Thursday 18 February

Classify these individuals as most likely

a. structurally unemployed, b. frictionally unemployed, c. not in the labor force, or d. cyclically unemployed.

1. Mary got fired from her job with Macdonalds for giving french fries to her friends and has not yet found another job, although she is looking.

Not working, looking for work: most likely frictional

  1. John moved to Tallahassee when his wife entered a graduate program at FSU, but so far has not found a job yet despite looking. In Cleveland, he was a tool and die designer, but now he would do almost anything.

This sounds cyclical, because of the "now he would do almost anything;" kind of unlikely at present, because Tallahassee has a very low unemployment rate, but you are not told a date. A case could be made for frictional, but it would be hard to justify a structural answer.

3. Jacob moved to Atlanta in 1981, but was out of work all through 1982 despite being willing to do anything for money -- nobody seemed to be hiring then.

Most of you are too young to remember that, but 1982 was a bad recession; this is clearly cyclical.

4. Because the State closed Apalachicola Bay to oystering, Fred has no work, and cannot find any because with the net ban, things are bad in Franklin County.

Most likely structural; it is a local problem, a lack of fit between characteristics of workers and job opportunities in the locality.

5. Louise graduated in August, but has not yet found a job that has hours that fit with her triathlon training.

I would say frictional; the implication is that she is looking for a job, she is just being rather picky about which one she is willing to take.

  1. Stanley graduated in August, and is spending the time until Christmas rewriting all his songs before moving to Nashville to try to sell them.

The statisticians would say this is "not in the labor force," assuming that as yet he has not sold any of his songs. If he has sold songs in the past, and the sale of his songs is in fact his main source of income, he would count as "employed," believe it or not, [to be precise, 'self-employed without employees'], because if he has sold songs in the past, that is his main source of income, and there is a reasonable expectation that he will sell the songs he is rewriting, then rewriting the songs is indeed 'gainful activity.' However, if he has been in school and has never sold songs before, the expectation has to be pretty low that he will actually be able to sell them, so the statisticians would treat it as a hobby and call him not in the labor force.

Collecting economic and social data is very difficult; there are always ambiguities about real world cases when compared to simple concepts. What the statisticians have to do is use definitions that may be arbitrary, but do allow classification. Nobody publishes data on frictional, structural, or cyclical unemployment because classifying individuals would be too difficult and too ambiguous; but conceptually the categories are useful for understanding what does happen with unemployment.