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Case 2.1 Do People Volunteer to be Unemployed? The distinction between voluntary and involuntary unemployment A distinction made by some economists is that between voluntary
Case 2.1 Do People Volunteer to be Unemployed? The distinction between voluntary and involuntary unemployment A distinction made by some economists is that between voluntary and involuntary unemployment. Many economists would regard equilibrium unemployment as voluntary. If people choose not to accept a job at the going wage, even though there are jobs available, then in a sense they could be said to have voluntarily chosen to be unemployed. Disequilibrium unemployment, according to these economists, would be classed as involuntary. Workers want to work at the current wage, but there are not enough jobs available. Some economists would also include real wage unemployment as voluntary. If people, through their unions, have chosen to demand a higher wage than the equilibrium wage, then they could be said to have collectively Qvolunteered' to make themselves unemployed. According to these economists, then, only demand-deficient unemployment would be classed as involuntary. Some economists go even further and argue that all unemployment should be classed as voluntary. If the cause of disequilibrium unemployment is a downward stickiness in real wage rates, then workers, either individually or collectively, are choosing not to accept work at a lower wage. Other economists would go to the other extreme and claim that all disequilibrium unemployment and most equilibrium unemployment is involuntary. Structural
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