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 rate is the number of people that is unemployed but are willing and searching for an job, as an percentage of the total people that are working in the …show more content…
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 c-a.
Figure 13: Disequilibrium & Equilibrium unemployment
Because of the increase of people with an high educated background there will be an change in the supply curve of the ASL high educated. ASL. More people with an higher education means that job that require and educational background are likely to be taken if the demand (ADL) stays the same over the period. In the graph below its visualized how the supply curve of the high educated people will shift.
Figure 14: Shift Disequilibrium & Equilibrium
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 rate is the number of people that is unemployed but are willing and searching for an job, as an percentage of the total people that are working in the …show more content…
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 c-a.
Figure 13: Disequilibrium & Equilibrium unemployment
Because of the increase of people with an high educated background there will be an change in the supply curve of the ASL high educated. ASL. More people with an higher education means that job that require and educational background are likely to be taken if the demand (ADL) stays the same over the period. In the graph below its visualized how the supply curve of the high educated people will shift.
Figure 14: Shift Disequilibrium & Equilibrium