Types of unemployment
The three people described in the following table are categorized as unemployed by Statistics
Canada.
Identify each person in the table as structurally, frictionally, or cyclically unemployed.
Unemployment Type Structural Frictional Cyclical
Latasha just moved with her husband to Calgary,
Alberta. She's looking for a job as a paralegal.
Jake recently lost his job as a dishwasher.
Minimum-wage legislation keeps employers
from adding more of the low-skill positions for
which he qualifies, so he has been unable to find
work.
Rosa is a real estate agent. House sales in her
area have declined because the region has been
going through a recession. She has no clients
and is currently looking for a new full-time job.
Points:
0.67 / 1
Close Explanation
Explanation:
Structural unemployment arises from a mismatch between the jobs available in some labour
markets and the skills of workers. One cause of structural unemployment is institutional factors
such as a minimum wage, which holds wages above the marginal productivity of less skilled
workers, limiting their employment opportunities.
Frictional unemployment occurs because job seekers and employers need time to find one another.
Therefore, Latasha is considered to be frictionally unemployed. This kind of unemployment is
usually brief.
Cyclical unemployment is the form of unemployment associated with business cycles. This kind of
unemployment rises during recessions and falls during expansions. Because Rosa lost her job due
to the recession, she would generally be considered to be cyclically unemployed.
