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Frictional, Structural, or Cyclical Unemployment

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The following are stats for the unemployment rates for five different groups during the months of Aug. 2005 and Aug. 2006. I need to know what would cause the shift in % for each group and if each group is a form of frictional, structural, or cyclical unemployment and why.

1. unemployment rate, bachelors degree and higher, 25 years and older
August 05: 2.1%
August 06: 1.8%

2. unemployment rate, some college, 25 years and older
August 05: 3.6%
August 06: 3.7%

3.unemployment rate, high school diploma and no college, 25 years and older
August 05: 4.5%
August 06: 4.7%

4. Unemployment rate, full time male workers over 20 years old
August 05: 5.9%
August 06: 4.1%

5. Unemployment rate, full time woman workers over 20 years old
August 05: 5.6%
August 06: 4.3%

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Solution Summary

Demographic information is used to determine which type of unemployment is occurring.

Solution Preview

The key to this assignment is the recognize that the US economy has been growing over the last year (see http://www.house.gov/budget/econup051506.pdf). So, any change in unemployment since 2005 is likely due to a reduction in cyclical unemployment.

1. This group is skilled, and is affected mostly by frictional unemployment. This is a voluntary unemployment of short duration, generally occurring when workers are changing jobs. It arises because ...

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