Unemployment Structural Unemployment Essay
There are 4 types of unemployment:
1. Frictional Unemployment
2. Structural Unemployment
3. Cyclical Unemployment
4. Seasonal Unemployment
Frictional unemployment is due to the normal working of the labor market. That is frictional unemployment results from job search activities. Arises because of the time needed to match qualified job seekers with the available job openings. For e.g. the short span of time you spend unemployed after your graduation, may be because you need to travel to your new employers location.
Structural unemployment is the unemployment that arises when changes in technology or international competition change the skills …show more content…
Through my ec101 learning journey I have learnt some thing about natural rate of unemployment. So I would like to take this opportunity to briefly discuss about natural rate of unemployment.
Natural rate of unemployment is the unemployment rate when the economy is producing at its potential level of output (at full employment).
Natural rate of unemployment is unemployment arises from job search and skill mismatch in the labor market: That is frictional and structural unemployment. There will be no cyclical unemployment.
Natural rate of unemployment fluctuates over time due to changes in structure of the economy and labor market functions. Overall I would like to highlight a point, that when we are operating at potential level of output, it does not mean that there is no unemployment. Only cyclical unemployment doesn’t exist that time. However, frictional and structural unemployment does exist when an economy is producing at potential level of output. Current Trends of unemployment in Fiji
Let’s now look at the current trend of unemployment for Fiji for past 5 years. According to Asian Development Bank, in year 2005 the unemployment rate was 6.8% in 2006 the unemployment rate was 7.2%, in year 2007 the unemployment rate was 7.7%, in year 2008 the unemployment rate was 8.3% and in year 2009 the unemployment rate was 8.7% but in year 2010 the rate was 7%.It can be seen that the unemployment rate has increased from year 2005