Question
Unemployment will be higher in a society with a high share of relatively young or senior employees. Unanticipated changes in productivity can have a significant
Unemployment will be higher in a society with a high share of relatively young or senior employees. Unanticipated changes in productivity can have a significant impact on the natural rate of unemployment. Education appears to be the key to reducing structural unemployment. Individuals with degrees who become structurally jobless can be retrained. That choice is more limited for persons who lack skills and education.
Natural unemployment is proportional to full employment and potential real GDP. Wage adjustments to productivity levels will not be rapid or easy. When productivity changes abruptly, the natural rate of unemployment may be affected for a period of time. Public measures aimed at assisting the jobless can have an impact on how keen people are to obtain jobs. A society that gives significant assistance to the jobless but shuts off after, say, six months may provide less motivation to work.
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