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Frictional unemployment vs structural

 
 
Reply Sun 6 Apr, 2014 12:29 am
Good morning,
I have a question to the questions found in some set of tasks of macroeconomics.

The question is
"Development of Internet based sales insurance forced Adam to resign of his position of insurance salesman. Then he starts his postgraduate MBA studies. After graduate, with a diploma in his hand, he is looking for a fob of financial director. In current situation Adam is:
a) is cyclically unemployed
b) a friction-unemployed
c) is structurally unemployed
d) is not included in the labor force"
Correct answer in the opinion of creators of this set is c.

Of course answers a and d are meaningless, however in my opinion correct answer is b, because we can divide Adams live into three parts:
1) Adam woking as a insurance agent.
2) Adam studying MBA
3) Adam searching for a job of financial director.
In my opinion adam used to be structurally unemployed - after losing previous job and before starting studies (ad 1), then he wasn't unemployed at all (because he was student, ad 2) and now he is friction-unemployed, because he is a person who came back to the labour market (ad 3).
Could someone explain to me, why I am wrong?
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Type: Question • Score: 2 • Views: 1,828 • Replies: 2
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bobsal u1553115
 
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Reply Sun 6 Apr, 2014 07:56 am
Because the bottom line including all the prep needed for a new job, is: he is utterly unemployed.
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fobvius
 
  1  
Reply Sun 6 Apr, 2014 08:01 pm
@MateuszJanczura,
It's structural unemployent because:

http://econproph.com/2010/08/17/frictional-structural-cyclical-unemployment-defined/


Frictional unemployment is defined as the unemployment that occurs because of people moving or changing occupations. Demographic change can also play a role in this type of unemployment since young or first-time workers tend to have higher-than-normal turnover rates as they settle into a long-term occupation. An important distinguishing feature of this type of unemployment, unlike the two that follow it, is that it is voluntary on the part of the worker.


Structural unemployment is defined as unemployment arising from technical change such as automation, or from changes in the composition of output due to variations in the types of products people demand. For example, a decline in the demand for typewriters would lead to structurally unemployed workers in the typewriter industry.
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