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Dear Sir,
I would like to know the answer of the following question as I have been confused difference between the Structural unemployment and Cyclical employment. I think the answer is Cyclical unemployment but I would like to know the assumption behind it.
In recent years large number of highly skilled individuals especially doctors left Pakistan for good as they were protesting for increase in their compensations and were not willing to settle for less monthly salaries. This rendered significant majority of doctors unemployed. What type of unemployment is this?
A. Structural unemployment
B. Cyclical unemployment
C. Frictional unemployment
D. Classical unemploymentThanks in advance.
It’s not cyclical because that arises from world-wide economic cycles.
Structural unemployment arises from a mismatch of skills available and skills needed.
Frictional is temporary as people change jobs.
Therefore it must be classical. This is when real wages are kept above the market clearing wage rate, leading to a surplus of labour supplied.
Thanks for your reply and need one more clarification. Classical unemployment is the same with real wage unemployment?
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