for labor is less than the aggregate supply of labor.

Recently an analysis conducted by the Bureau of Labor Statics of the USA shows that in the American job market a college bachelor degree won’t give you the certainty that you will find a job after your graduation. It still might be possible that you will become one of the youngsters that is unemployed.

The unemployment
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The ASL represents the people that are willing to take jobs at certain wage rates. This is the aggregate supply of the labor market. ADL is the demand curve, its slopes downwards because if the wages are higher the companies will look for other alternatives. N represents the total number of labor available. If the wage is stated at W1, the disequilibrium unemployment is a-b, and the equilibrium unemployment is c-a. So the total unemployment on the total labor market is therefore …show more content…
Let’s point it like this; if there is an demand of 10 jobs and a supply of 10 workers, when 6 of the jobs require an educated worker, and in the past 5 workers had an high educational background these jobs can be equal divided. But since more people have an higher educational background 7 out of 10 workers can fit the 6 jobs that require an educational background. This means that the 7 workers have to share the 6 jobs which will let the ASL shift to the right, which will increase the disequilibrium unemployment (c-b). The other 3 workers have to share 4 jobs, which gives them the opportunity to even reject a job if they want to, therefore the ASL will shift to the left and the disequilibrium unemployment will

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