Country A's workforce consists in large part of seasoned workers, with an average age of around 45. Country B is relatively young, with an average workforce age of just 31. A is also a mature country, having implemented many modern advances in technology. B is a growing country with a dynamic leadership which is bringing about a technological revolution in the country. Given this, country A has ________ structural unemployment and ________ frictional unemployment than country B.
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A. B. C. D.D
Frictional employment arises because of the fact that employers do not known about all the available workers and their qualifications while job-seekers are not fully aware of the available job opportunities matching their interests and skills. This leads to a longer job placement time and also causes a higher employee turnover due to job mismatches. The resulting contribution to the unemployment rate is called "frictional unemployment." Since younger workers tend to have a higher job mobility, a younger workforce will also have a higher frictional unemployment.
Changes due to technology, public policy or demands in the market place lead to people with outdated skills or skills which do not match the jobs being offered.
The resultant contribution to unemployment is referred to as "structural unemployment." Hence, a rapidly growing economy will tend to generate a higher level of structural unemployment since in such an economy, skills tend to get outdated faster.